INDICES : tread lightly!
​Indices are in situations that are very uncomfortable for trading. Weak indices -such as Southern European indices- are already oversold. They are hitting intermediate supports.Yet, strong indices -such as the Nasdaq 10 - are below the middle of their consolidation, which means that one should favour the downside for the time being. Technical analysis theory tells us it is better to sell weak assets, but also that we should not sell above supports. Trading experience teaches us that one should not open new trades when the technical invalidation level is distant from prices -the cost of error is too high. Let's add that we will soon reach the period when indices have an 80% chance to rise, and the Fed will be talking soon.... Rationally, this situation is not good for trading... We will limit our clear-cut views in the coming days, but then, we also know that some of you have to remain active, whatever the conditions. We will not go completely quiet, but our probability of being right is not at its best!
DayByDay is an independent research company providing global macro and single stock analysis, recommendation and allocation based purely on behavioural finance methods. Those include long term cycle analysis, sentiment analysis, and technical trigger. DayByDay serves all clients in need of practical and precise publications to make effective market decisions, on any time horizon, from a few hours to a few years.
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