- The Parisian CAC 40 has initially tried to rally during the early hours on Monday but has given back up the gains rather quickly, as the market has struggled with the 50-Day EMA, and of course we have a major situation where traders are looking at this through the prism of whether or not the support holds.
That support, the €7900 level has been very important multiple times, I think that will continue to be the case going forward. As long as we can say above the €7900 level, I think there is a real shot at going higher over the longer term. That being said, if we were to break down below the €7900 level, then we could see the market dropping down to the 200-Day EMA, closer to the €7700 level.
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CAC Means Luxury
When you look at the Parisian CAC, you are more or less looking at an index of luxury brands. While a shrinking euro has a major influence on exports, it’s also worth noting that this is a statement on the state of the wealthy in the European Union and beyond. At this point, it looks like the wealthy are still doing fairly well, and as long as that’s going to be the case, a lot of the companies on the CAC 40 will continue to benefit.
Looking at the chart, we are just simply in the consolidation area between the €7900 level underneath, and the 8250 euros level above. I think this continues to be the case, and quite frankly I don’t have any interest in shorting this market, or any other index at this point due to the fact that it’s likely central banks around the world will continue to look toward loosening monetary policy. Speaking of which, the European Central Bank is almost certainly going to be cutting soon, perhaps even as soon as just a few weeks are now. That should continue to boost European stocks in general, and then by extension the CAC in Paris.
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