How these major indices can make new highs

Charts suggest European stocks could hit post-Credit Crunch high and US tech a new record by doing this.

A regular complaint relates to the quantity of media market “experts” queuing up for interviews with prophecies about the end of the world being nigh. In the media, where quantity has no relationship to quality, we thought it perhaps an idea to examine some world markets, trying to define areas where some hesitation appears probable.

Staying close to home, the Euro Stocks 50, presently trading around 3,690 points, is presently flirting with something we call a “stutter level”, a point at which a glass ceiling will often form.

In the case of the EU50, this problem level has been evident since 2017 at 3,685 points and is finally starting to show some sign of hopefully breaking free and move upward.

If our thoughts on this scenario are correct, movement now above 3,732 points calculates with an initial ambition at 3,975 points. Only with closure above such a level dare we mention “top” should prove to be around the 4,300 level.

Certainly, we see this point as an ideal number to try a short with a fairly tight stop at 4,325 if gullible or 4,400 if sane. If historical experience is anything to go by, reversal could see a journey to the 3,000-point level!

Source: Trends and Targets      Past performance is not a guide to future performance

The Nasdaq – or US Tech 100 – is presenting an interesting scenario. We’ve a strong argument which favours something traumatic, should the market achieve 8,634 points.

While we can calculate a secondary at 9,475 points, we suspect real life shall intrude, especially as the market is already pretty close to our 8,634 target. Anything now beyond 8,450 looks capable of reaching this level.

The US Market is always quite prescient when approaching major target levels, thankfully often showing a willingness to bypass them by simply gapping the index upward at the open repeatedly. If a cunning plan is to be enacted, it shall be worth watching for these gaps appearing anytime now!

We’re intending to spend this week running the numbers against various world indices.

Source: Trends and Targets      Past performance is not a guide to future performance

Alistair Strang has led high-profile and "top secret" software projects since the late 1970s and won the original John Logie Baird Award for inventors and innovators. After the financial crash, he wanted to know "how it worked" with a view to mimicking existing trading formulas and predicting what was coming next. His results speak for themselves as he continually refines the methodology.

Alistair Strang is a freelance contributor and not a direct employee of Interactive Investor. All correspondence is with Alistair Strang, who for these purposes is deemed a third-party supplier. Buying, selling and investing in shares is not without risk. Market and company movement will affect your performance and you may get back less than you invest. Neither Alistair Strang, or interactive investor will be responsible for any losses that may be incurred as a result of following a trading idea.