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Thursday, September 13, 2018 | 1

Technical Analysis

Cyril BAUDRILLART, CFTe [email protected] +33.1.40.74.19.32

Morning Trading Comments

SUMMARY OF TRADING VIEWS

The relief rally seen on Europe indices over the last few days has been disappointing so far. Even in the USA, Bulls were not very aggressive over the last few days and the Semiconductor SOX index dropped below its 200-day MA during the session whilst Nasdaq 100 is struggling near the 7500 pivotal zone. The end of the week could be critical for these stockmarkets as Bears should launch another assault.

CROSS ASSET EVENTS

Longest bull market in history during a Fed Tightening Cycle

I found this story on Bloomberg yesterday and would like to share it with you. I previously noticed that US Bull markets usually end during tightening cycles. The storyboard is the following: 1) The Bull market continues at the start of the tightening cycle as strong earnings & growth support the rally; 2) The momentum of the market starts to fade as the Fed is becoming more hawkish; 3) Equities accelerate downwards as higher rates trigger an economic slowdown and / or as inflation is spiking. Since the first rate hike in December 2015, the S&P 500 is up 41% according to Crescat Capital, the strongest rally on record during a Fed tightening cycle. I know this time is different (and it is!) but we heard similar stories before. How much longer can this last with world ex US slowing down?


DETAILED TRADING OUTLOOK ON MAIN INDICES

S&P 500 E-MINI FUTURE (ESU8)

RESISTANCES 2890 / 2897 / 2905 SUPPORTS 2879 / 2860 / 2847

Comments

A lackluster relief rally...

PREFERRED CASE for next days

The index rebounded over the last few sessions but failed to start a sustained recovery. Over the last 3 days, it retraced less than 50% of the early-September decline. The end of the week could be a critical juncture as we may see renewed weakness. This morning, intraday Point & Figure charts highlight risk of drop to 2879 then 2869.

EURO STOXX 50 FUTURE (VGU8)

RESISTANCES 3330 / 3345 / 3368 SUPPORTS 3300 / 3285 / 3273

Comments

3340-3350 is resistance.


No convincing recovery at this stage. The index has just retraced 23.6% of the early-September decline over the last 3 days which is not a lot. Furthermore, the technical breakdown seen last week below a key chartist support zone at 3350-3340 has not been invalidated. Today, 3330 is resistance to surpass. As long as the index remains below this level, risk of renewed weakness to 3300 or slightly lower.


DAX 30 FUTURE (GXU8)

RESISTANCES 12032 / 12140 / 12226

SUPPORTS 11950 / 11900 / 11818

Comments

Unable to break above first Fibonacci resistance at 12032.


Disappointing session for Bulls yesterday as the index failed to break above the 12032 resistance. If the index does not manage to break above this level before the end of the week, we may see renewed weakness back to 11900 or even lower.

DAILY SCREENING OF EUROPEAN EQUITIES (STOXX 600)

TREND FOLLOWING IDEAS

Upside breakouts Barry Callebaut, Galapagos, Hexpol, Skanska, Fabege

Downside breakouts Bucher Industries

CONTRARIAN TRADING IDEAS

TRADING BUY

Near 200-day MAs -

Perfected TD setup 9 Buy Carlsberg, Industrivarden, IMI, L E Lundbergforetagen, Metso, Nokian Renkaat, Volvo

Oversold -

TRADING SELL

Perfected TD setup 9 Sell -

Overbought -

See all charts in next pages…


TREND FOLLOWING IDEAS WITHIN STOXX 600 INDEX

Upside breakouts

BARN SE Equity : Barry Callebaut AG GLPG NA Equity : Galapagos NV

HPOLB SS Equity : Hexpol AB SKAB SS Equity : Skanska AB


Upside breakouts

FABG SS Equity : Fabege AB

Downside breakouts

BUCN SE Equity : Bucher Industries AG


CONTRARIAN TRADING BUY IDEAS WITHIN STOXX 600 INDEX

Daily Perfected Setup 9 Buy signals

CARLB DC Equity : Carlsberg A/S INDUA SS Equity : Industrivarden AB

IMI LN Equity : IMI PLC LUNDB SS Equity : L E Lundbergforetagen AB


Daily Perfected Setup 9 Buy signals

METSO FH Equity : Metso OYJ NRE1V FH Equity : Nokian Renkaat OYJ

VOLVB SS Equity : Volvo AB


Technical Analysis Equity Sales

Cyril BAUDRILLART [email protected] +33.1.40.74.19.32

Methodology

All technical indicators used in this publication are based on historical prices broadcasted by Bloomberg. Several types of indicators are used in this report such as

Bollinger Bands, Oscillators (RSI, MACD), Point & Figure charts, Ichimoku, Keltner Bands and other technical analysis tools. More details on how to interpret and use

these tools are available upon request. Market timing indicators developed by Tom DeMark are also used in this report. The DeMark Indicators are a registered

trademark of DeMark Analytics, LLC. Please note that all the content shown are my personal views and based on my own interpretation of the DeMark Indicators

using the DeMark Service for Bloomberg. Please visit www.demark.com for more information.

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