CAC 40: Definition in progress of the amplitude of a large range

(News Bulletin 247) – Taking advantage of a lull in the interest rate markets, caused in particular by the price component of the American manufacturing ISM published the day before, the CAC jumped 4.24% on Tuesday, in solid volumes. The traced candle, in marubozu white school, was the graphic translation of a mobilization of the buying camp throughout the session. Tech, finance, industry and luxury, together, will have pulled the market up, like in compartment A of the stock market, Soitec (+6.57% to 128.20 euros), Axa (+7.13% to 23.815 euros), Alstom (+7.10% to 18.095 euros), or Christian Dior (+6.58% to 631.50 euros). Wall Street will have generated the right momentum, with the very significant appeasement of Treasuries 10 years.

As a reminder on Monday, on the statistical front, the ISM manufacturing index clearly missed expectations, at 50.9 against 52.8 the previous month. “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.

The rest of the week, in terms of statistics, will be colored by the theme of American employment, culminating on Friday with the federal NFP report (No Farm Payrolls). The investigation of the private firm ADP will give a taste this Wednesday, at 2:15 p.m. New job openings (JOLTS) came in at 10.05m in August yesterday, below consensus, marking an easing of tensions – TBC.

On the other side of the Atlantic, as seen in the preamble, the main equity indices gained ground on Tuesday, like the Dow Jones (+2.80% to 30,316 points) or the Nasdaq Composite ( +3.34% to 11,176 points). The S&P 500, the benchmark barometer of risk appetite in the eyes of fund managers, gained 3.06% to 3,790 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 $0.9860. The barrel of WTI, one of the barometers of risk appetite in the financial markets, was trading around $84.00.

To be followed as a priority on the statistical agenda this Wednesday, the services PMI in final data for September in the Euro Zone at 10:00 a.m., the ADP employment survey at 2:15 p.m. and the American trade balance at 2:30 p.m. We’ll finally take a close look at ISM services at 4:00 p.m.

KEY GRAPHIC ELEMENTS

The ability to close above the points of the September 26 close (reversed hammer) is confirmed, but in low and decreasing volumes until 03/10. We maintain the idea of ​​a continuation of a challenge rebound, but for a handful of sessions only. The 20-day moving average (in dark blue) will be there to call the market to order. In the meantime, it is the files with a very strong current Beta effect that will pull the market up in this handful of sessions, with automotive suppliers in mind.

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 lateralization pattern at large tidy. 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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