Recent Weakness in Eurostoxx 50 Futures Considered Corrective

A bullish theme in Eurostoxx 50 futures remains intact and recent weakness appears to be a correction. Moving average studies are in a bull-mode position, signalling a rising trend cycle. Furthermore, recent gains confirmed, once again, a resumption of the uptrend and this has maintained the bullish price sequence of higher highs and higher lows. The focus is on 4636.70, a L/T Fibonacci retracement. Support to watch is 4518.40, the 20-day EMA. A bullish theme in S&P e-minis remains intact and this week’s fresh trend highs reinforce current conditions. The move higher confirms once again a resumption of the uptrend that started Oct 27. The contract has also recently cleared resistance at 4738.50, the Jul 27 high, reinforcing current positive trend conditions. Sights are on 4854.75 next, a Fibonacci projection. On the downside, initial firm support lies at 4726.28, the 20-day EMA.

• Japan's NIKKEI closed lower by 141.62 pts or -0.42% at 33539.62 and the TOPIX ended 3.38 pts lower or -0.14% at 2362.02.
• Elsewhere, in China the SHANGHAI closed higher by 40.09 pts or +1.38% at 2954.704 and the HANG SENG ended 418.69 pts higher or +2.52% at 17043.53.
• Across Europe, Germany's DAX trades lower by 9.16 pts or -0.05% at 16732.98, FTSE 100 lower by 3.41 pts or -0.04% at 7721.5, CAC 40 down 9.72 pts or -0.13% at 7562.1 and Euro Stoxx 50 down 3.25 pts or -0.07% at 4525.13.
• Dow Jones mini down 47 pts or -0.12% at 37959, S&P 500 mini up 1.25 pts or +0.03% at 4834.75, NASDAQ mini up 42.5 pts or +0.25% at 17155.75.