(News Bulletin 247) – Driven by the values of heavily exporting companies, against a background of downward acceleration of the Euro towards parity with the Dollar, the CAC 40 yesterday gained 2.03% to 5,912 points, without we might as well upset the basic, bearish matrix, while fears of an entry into recession in the United States and the Euro Zone are taking shape.
LVMH gained 4.48% to 597.60 euros, L’Oreal 4.92% to 347.75 euros, Hermès 5.05% to 1,113 points. The order of 387 million euros received in India by Alstom for 156 “Movia” cars intended for the metros of Bhopal and Indore allowed the title to gain 4.8%. Safran won 3.85% while Air France chose (after KLM a few months ago) the LEAP engine for its future fleet of A30neo, a market of around 200 engines. Airbus gained 3.6% on this outlook as well.
In terms of statistics, the publication of the ISM Services in the United States, beyond expectations, will have enabled Wall Street to resist, just like the Minutes, Minutes of the Fed’s last monetary policy meeting. Its main lesson is that the scenario of a 50bp hike is still possible, whereas the market has ruled it out until now in favor of a scenario of a new 75bp hike.
On the other side of the Atlantic, the main equity indices managed to grab a few points on Wednesday, like the Dow Jones (+0.23% to 31,037 points), or the Nasdaq Composite (+0, 35% to 11,361 points). The S&P 500, the benchmark barometer of risk appetite in the eyes of fund managers, nibbling 0.36% to 3,845 points.
A point on the other risky asset classes: around 08:00 this morning on the foreign exchange market, the single currency was trading at a level close to $1.0210. The barrel of WTI, one of the barometers of risk appetite in the financial markets, was trading around $98.6.
To follow as a priority on the statistical agenda this Thursday, the American trade balance and the weekly registrations for unemployment benefits at 2:30 p.m.
KEY GRAPHIC ELEMENTS
The picture (the backdrop in any case) is dark.
The sell signals have multiplied since the combination of “evening star” candles (May 27, 30 and 31). The openings successively in bearish gap of the last two sessions of week 23, then of the first session of week 24, were accompanied by a continuous mobilization of the selling side during the session and closing on the low points of the session. All in sharply rising volumes. The momentum of participation will have followed that of the clearings, even as the CAC will have re-entered the lower part at a bearish slant that retains its resistance attributes.
The technical rebound that began during the week (W25) remains anecdotal at this stage in view of the transaction volumes accompanying it and in view of the initial losses. It came to an early halt, and the resumption of selling pressures, on gaps, on breach of the symbolic threshold (6,000 points), and in high volumes, augurs a continuation of clearances.
Tuesday, July 05, the traced candle combines worrying characteristics, its structure with an elongated body without a wick, materializing a mobilization of the selling camp throughout the session, all in relatively heavy volumes, and on breaking the technical threshold.
FORECAST
In view of the key graphic factors that we have identified, our opinion is neutral on the CAC 40 index in the short term.
We will take care to note that a crossing of 6000.00 points would revive the tension in the purchase. While a break of 5780.00 points would relaunch the selling pressure.
Hourly data chart
Chart in daily data
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