The CAC in Paris is falling on Monday, as we continue to see headlines out of the Middle East suggesting higher energy prices and weaker consumer.
CAC 40
The CAC in Paris is falling during the trading session on Monday to kick off the trading week as we continue to roll over from the recent highs near the 8,750 euros level. That being said, there are a couple of places that I'm watching below that could come into play, not the least of which would be the 8,500 euros level due to its large, round, psychologically significant number and, of course, the fact that the 50-day EMA is sitting there as well.
It's worth noting that there have been some headlines early during the session that the United States and Iran may come to some type of understanding and 60-day ceasefire, but the Iranian military has come out to basically threaten the United States with any type of action deemed as hostile, and it suggests that this isn't going to resolve itself anytime soon. Quite frankly, I don't see how somebody can think that.
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Energy Costs and Luxury Sector Pressure
Where this plays into France is that energy being more expensive is going to weigh upon demand for most things, and with this, the industrial base will certainly take a hit to their bottom line if they are paying more for energy. Furthermore, there are concerns about wealthy Middle Eastern consumers when it comes to the luxury goods sector in France, and that just took another body blow during the session.
Ultimately though, this is still a bullish trend, and I still like the idea of buying dips. I just don't necessarily think that this is a scenario where you want to jump in without some type of bounce or reactive V-shaped pattern that shows signs of bullishness.
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