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Buy-The-Equity Dip Dominates

Global equity markets continue the recent pattern of trade that has the majority of daily price action hitting via the futures market, rather than showing strong momentum in cash trade. Having recently held a solid test of support, the three main regional equity markets now have to absorb a week that is full of red-flag economic releases.

Now that earnings season is unwinding, the sporadic futures market moves that come in direct correlation with headline economic releases now a earnings season now earnings season is unwinding, the sporadic futures market patterns that come in direct correlation to headlines news releases, may have the chance to reform trends and then create consistent momentum.

The Japanese Nikkei completed the recent long signal that moved it from 10650, and hit its target overnight at 10750. This may now lead to a test of support at the 20-day simple moving average at 10610. Momentum and price action are bullish, although near-term trends are flat, after the recent moves lower that bounced off support around the 50-day simple moving average. Now would be the time to look for consolidation, rather than to be looking for new positions on the Nikkei.

German DAX trade has consolidated the recent test of support that found buyers the 50-day simple moving average around 7150. The index is now consolidating around 7300, and the 20-day simple moving average, which is creating a trading channel that may build cause and effect for the subsequent moves to come in March. Momentum and price action are bullish; in-line with major equity movement that shows mixed trend reads because of recent moves lower to test support. There are no signals developing, either long or short, on German DAX trade at this point in time.

S&P 500 futures trade is holding around 1330, which is back in the channel held during the middle part of February. Momentum is bullish and a new long signal will be confirmed with a break above 1440, targeting 1445, and then 1450. As yet there are no confirmation signals on the short side of S&P trade, with the pattern in place for 2011 that is holding in buy-the-dip mode.