#Indices Forecast: #CAC,#SP500,#DAX,#NASDAQ100 (27 March 2024)

CAC Forecast: Continues to See Massive Moves Higher

The French CAC finds support, indicating bullish momentum, with a focus on €8100 as a key support level. ECB policies could further influence the market trend.

• The French CAC initially pulled back just a bit during the trading session on Tuesday but found buyers yet again.
• Ultimately, this is a market that I think continues to see a lot of bullish pressure, as we continue to see a lot of momentum.
• At this point, it looks like the €8100 level continues to be massive support, therefore I think you need to look at it through that prism.
• The market pulling back to that area almost certainly will offer some type of buying opportunity, as we have seen a lot of action in that area.

ECB and monetary policy

The European Central Bank will of course continue to take front and center stage when it comes to what happens with stocks on the continent, as traders are now starting to bet on the idea that perhaps the European Central Bank will have to loosen monetary policy. If that’s going to be the case, then it does make a certain amount of sense that stocks go higher due to the fact that most of what we see these days has to do with liquidity and not so much with the overall economy.

As for the floor in the market, I believe that it is at the €7900 level, an area that previously had been massive support and of course features a 50-Day EMA at the same time, so it’s a bit of a “double whammy” for technical analysts. At this point in time, we have to remember to buy the dips, because that seems to be with the way that most stock markets around the world are behaving, and the CAC of course is no different at this point in time.

DAX Forecast: Continues to See Upward Momentum

DAX experiences robust growth, breaking above €18,400, signaling potential climb towards €18,500. Its performance could set the trend for European indices.

• The German DAX had another strong session on Tuesday as we continue to plow higher.
• We are above the €18,400 level now, and it looks like we are going to try to get to the €18,500 level, and further than that to the upside.
• Keep in mind that this is the premier “blue-chip index” in the European Union, so I think it is most certainly worth paying close attention to.
• Ultimately this is a market that will continue to see a lot of hot money chasing it, as we are in a very strong uptrend.

Germany Leads the Way

Germany will lead the way for the rest of the European continent, so even if you are not trading this particular index, you should pay close attention to it as it could give you a bit of a “heads up” as to where we might be going in other indices such as the MIB, CAC, AMX, etc. Ultimately, this is a market that looks extraordinarily bullish and is much like US indices, being dragged along by momentum.

The ECB more likely than not will have to start to liquefy the markets, perhaps giving traders the ability to continue to push prices higher. After all, if Germany is in fact going to be in a recession, then it makes a lot of sense that traders are trying to get ahead of any ECB monetary policy decision. Ultimately, the worse the economy does in Germany, the better the stock market will do

Underneath, I see a massive amount of support near the €18,000 level, and therefore you need to be paying close attention to it. I think given enough time, not only with the €18,000 level be support, but so would the €17,950 level. In other words, this is a “buy on the dips” type of market and I think that will probably continue to be the way forward for the foreseeable future. In general, I have no interest in shorting the DAX, at least not until we break down below the €17,500 level, which is basically where the 50-Day EMA is hanging around. Until then, this is a mark that looks extraordinarily bullish.

S&P 500 Forecast: Seeing Sideways Action

If we break the highs of last week, then we could very well go looking to the 5,300 level, which I think we hit sooner or later.

• The S&P 500 was a bit choppy early during the trading session on Tuesday as we continue to look to the upside.
• But I think at this point in time, we may be lacking a real reason to get moving.
• After all, the major announcement of the week is on Friday, so I think a little sideways action does make a certain amount of sense.

Keep an Eye on Longer-Term Trends and Behaviors

But in the longer term, if you continue to buy dips, you will do much better, at least until something fundamentally shifts. At this point, the 5,000 level for me is the bottom of the market, with the 50 day EMA sitting just above there. I'd be particularly interested in the S&P 500 closer to the 5,185 level, which was an area of previous resistance, and therefore I think a little bit of market memory comes into play at that region.

If we break the highs of last week, then we could very well go looking to the 5,300 level, which I think we hit sooner or later, regardless of which direction we go next. I'm just looking for value. I think that's the way you have to play this. You have to be patient, you have to scale in, and you have to buy it when it pulls back. What the economy is actually doing is totally irrelevant. We're in a nice uptrend.

NASDAQ Forecast: Looking for Next Move

Keep in mind that the world is waiting for the Federal Reserve to start cutting rates again, and therefore everybody's excited about owning stocks.

• As you can see, the NASDAQ 100 has shown itself to be somewhat dead money over the last couple of days as we are trying to sort out what to do next.
• Ultimately, this is a market that I think is bullish overall, but there isn't much in the way of economic announcements to move the markets between now and Friday.

How to Trade It…

Buying dips continues to be the prudent way to approach this market because it offers value in what is obviously a very bullish run. If we break above the highs of last week, then the NASDAQ 100 could go looking through the 18,500 level, followed by the 19,000 level, which I think is very possible. That being said, as long as the fundamental narrative stays the same, I just don't see an argument for shorting.

While the economy may or may not be strong, its all about momentum on Wall Street, and you must remember that a lot of the noise on the Street is New York centric, which isn’t reality. However, price is reality – and that’s what matters. The markets will continue to cheer bad economic news, based on the idea of liquidity being added by the Fed.

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