10/06/2011

English FTSE 100 and Spanish IBEX 35 got sellsignals at close on Friday

INTERNATIONAL STOCK MARKET INDEXES CLOSE TO BECOME BEAR MARKETS

FTSE 100 and IBEX 35 got strong technical sell signals on close Friday, June 10. Both indices have now got a downside cross of the 8 weeks moving average (MA) and the 21 weeks MA and both MA:s have turned down. IBEX has also broken a 28 month triangle on the downside indicating the possibility of a drop from current 9.540 to the 5.000 area that is a 50 percent correction. However the weekly close occurred at or just above the triangle line. That means the first trading sessions of the week June 13 should be watched for complete confirmation. A jump back into the triangle only means that it will take a little more time before a clear penetration occurs since the falling MA:s will force the market down sooner rather than later.

Dow Jones Industrials and S&P 500 indexes has not got a weekly MA sellsignal yet but the weekly key  reversal last week signals that it might come within two weeks. Next week could be violent with a short covering rally up to the falling 8 weeks MA and above. If this occurs it will likely come down again quite quickly because the smart money will sell. Germany Dax is in the same situation.

ADVICE: Sell FTSE and IBEX and watch Dow and SP500.

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