By Dominic Picarda.
While there’s a lot of talk of the indices having gone too far, too fast and being overstretched right now, there’s little evidence of this where it counts. Only the DAX is formally overbought according to its daily relative strength index, whereas the S&P 500 and FTSE 100 are not. As such, I see scope for ongoing gains in the near term. This is especially true of the S&P, whose uptrend is in better shape than that of the FTSE. As such, I am sticking to my bullish guns on the indices, but retreating to neutral from bearish on EURUSD.
I shall be speaking about “the Ideal Portfolio” at the Lecture Club in London on Thursday 28 November
S&P 500
Wednesday: “…I’d await a pullback before seeking to ride a move towards 1845.” The S&P is now indeed pulling back as I had thought it might, unwinding the overboughtness on the fourhourly chart. I’d like to see this process go a bit further in order to set up the sort of bounce to 1845 I’ve been calling for
Support: 1782.1 – Resistance: 1845.0
Support: 1767.1 – Resistance: 1827.1
Support: 1740.7 – Resistance: 1807.2
Support: 1723.7 – Resistance: 1797.2
DAY: Stay long or buy a bounce from around the 13-fourhourly EMA
POSITION: Stay long
Dominic Picarda CFA, CMT writes the Trader column at http://www.investorschronicle.co.uk/comment/the-trader