- The CAC rallied a bit during Parisian trading on Wednesday, but it looks like the €7,350 level continues to be a bit of a barrier.
- This is an area that previously had been support, so a little bit of market memory comes into the picture. What I find interesting is that the 50-day EMA is starting to approach that same area, so it could be very difficult to overcome.
- We formed a shooting star during the Tuesday session. The Wednesday session looks somewhat similar. So, if we do get a breakout, what that tells me is that there is a lot of resiliency to the upward momentum.
- The volume is somewhat flat, but that's not a huge surprise. This is a market that will continue to see a lot of questions asked about it, but at this juncture, I think it is only a matter of time before we have to move.
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If We Break Higher
All things being equal, if we can clear the 7,400 euros level, I think at that point you'll see a short covering rally. And it's probably worth noting that the CAC is trying to form a bit of a double bottom based on the 7,100 euros level.
This is a market that will either go sideways for a while and kill time or it will break out to the upside for what it's worth. Its counterpart in Germany is straight up in the air like a rocket.
So sooner or later, you would think that it might have a bit of a knock on effect, although obviously the French economy is much frailer than the German one right now. It does make a certain amount of sense that you would have some carryover from that market. A move below the 7,100 euros level could open up a move to the 7,000 euros level, but right now, I think we're in the process of trying to find the bottom for Paris.
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