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CAC 40: Long-Term Bullish Cycles

Published 05/29/2018, 10:46 AM
Updated 03/09/2019, 08:30 AM
FCHI
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Firstly the CAC 40 index long-term bullish cycles have been trending higher with other world indices. In September 2000 it put in an all-time high. From there it followed the rest of the world indices lower into the March 2003 lows which was a larger degree pullback. From there the index rallied with other world indices again until June 2007. It then corrected the rally again as did most other world stock indices. It ended this larger degree correction in March 2009. From those 2009 lows, the index shows a 5-swing sequence that favors further upside.

Secondly, in January 2018 price had nearly reached the area of 5623 – 6034, which is the .618 – .764 Fibonacci extension of the 2008 to 2015 cycle. This is a usual area for a 5th swing of a cycle. The thought here is that momentum indicators suggest it ended the cycle from the 4th swing low which was in February 2016. The dip to the March 2018 lows in the 6th swing corrected the cycle up from February 2016 lows. The analysis continues below the chart
Monthly CAC 40

I would like to briefly mention how the extension areas are measured which is as follows. Use a Fibonacci extension tool on a charting platform. On this chart, point 1 will be at the beginning of the cycle at the 2009 lows. From there on up to the 2015 highs, marked with a 3, will be point 2. The point 3 will be down at the 2016 lows. This point is marked with a 4. The extension areas shown are the same as long as price remains above the 2016 lows. At the time of writing it is thought the index has finished the 6th swing pullback at the March 2018 lows. It should stay above there while continuing the trend higher.

Lastly in conclusion, the extension areas higher shown on the chart is where the index should be able to reach during this period of multiple world indices bullish trends higher. Conservatively the chart shows a usual target area for a 7 swing at the 6699-7364 area which likely will be surpassed before it ends the bullish cycle up from the March 2009 lows.

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