With very few exceptions, this week we find the CAC40 in the same configuration as the previous week. Here is a quick summary on the same line as the last weekly point. We will therefore draw some conclusions at the level of position management..
The CAC40 traded at 7,020 points as of the close on Monday 16 January during our latest weekly update.
We find it on Friday at 6,995 points. An insignificant difference even if, during the week, a boost of optimism pushed it towards 7,100 points to then pick up an air pocket the following day (Thursday) and close Friday flat by bouncing on the support of its algorithmic channel (see arrow gray below).
Brief summary of the situation
The CAC40 continues to evolve in its algorithmic online behavior (the last orange channel).
Its performance is under the control of algorithms: this is exactly what I brought to your attention in last week’s analysis.
I offer you an update.
- Over the past six months, the CAC40 has been driven by three trends known as online trends (the orange channels). These trends have nothing to do with classic trends.
- These three trends have the same progression angle: 70° as indicated in the graph above.
- The width of their channels are strictly identical (the small red double arrows separating their resistance and their support).
- The first two increased the CAC by 800 points and lasted a month and a half each.
How far will this push go?
The first online trend started in the first days of July starting from 5,800 points and stopped in mid-August at 6,800 points (800 points in a month and a half).
The second starts around October 20 from 6,000 points. It will stop at the end of November at 6,800 points (increase of 800 points in a month and a half to five days).
In fact I did a copy/paste of the first two to frame the third – the one in which the CAC continues its course for the moment.
The third, the one underway, began at the end of November starting from 6,400 pts.
If the algorithmic steamroller continues to push the CAC40 into this online trend which is identical to the first two for now, then the target theoretical the thrust therefore logically becomes 6,400 + 800 = 7,200 points.
CQFD.
In any case, on a practical level, I will consider that:
- As long as the current online trend channel is active, care must be taken to avoid craving shorter the CAC and that we obviously let our bullish positions carry.
- A reference point in the very short term ? The support of the channel is currently moving towards the 6,980 point side. So as long as it is not broken at the daily close, we can continue to remain “blissfully bullish” (to use an expression taken from the previous weekly update).
- To see if the company publications can stop this nice mechanism, but for the moment and for those of you with a medium-term oriented portfolio, let’s say that until the 6,800 points are broken, no bearish warnings (medium-term – let me underline a second time).
Have a good week,
Gilles,