OMX30
After a strong week, the OMX experienced a sour Friday, closing just at the roof of the sloping trend channel. As marked in the first graph, this occurred under slightly higher volume. This might be a sign that we might be heading down. On the one side, we have a strong upward momentum, in place since the effectuation of the double bottom and break-out above the rectangular box. In addition, the MA200 is beginning to come around and, as can be seen in the second screenshot, the reversal took place just at the long-term rising trend. On the other side, price action in the mid-long term is trending lower and before observing any definite break above the negative trend-channel, care should be taken. The odds to place bets are not the best. But at the moment, things are definitely beginning to brighten.
Should we, in the near-term, experience a strong retrace, breaking below the previous low of 1567, then short positions could well be taken. In the event of a clear down-ward push, the first level to look for is the previous retracement level around 1500, and thereafter the floor of the negative trading channel.
Long-term view: Negative
Mid-term view: Neutral
Short-term view: Positive
SP500
As is usual, the US had a better week than Sweden and the breakout that was effectuated on the 9th was a textbook example. At the moment the SP looks overbought, but things look set for higher prices. However, volatility has been running high and we’re still too close to the roof of the rectangular box (where the last push was stopped) to embrace this break all the way. My guess is that we are going to experience some uncertainty, and perhaps a short-lived drop. In that case, one might start acquring long positions.
Long-term view: Positive
Mid-term view: Neutral
Short-term view: Positive
Euro/Dollar
The dollar has strengthened against most currencies. After breaking below the tight trading squeeze late last month, the flood-gates opened wide. Now, of late we are begging to se the carving out of some resistance, whose strength the upcoming week will put to the test. On the positive side, the turn came at a significant level. That gives this presumptive turnaround more “of a footing”. On a similar note, the MACD has begun ticking up. In light of the force of the drop, no positions should be entered lightly. But things look good for a retrace – at least to the MA200.
In “catch-a-knife” situations like these, when the bears have been left to run wild, the climate might change fast. Thus, further downside action cannot be ruled out. However, if we accept that the major trend is positive and that the pair should be appreciating, then we should keep our eyes open for positions to take in the same direction. And in my opinion this set-up looks promising.
Long-term view: Positive
Mid-term view: Negative
Short-term view: Neutral
