The CAC 40 remains little changed today as prices continue to consolidate under resistance. So far the Index is trading down -.25% on the session. Of the 40 listed components, ArcelorMittal again leads the Index trading up 3.29%. European Indices as a whole have paused as markets wait for two key data points this week. First is the European Central Bank rate decision on Thursday. This is immediately followed by U.S. Non-Farm Payroll figures released on Friday. Both of these events have been marked as high importance events, and have the potential to cause volatility in the equities markets.
Price action for the CAC 40 is potentially set to close lower for the first time in the last 6 trading sessions. Today’s move lower occurred after first testing resistance found at a previously mentioned 78.6% retracement value near 4,536.89. Traders looking for a return of bullish market conditions, will monitor this value for a breakout to new highs. Alternatively, if prices turn lower, it suggests that prices may decline back towards the May 2016 low at 4,244.50.
SSI (speculative sentiment index) for the CAC 40 (Ticker: FRA40) has flipped negative to read at -1.10. Currently 48% of positions are long, which is congruent with today’s consolidating market conditions. Traders looking for a breakout, may wait to confirm a directional move with SSI. If prices breakout higher, SSI may continue to decline toward a negative extreme. If price moves lower, traders should look for SSI to flip back towards a positive reading.
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