Another year! 2012 is the Year of the Dragon, so a great year huh? Well, clearly not if you are a long only equity investor... As I wrote a while ago, the summer collapse marked the beginning of the Bear market.
On my last update in November, I was highlighting that we were to witness a couple of months of rally.. Well we had it! Now we have reached sell signal in Europe: Eurostoxx50, Cac are nice sell, even short for the aggressive punters among you...S&P500 is loosing steam, Russell 2000 still is in an upward momentum but close to sell levels. Same comment for Nikkei...Personally, if you care, I closed all the long I have in the European markets, and opened some shorts in Cac last week, I am still long Russell, and Nikkei...but very close to pull the trigger sell...
S&P500 weekly index:
As expected in November, the index moved up to test the 1350 level and even overshot to 1370. The SP& is now overbought on both weekly and monthly charts, and unlike in November, teh momentum is not upward anymore, lossing some steam...If you are long, sell.
Eurostoxx50 Weekly:
The index rebounded as expected but did not test the 2650, there is no strength in Europe.
2500 level is a resistance (50% Fibo), and the momentum is not upward anymore. The index is overbought, and we have a reversal signalled. This on top of the weak rebound we had the last few months, gives more confidence to sell short now...
So you got it : Sell.. Close your long, open short...
Conclusion: Sell Europe, even short... Sell SP&500, wait a bit for Russell 2000 and Nikkei...
and last,
Nasdaq100 quarterly chart:
The index have retraced 50% since the Tech bubble burst.
I am always amazed by the Fibonacci retracement points, in 2008, the index retraced up to the 38% level and started to fall, and now we are at the 50% level...So an upward break or not? well, not this year...It is interesting to note that on long term basis, the trend is up...
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