European Markets - Major Markets Update 030418

publication date: Mar 4, 2018

Cerundolo Investment Research    

European Markets Update  

Volume 2, Issue 1
March 4, 2018

Download PDF Version here


Items of Interest:

The major European markets are on the verge of another leg down. Our first inclination of a problem afoot was with Spain’s IBEX index breaking its monthly uptrend which we wrote about in our February 6thTechnical Tuesday. This market is the “breakdown leader” of the four major European markets. The DAX is number two as it closed below the weekly MFU-2 target of 11968 on Friday, which opens the downside to 11187, another -6% lower. At number three, we have the CAC which had a weak rally off the recent low with very strong momentum divergence in place. The CAC is on the verge of breaking below the recent low at 5049, which is close to the MFU-2 target of 4760. But we suspect that this zone will give way to another leg lower. Lastly, we have Italy with the FTSE MIB on the verge of breaking support in the 21600 area. Keep a close eye on this zone.

Given what we see and describe above, we strongly feel you should avoid adding to these markets at this point in time. Our proprietary Money Flow Unit model will likely identify the optimal entry zone to start accumulating long positions, but we are definitely not there yet.

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