Technical Outlook for US & European Markets as at Feb 18, 2010

The US & major European markets (London, Frankfurt & Paris) have all rebounded above their respective short-term downtrend lines. However, their 20-day SMA lines have cut below their respective 50-day & 100-day SMA lines. The latter SMA lines have turned flattish, signaling flattish market ahead. With strong horizontal resistance just ahead, I expect the recent market rally to enter a corrective phase soon. Thereafter, these markets are likely to move sideway, with downward bias for the next few months.


Chart 1: DJIA's daily chart as at 17/2/2010 (Source: Stockcharts.com)


Chart 2: FTSE's daily chart as at 17/2/2010 (Source: Stockcharts.com)


Chart 3: DAX's daily chart as at 17/2/2010 (Source: Stockcharts.com)


Chart 4: CAC's daily chart as at 17/2/2010 (Source: Stockcharts.com)