Technical forecast for US and Euro Stock markets

Dax futures saw profit taking as expected but with no sell signal we were buying in to weakness as the safest strategy. Support at 7802 was hit where we predicted a bounce and possible low for the day and this was in fact the exact low.

With US markets higher over night we should be testing the week’s high at 7888 and a break higher should finally hit our target of 7896/7906. This may hold the top for now but a push through here would see us on the way to 7930/33 and then 7988/96.

We continue buying in to weakness as the safest strategy with support at 7835 then 7802 unlikely to be broken at this stage, but a break targets 7776 and maybe the 9 day moving average and short term 61.8& Fibonacci support at 7749. This should be a very good buying opportunity this week.

FTSE future hit our target of 6306 and has held here so far.
The 7 month bull market shows no sign of topping just yet so we can be buyers on any weakness down to 6270. If this level fails however look for 6246 next, possibly 6227 with 6208/05 likely to provide an excellent buying opportunity if seen this week.
A break above 6310 takes us back into mid 2008 territory with targets of 6359 and then 6396 which was a high in May 2008. We start hit some very heavy congestion here.

S&P hit profit taking as expected for a move back to support at 1490 and we bottomed just above at 1491. The market is drastically overbought but has been for 2 weeks and this in itself is not a sell signal so we remain buyers on weakness. We finally hit our longer term target of 1503 on the bounce and if we hold above here now we are looking for 1510/11 next. Above here look for 1515 then 1519.

Support today seen at 1500 then 1497 looks unlikely to be broken. However longs may need a stop below 1494 for excellent support at 1492/91 and very little chance we fall any further at this stage.

Dow Jones Industrial Average Future is closing in on our target of 13932. We are drastically over bought so there is a chance we
see profit taking at this level but if we close above here we could then expect to see 13994.
Despite being so overbought there is no sell signal so we remain buyers on weakness with support at 13863/859 then
13803/799. If we fall any further we find excellent support at 13756 which should offer a good buying opportunity.

Eurostoxx held below 2755/56 resistance, topping out at 2753. A break above 2755/56 to follow US markets higher would allow a move to 2763/66 and if we continue on look for 2783 then 2799 this week.

We are getting over bought in the short term so any end of month profit taking takes us back to 2736 and possibly a test of short term Fibonacci and 9 day moving average support at 2724. Doubtful we go any lower today but a break of 2715 should provide a buying opportunity at 2705.

Jason Sen began his career in the options pits on the trading floor of LIFFE in 1987 at the age of 19, making markets on his own account. In 2001 when the trading floor closed he successfully made the transition to day trading on computer screens. Jason always had an interest in technical analysis throughout his trading career but began to study this area in depth from 2006. www.daytradeideas.com has established itself as the leading provider of... More