European indices have reached their support levels near the pitchfork supports as shown in the charts and move upwards. Yesterdays S&P 20 point upward move was another reason europe looks ready for an upward bounce. The form of the rise will determine the nature of the recent bottom.
DAX middle pitchfork resistance at 6400-6450 may put a stop to the rise. Any close above those levels can push the index to 6600.
CAC has a more bearish chart from DAX with a larger percentage decline relative to the September-April rise(61% retracement).
Eurostoxx is even worse. The retracement is reaching 76% from the entire rise from September to April. The most worrying detail I see in CAC and Eurostoxx charts is the corrective form of this entire rise. I cannot see an impulsive move as overlapping waves dominate the chart.
MIB on the other hand is below the September lows. Still inside the downward channel, MIB reminds me of the Greek General Index a couple of years ago.
Concluding I can say that the weakness in countries smaller than Germany and France has a negative impact in their economies. If things don't get fixed or a more viable program is introduced for these economies to exit recession, things are going to get uglier than in 2008-09. Of course the european debt crisis will surely affect negatively the already fragile US recovering economy. Closing with a positive note, if politicians manage to work out all the problems and obstacles the solution to the european debt crisis could lead markets to new historical highs.
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