The CAC initially fell during the trading session on Friday, but continues to see buyers on dips at the crucial 200-day EMA indicator. With this, the market is trying to tell us something, I believe.
CAC 40
The CAC initially fell during the trading session, but for the 3rd day in a row has seen buyers come in and defend that technically important 200-day EMA. This is a market that continues to be very noisy in general, but I think there are a lot of questions right now about the luxury sector in general. The Chinese demand just hasn't been there, despite the fact that China has stimulated its economy a little bit. So now we find ourselves at a very important technical level, trying to figure out if there are going to be buyers here.
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Luxury Sector Drag and Key Inflection Levels
On a break above the €8,300 level, I think this might be interesting, but until we get that on a daily close, I don't know that I believe the bullish pressure. I don't necessarily believe the bearish pressure either. We're just somewhat stuck, and that makes a certain amount of sense because not only do we have the drag from the luxury sector, Hermes, LVMH, etc., we also have to worry about the situation in the Middle East and how that influences inflation via energy, not just for France, but for everybody.
So, this is somewhat of a wait-and-see attitude, but on a nice impulsive candle to the upside, I like the fact that you have a very clear area of inflection here, a nice place to put your stops after the last couple of days of negativity. Therefore, it is at least intriguing to me. If we break down below the last couple of days, then I anticipate that this market will go looking toward the €8,100 level.
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