After 18 months - since the Corona price low in March 2020 - with very pronounced price gains on the international stock markets, the technical cloudiness is solidifying.
Here you can find the weaker economic expectations, the increased inflation data and especially the tapering discussion of the US Federal Reserve, which is preparing the very slow entry into the exit of the ultra-loose (US) monetary policy.
The associated deterioration in market breadth in the sectors and in the standard values in many stock indices signals that the upward momentum will weaken significantly. As a consequence, the S&P 500 recently ran out of the accelerated upward trend of the last few months, so that the technical target price of 4400 to 4450 should not be changed for the rest of the year. The Nikkei 225 left its medium-term “flag” in the direction of 30,000 to 31,000, but the medium-term relative weakness in the international index comparison should persist. In the Euro Stoxx 50, there are signs of an exit from the very steep 18-month bull market, so that the price target of 4200 for 2021 also remains unchanged. In the Dax is the attempt to be over 16.000 upwards, not successful. Without a new technical buy signal, the technical target zone of 15,500 to 16,000 for the rest of 2021 will remain.
Overall price increase of +340 percent for the Nikkei
The S&P 500, a price index, has been in the current and unfinished technical bull market since March 2009 (starting at 666.6). Due to the new all-time high of 4545.85 (beginning of September 2021), the overall price gain - also supported by share buybacks - of 582 percent. In addition, there is an annual (gross) dividend yield of currently around 1.5 percent. From a medium-term technical point of view, the S&P 500 has been in a bull market since the Corona interim bear market low at 2192 (March 2020). From June 2020 (starting at 2951), this has run into a medium-term upward trend, which is now at 4000 points and is slightly below the rising 200-day line (currently at 4115).Since November 2020 (starting at 3600), another upward trend (upward trend line at 4400) had emerged, which led the index to new all-time highs, but also to a significantly overbought position in the medium term.
Given the deterioration in the breadth of many US stocks (with an emphasis on economically sensitive stocks), it is not surprising that the S&P 500 has sidestepped this uptrend. This means that the technical signs on Wall Street are pointing to consolidation below the resistance zone in the area around 4540 to 4550. Since the dismantling of the medium-term overbought situation should take a few weeks, the convincing technical arguments are now missing to reach the technical target area of 4400 to 4450 to be adjusted for 2021 with a view to the rest of the year.
The Japanese Nikkei 225 (a price index) started its bullish cycle in October 2008 at 6995. With the annual high of 30,795 (September 2021), an overall price increase of +340 percent has arisen so far. From a medium-term technical point of view, the index - after an upward rally at the beginning of the year to 30,714 - was in a sideways / downward consolidation (“flag consolidation”) for many months. Most recently, the index - with the fantasy of new economic impulses after the parliamentary election at the end of November 2021 - ran upwards with a buy signal from the flag, but this also meant that the Nikkei 225 was unable to deal with the medium-term, relative weakness in the index comparison in 2021. As a consequence, it should come as no surprise if the index falls below the resistance zone of 30,500 to 31 in the coming weeks.000 will get stuck in a new sideways movement or consolidation.