I predicted it in my previous analysis: “German DAX had 11 upward weekly candles from all 12 last candles. It means that upward movement lasts for a long time and we can expect some downward correction” (read more at http://comparic.com/euro-stoxx-50-index-dax30-cac40-another-week-bulls/).
Exactly that happened. DAX30 weekly bullish candle was covered by the bearish candle. In fact, it formed Outside Bar pattern which predicts downward movement at least in the nearest weeks.
Each levels described in this analysis concerns Future market. You can find these indices at Windsor Brokers platform: GER30, FRA40, EU50.
CAC40 (French index grouping the 40 largest companies):
Last week was disappointing for the bulls. After the price broke above resistance 5500 pts there wasn’t a strong upward movement. It caused the profit realization and downward movement. CAC40 has formed five bearish daily candles and finished trading in the area of the previous consolidation 5350 pts – 5390 pts (color yellow on the chart).
If 5350 – 5340 area is broken below the next supports will be located at 5250 pts, 5200 pts, 5130 pts. There is one noteworthy fact. The current moment is excellent for the correction before upward movement at the end of the year. In my opinion, 5650 pts level should be tested at the end of this year.
Euro Stoxx 50 (index grouping 50 largest European companies from 11 countries in Europe):
Euro Stoxx 50 looks similar to CAC40 . After a week of declines, the index returned below 3640 pts level. The week finished inside consolidation 3600 pts – 3580 pts. If bears push CAC40 below that area, next targets will be located at 3530 pts, 3440 pts.
After numerous weeks of the upward movement, the correction should occur. Thus, the current decline is just correction in the bullish trend. For now, there isn’t any sign that the trend will reverse. At the latest at 3440 pts, the bulls should start to buy.
DAX30 (German index grouping 30 biggest companies):
The strongest index is DAX30. Consolidation from October at 12900 pts – 13000 pts is not endangered. Current downward movement could be finished even at 13000 pts.
If American S&P500 will start correction it will be the biggest problem. Both indices are correlated and DAX30 will follow American index. Upward movement at the end of the year should occur. Right now, there is only a question if that correction will last long?