Equities Poised To Fly
As I write this, several key equity markets look set to fly.
Regular readers of Business Monitor Online and BMI‘s weekly Emerging Markets Monitor magazine will know that my colleagues and I have been mentioning the 8,850 level for the Dow Jones. A break above this point could see global equities really fly, which of course would help out BMI‘s positive view on commodities such as soy and corn.
Already this morning we have witnessed major breaks higher in the South Korean Kospi and the Hang Seng indices, which have lifted the FTSE and the Dow future. While the latter has pushed through 8,800, and is now eyeing the key 8,850 level, the FTSE is trading above 4,450 as I write. As the accompanying chart shows, resistance exists at 4,500, a break of which sets up a move to the major 4,800 level.
FTSE Index
A break of that level would suggest a rally towards 5,500, and would clearly be dependent on a significant turnaround in the UK’s underlying macroeconomic fundamentals. As I continue to argue, while my colleagues and I do not at this stage wholly believe in such a dramatic improvement in the global economy, we will not ignore the market technicals. This was the case back in March, when we first picked the recovery in bank stocks and the China Shanghai Composite index. Once again, we could be on the verge of some major opportunities in the equity market.