We posted a large red candle yesterday in ICE Brent Crude Oil and if you combine the 9th and 12th May on the Daily Candlestick Chart you get a Bearish Engulfing Pattern. Does this means we’ve seen a top? Hang on a second! The phrase “One swallow doesn’t make a summer” springs to mind!
If anything a bit of a pullback in Brent Crude and NYMEX Crude wouldn’t do any harm to the Bulls, as it’s not healthy to go up in a straight line. The buyers are bossing things right now and we don’t think any pullbacks will last long (4 days of weakness at the end of April were taken back in just 2 sessions).
On the other hand Equity markets look like they’re struggling, and the old adage of “Sell in May and go away” is being rolled out left right and centre.
The “full version” of this phrase is “Sell in May, Go away, come back on St. Leger’s Day”. St. Legers day is a horse racing festival in September, by the way! (It’s held in Doncaster, a place that will be feeling rather down in the dumps come September because they’ll still be playing League 1 football after Southend United beat them in the Play-offs this Friday).
I digress! Back to Equity markets: The Eurostoxx 50 Future is one of our favourite benchmarks. It’s a great contract to trade, with lots of volume, decent enough volatility, and no horrible periods of illiquid trade. We have broken trend support in this one today (13th May) and if we close below 3760 we’ll look for further weakness going forward. 3674 is our first target to the downside. Once we get through here 3545-75 is the next area of support to target.
We are planning to try out adding a few Individual Equity recommendations to the members area of our website, including daily technical analysis on Vodafone (far and away the most actively traded stock in the UK) and a “pick of the day” from elsewhere in the FTSE 100.