(News Bulletin 247) – Hesitantly, the Paris Bourse will have ended Thursday’s session in the green (+0.36% to 6,612 points) for the CAC 40, in timid volumes, two days after the outcome rather well digested of a Fed Monetary Policy Committee. Above all, the FOMC was an opportunity, beyond the monetary decision itself, to set the tone for the months to come. The Fed has been aggressive in tackling runaway inflation, and has hinted that it may raise rates at each of its monetary policy meetings this year.
The lack of progress towards a resolution of the conflict in Ukraine should however not allow a bullish extension on Friday. The hope that the Russian and Ukrainian negotiators can find a way towards a possible resolution of the conflict comes up against the dramatic reality of the bombings in Ukraine. Jean-Yves Le Drian, the boss of the Quai d’Orsay accused this week, in an interview with the Parisian, Russia of “pretending to negotiate” a ceasefire with Ukraine.
In terms of statistics, the publications were concentrated on the American side. The Philly Fed at 27.4 and weekly jobless claims at 214,000 new units both beat expectations. RAS on the side of the federal monthly report on industry, close to the consensus both on the dynamics of the volume of production and on the rate of capacity utilization.
In terms of values, the prize list proved to be very divided on the Paris Stock Exchange. Schematically, several of the stocks that had benefited the most from the previous day’s boom, such as Renault (-5.5%) or Alstom (-2.8%) or, to a lesser extent, Société Générale (-0.95%) are barely found. Conversely, energy-related stocks benefited from the renewed tension on oil.
On the other side of the Atlantic, the main equity indices ended Thursday’s session in the green, like the Dow Jones (+1.23% to 34,480 points) or the Nasdaq Composite (+1 .33% at 13,614 points). The S&P 500, the benchmark barometer of risk appetite in the eyes of fund managers, gained 1.23% to 4,411 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 $1.1040. The barrel of WTI, one of the barometers of risk appetite in the financial markets, was trading around $97.10.
To follow in priority, on the agenda this Friday sales of old homes in the United States at 3:00 p.m. Note that Wall Street will open for another week at 2:30 p.m. instead of 3:30 p.m., the time Paris switches to summer time in turn (next weekend).
KEY GRAPHIC ELEMENTS
The 6,760 points, which we have identified so far as a gradually weakened floor, gave way, on a wide gap on Thursday 02/24, opening the way to a new market phase. Recall that the index traced from February 16 to 18 a combination of candles in three crows. This combination was immediately followed by a very significant bearish engulfing structure, accompanied by volumes that were far from timid for a session, let’s not forget, without American benchmarks due to a public holiday. The last phase of weakening of the aforementioned support will therefore have been aggressive. Friday 25/02’s pullback was surgically precise.
A phase of high volatility has thus begun. The school marubozu drawn on Tuesday 01/03 is a first step. Second stage Friday 04/03 with a candle of the same type (opening on the high points, closing on the low points) in even more fed volumes. A new bearish leg would open under 6,000 points, already broken on Monday 07/03, before the formation of a dispute rebound. On Wednesday, March 09, we witnessed a first phase of an explosive protest rebound, which pushed the index back to its 100-hour moving average (in orange in hourly view), a curve that retains a marked downward bias. The bearish harami plotted on Thursday is hardly engaging.
The gap on Wednesday 16 is not a signal to return to buying, and the high volatility phase is not over.
FORECAST
In view of the key graphic factors that we have mentioned, our opinion is negative on the CAC 40 index in the short term.
This bearish scenario is valid as long as the CAC 40 index is trading below the resistance at 6760.00 points.
Hourly data chart
Chart in daily data
©2022 News Bulletin 247
I am currently a news writer for News Bulletin247 where I mostly cover sports news. I have always been interested in writing and it is something I am very passionate about. In my spare time, I enjoy reading and spending time with my family and friends.
