Our expectations were
true about Germany (DAX) … last week we posted about Germany as an example of
Europe Market since it is considered one of the major economies and the leader
of the Europe market … We tried to answer the following questions “Will Europe
economy start 2016 with a better condition?” … Fundamental guys said it will start
the year with improvement since the price of oil is tanking, which eventually
will reduce the cost of production and create a comparative advantages compared
to US products … the devolution of Euro also another supporting elements …
However, all their
expectations were not true and the graph shows different view and this is what
we have expected … Reuters posted an articles yesterday talking about Europe
markets updates and they said that Oil prices actually is producing the current
negative impacts and it is leading stock markets to go down! So what is the
answer? Who is right? And Where the European market will go in 2016?
From our perspective,
all fundamentals should support their opinions and expectations by technical
analysis … technical analysis reflects the actual behavior of the market and
provides accurate information about people actions and what they really
believe…
So let get back to our chart and see what
happen last week … as we expected, there was a high probability that the market
will go down and there was a slim chance to go bullish (3 days) … please refer
to my earlier post for more information …. The price went down from 10380 to strong support 9636 and closed under it at 9545 … the
opportunity for improvement will occur again next week, the market has 8 days
to go back to 10380, however it is a low probability … the
next major support is 9345
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