FTSE100, 250, Dow and S&P all now touching a 20 day ma/50 day ma crossover towards the upside. With the ECB predicted to reduce IR's further and more BoE QE on the cards today, around £50billion according to reports, markets are in a wait and see mode, but as the moves seem to be expected they are to some degree priced in. The more relevant question therefore may be how will they respond if they don't get as much as they want?
There could be some profit taking if the ECB and BoE response is seen as disappointing. It is interesting to see how these moving averages do seem to be moving in line with the news flow. The market has been more positive since the Greek and Spanish deals despite the big doubts that remain. Now they are more positive on further reflationary measures being taken by central banks and the moving averages seem to reflect this.
Things could still reverse pretty quickly and after the market moves of the last week or so we should expect to see some profit taking sooner rather than later, but right now on the basis of probability the charts look more positive than negative, at least using the shorter term 20/50 ma. Any profit taking and fall from here should remain positive as long as price doesn't fall below the moving averages as they trend upwards.
The Eurostoxx50 has crossed to the upside and looks the most positive so far.
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| FTSE100 |
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| FTSE250 |
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| Dow |
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| S&P |
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| Eurostoxx50 |
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