It will be interesting to see if traders are willing to hang on to this market over the weekend and hold a bullish position.

The German index as a rally during the training session on Thursday to break above a major downtrend line. This downtrend line was at the top of the down-trending channel, so this course is something that’s worth paying attention to. That being said, we are still very much in a downtrend, so we need to be very cautious about trying to get overly bullish here. There are quite a few things to watch in the next couple of days, so I think this is going to be one of the more interesting stock markets that follow.

The €14,250 level was an area of resistance that we are now threatening, and if we can break above here it’s possible that we could get looking to the €14,500 level. After that, the market could then go to the €14,750 level, where the 200 Day EMA said. At this point, the market rallying would take quite a bit of effort, and I suspect that you are more likely than not going to have to pay attention to other indices around the world to get a feel as to whether or not the “risk-on rally” could continue.

Keep in mind that markets have been sold off rather drastically, but I would also make a counterargument that the most impulsive move as of late was to the upside as we bounced from the lows back in March. We could be seen an attempt to validate that move, so sooner or later you were going to have to go ahead and buy this market if we do continue to see this type of action. I suspect you will probably need to pay attention to the FTSE 100, CAC, and maybe even the MIB to get an idea as to where this particular index may go.

If we were to turn around and break down below the lows of the Wednesday session, then it’s likely that we pull back again, perhaps going to the €13,500 level. While I’m not quite ready to go long in this market, the reality is that we made quite a big move toward that possibility during the trading session on Thursday. It will be interesting to see how this week closes out, and whether or not traders are willing to hang on to this market over the weekend and hold a bullish position. That could be the final clue.

This is a market that continues to be “fade the rallies”, as this has been such a major downtrend for so long.

The British pound initially tried to rally during the trading session on Thursday, but as you can see on the chart we have rolled over yet again. At this point, the market looks as if it is going to continue the overall downtrend and the descending triangle. Looking at this chart, the market is negative, testing the 1.30 level underneath. The 1.30 level underneath is a large, round, psychologically significant figure, and an area that has caused quite a bit of support as of late.

What is worth noting right now is that there is a lot of support underneath the 1.30 level, that extends down to the 1.28 level. In other words, it is a very “thick zone of support” that could come into the picture if we try to break it down. I think it is likely to continue to see a lot of noisy behavior between those two levels, so I would be very cautious about jumping “all in” at this point. I think it is going to take quite a bit of time to get down to the 1.28 handle, unless of course something fundamentally changes.

If we were to turn around and break above the highs of the trading session on Thursday, we could go looking to reach the 1.32 level, which I think is considered to be a massive resistance barrier. Furthermore, not only has it been important multiple times in the past, but we also have the 50 Day EMA racing through that level, and falling. That should offer a bit of dynamic resistance, and therefore I think will attract a lot of attention in and of itself.

As things stand right now, this is a market that I think continues to be “fade the rallies”, as this has been such a major downtrend for so long. The market looks as if it is trying to chip away at the 1.30 handle underneath, but at this point, the amount of pressure has likely been building up, so whether or not we break down below the recent lows is a completely different question.

If we turn around and break above the 1.32 handle, then it is possible that the market could reach the 1.34 handle, which was a resistance barrier and is currently where we are seeing the 200 Day EMA move about as well.

Ethereum has rallied a bit during the trading session on Thursday to reach a minor downtrend line. It looks like we may go looking towards the 50 Day EMA, as Ethereum continues to be a relatively stable performer. This will mean that we need to get beyond the downtrend line first before we can have that argument.

 

On the downside, the $2500 level continues to be supported, extending down to the $2400 level. If we were to break through all of that it could open up fresh selling in the Ethereum market, which I still believe is a very likely possibility. If that happens, we could break down towards the $2000 level, which is a large, round, psychologically significant figure. The $2000 level will attract a lot of attention, just as a breakout to the upside and a test of the $3000 level could be.

This is a market that recently had seen the “death cross”, and therefore longer-term traders may look at this as a market that is ready to go much lower. The crypto market has been struggling due to the fact that monetary policy is tightening, and the risk appetite out there will continue to slide as a result. As long as that is the case, crypto will continue to cause some issues, and therefore I have a hard time believing that you should be dumping all of your money in right now. If we do see a turnaround, you should have plenty of time to get involved.

The only thing I think you can count on is a lot of volatility, and you need to pay attention to Bitcoin which has been a bit sluggish, so that is probably going to continue to be the case over here as well. Because of this, I think we need to see the market grind back and forth in general and perhaps build up a bit more stability before going “all in.” Furthermore, we need to see more risk appetite out there for a sustained move in order for crypto to follow along with other assets. The Federal Reserve certainly looks as if we are going to see them hiking rates almost every meeting between now and the end of the year, so tightening monetary policy will continue to work against this market.