Weekend Update - ES, CAC, DAX, & NIKK

The S&P 500 Futures (ES) - Daily Chart
The daily chart of Es illustrates that it has broken out of an ascending triangle. It has back tested the breakout line to complete a wave iii to wave iv pullback. Wave v is around 1334. Stochastics are now crossing over which is bullish. ES is about to take out Friday's highs. This is bullish action.

Dow Jones Industrial Average Futures (YM)- Daily Chart
The Dow futures are the most impressive, because the last hour on Friday we got some window smashing, and then the minute the market closed, Dow futures shot up 25 points or so off of the lows. Consequently, there is a discrepancy in fair value, which is 25 points lower. Futures are now up 39 points on the day. Therefore, we are up huge on the day on futures in the Dow. The highs on Friday were 11250, and we are now at 11230. We have gotten back 75% of any decline. After this rally over next few weeks or month, the broader market will be due for a correction.

French CAC 40 Index (CAC)- Daily Chart
The overseas markets continue to rally and are on fire. The FTSE, DAX and the French CAC 40 Index (CAC) continue to out perform the US markets and make new 52 week highs. As you can see from the chart, the CAC 40 is 600 points higher since it made a bullish trend reversal back in November of 2005. The CAC 40 has been trading in a parabolic uptrend channel and consistently holding it's moving averages and the uptrend line. Indicators and oscillators are in a full blown bullish trend reversal, with no bearish divergence.

German DAX Composite (DAX)- Daily Chart
Like the CAC 40, the DAX rally has been impressive ever since it placed it's lows in November at 4762.80. The DAX finally crossed 6000 this week. The DAX is up 1200 points from the lows, which is also after the DAX broke out of the Reverse symmetrical triangle. The DAX has been trading in a parabolic uptrend channel and consistently holding it's moving averages and the uptrend line. Indicators and oscillators are in a full blown bullish trend reversal, with no bearish divergence.

The Tokyo Nikkei Average (NIKK)- Daily Chart
Like the European markets, the Nikkei continues to make new 52 week highs as well. As you can see from the chart, the NIKK held the uptrend line at 15553.10 and formed a doji there, which is a reversal type candle. The NIKK then rallied sharply upwards ever since, and has broken out an ascending triangle. I believe the NIKK goes higher from here, after the bull flag is completed. All indicators are bullish. The PPO is pointing up. Watch for a parabolic move in the PPO. The stochastics are trending. If you want to play the NIKK, I recommend that you look at the Japan i shares ETF, which is the EWJ.