A Socialist Double Bottom
- Posted by Greg Harmon
- on May 8th, 2012
The French elections were the worry over the weekend. And the result with socialist Francois Hollande the new leader had the futures markets lower and participants barking about a crash. But as we awoke Monday the market had already started to recover. More directly tied to the result, the French CAC 40 opened on its low and rose all day. The end result was a potential double bottom in the Index at 3100, as seen in the chart below. Looking closely there are indications that this will hold. First is the bullish engulfing Candle Monday, very nearly a Marubozu. Second, the Relative Strength Index (RSI) is turned back higher. Also the Moving Average Convergence Divergence (MACD) indicator looks like it will avert a negative cross. Finally the Index closed over the 200 day Simple Moving Average (SMA). That may not hold today but it is back ‘off the lows’ as they say. For now it is possible scenario, but a move over 3300 will likely start bring money back into the market. Who said that a Socialist would crash the markets?
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Gregory W. Harmon CMT, CFA, has traded in the Securities markets since 1986. He has held senior positions including Head of Global Trading, Head of Product Development, Head of Strategy and Director of Equity. (More)
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