(News Bulletin 247) – The CAC 40 (-0.90% yesterday to 5,985 points) is, near the highly symbolic threshold of 6,000 points, close to the high points of a strong technical protest reaction. The potential for the reaction is at this stage defined by the upper limit of the bearish gap of September 16, at 6,143 points. The index already showed a first sign of running out of steam yesterday, with the construction, in timid volumes, of a harami. Moreover, the observation of the attitude of the representatives of a sector with high current Beta, namely automotive equipment, says a lot about the lack of confidence of the buying camp. Valeo lost 6.55% and Faurecia 7.70%.
The market will remain particularly attentive to inflation indicators and as such, the price component of the US manufacturing ISM published on Monday rather relieved investors. “The “prices paid” component fell to its lowest level since June 2020” noted Alexandre BARADEZ (IG France). “And the markets have been sensitive to it. […] This does not mean that equity markets will immediately rebound without reversing, as more price data will be needed to confirm a trend slowdown.
US employment, and the extent of its tensions, will constitute a valuable barometer on Friday with the publication of the NFP (Non Farm Payrolls) report, a federal monthly report. Yesterday the ADP (Automatic Data Processing) survey constituted its traditional “taste”. The private human resources firm highlights 208,000 job creations in the private sector (excluding agriculture), against a target of 200,000.
On the other side of the Atlantic, the main equity indices symbolically ended in the red on Wednesday, after a session of resistance to higher profit taking. The Dow Jones fell 0.14% to 30,273 points and the Nasdaq Composite fell 0.25% to 11,148 points. The S&P 500, the benchmark barometer of risk appetite in the eyes of fund managers, lost 0.20% to 3,783 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 $0.9900. The barrel of WTI, one of the barometers of risk appetite in the financial markets, was trading around $87.80.
To follow as a priority on the statistical agenda this Thursday, the weekly registrations for unemployment benefits in the United States at 2:30 p.m.
KEY GRAPHIC ELEMENTS
We are at the heart of a protest reaction, the volatility of which is measured by the yardstick of the initial depreciations on the Paris market. And this even though the underlying trend remains bearish. We are in the phase of defining the amplitude of a volatile wide-range sideways pattern. The candle of October 04 has also defined most of this amplitude.
FORECAST
In view of the key graphic factors that we have mentioned, our opinion is positive on the CAC 40 index in the short term.
This bullish scenario is valid as long as the CAC 40 index is above the support at 5640.00 points.
Hourly data chart
Chart in daily data
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