The CAC in Paris continues to see a lot of noisy trading, but is still very much a strong index that people will continue to pay attention to.
CAC 40
The Parisian index looks as if it is struggling a bit to continue the upward momentum, but we've recently seen a strong move to the upside, so a little bit of sideways action actually makes a bit of sense. After all, we have to digest those gains, and digesting those gains means churning. The short-term pullbacks out there, more likely than not, will have a lot of traders interested in buying to find some type of value, but I also recognize that the overall trend remains very much intact, even if we do pull back, as long as we can stay comfortably above the 8,500 euro level.
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Energy Risks and EU Economic Signals
The situation in Europe, of course, is somewhat fluid in the sense that we have to pay attention to whether or not energy becomes an issue. The situation in the Middle East continues to be one that's very fluid, and a lack of energy in Europe will do a lot of damage to a lot of the indices, including the CAC in Paris. This will continue to be a situation that I will have to pay attention to.
The economic numbers in the European Union have picked up a little bit, though, and that's a good sign perhaps for the luxury sector, which is a huge part of the Parisian index as well. And of course, Airbus has been fairly strong as of late. So, all things being equal, I think the upward momentum makes sense. I do think it is probably only a matter of time before we see some type of continuation. The question at this point is, will we get an opportunity to buy the CAC on the dip? I think it will possibly be the way forward at this point in time.
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