Potential signal:
- I am a buyer of the CAC 40 above 8500, with a stop at 8400, and a target of 8725.
We continue to build a consolidation area at important levels. This market will be watching many things, and not all of them in France.
CAC 40
The Parisian CAC has been positive during trading on Wednesday as we find ourselves threatening the all too familiar 8,500-euro level. The 50-day EMA sits right there as well in bit of a barrier, but if the market can clear the 8,500-euro level, it might actually provide a little bit of a boost for momentum.
There are several things moving the markets at the moment, not the least of which would be the luxury bid in Paris, with LVMH up over 1%, Hermès up 1.5%, but there are others, such as Airbus, that are up 1.3%, and Safran up 1.6%. There are some drags out there, for example, Dassault Systems is down 1.3%, and overall tech seems to be soft heading into the Nvidia earnings.
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The Iranian story has rotated from war risk to economic pressure as crude has dropped, and that, of course, helps Europe as well, being so highly vulnerable to energy shocks.
Earnings Catalysts and Jackson Hole Ahead
The Nvidia earnings in America tonight will have a bit of an influence on most tech stocks, especially when it comes to anybody touching the artificial intelligence trade.
The market will continue to keep an eye on Jackson Hole this Friday as well, as the Fed Chair gives a speech. After all, Federal Reserve interest rates do have a major influence on world markets, and we will see how that plays out here.
All things being equal, we are sitting in a zone of previous resistance between 8,400 euro and 8,500 euro, which now is trying to act as support. Bullish behavior could get FOMO traders involved again.
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