(News Bulletin 247) – Continuation of the positive reaction on the Parisian market yesterday, with an acceleration during the session. The CAC will finally manage to grab the 6,200 points, after a good comeback.
To simplify, at the end of last week and in the first part of the session yesterday, the market was satisfied, with the necessary quotation marks, with a scenario of +75 bps in Fed Funds at the end of the month, dismissing the idea a time mentioned of +100 bps after the publication of annualized inflation at +9.1%. Some benchmarks on consumption (U-Mich, retail sales) have also been there. But the bottom matrix remains bearish.
On Thursday, two eminent members of the American Federal Reserve, including the president of the Saint-Louis branch, James Bullard, one of the most fervent defenders of an aggressive monetary policy, indeed campaigned for a 0.75 point increase in percentage of the policy rate.
A few good quarterly corporate results and increasingly reassuring prospects for the continuity of European supplies of Russian gas did the rest.
In terms of statistics, operators took note of the final consumer price data for June in the Euro Zone, with no deviation from the first estimates, at +8.6% at an annualized rate, food and energy included. RAS on the side of housing starts and building permits across the Atlantic, which confirmed their contraction, without leaving the target.
On the values ​​side, files correlated to the economic situation were acclaimed, such as ArcelorMittal (+3.53% to 22.70 euros), Stellantis (+3.77% to 12,716 euros), Société Générale (+3.97% to 20.97 euros), Publicis (+4.29% to 46.41 euros), or Renault (+4.42% to 25.89 euros).
On the other side of the Atlantic, the upward acceleration in prices has gained momentum, on the Dow Jones (+2.43% to 31,827 points) and especially the Nasdaq Composite (+3.11% to 11,713 points) . The S&P 500, the reference barometer of risk appetite in the eyes of fund managers, rose 2.76% to 3,936 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 $1.0150. The barrel of WTI, one of the barometers of risk appetite in the financial markets, was trading around $102.20.
To be followed in priority on the statistical agenda this Wednesday, the consumer confidence index in the Euro Zone at 4:00 p.m. and the sales of old homes in the United States at 4:00 p.m.
KEY GRAPHIC ELEMENTS
The painting (its 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.
The flagship index achieved a pullback (graphic rejection) of school on the 6,000 points. After a phase of congestion, a rally of 6,200 points was operated, with cleaning of the remainder of the gap of June 13th.
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 6325.00 points would revive the tension in the purchase. While a break of 5900.00 points would relaunch the selling pressure.
Hourly data chart
Chart in daily data
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