CAC 40 Dives On Open

The CAC 40 has opened down -9.99% on the day, as world equities markets move lower on news that the UK has voted for a “Brexit” in yesterday’s EU referendum. Of the 40 listed components, 39 are trading lower at the open. Societe General is leading the decline, and is trading down -21.3% on the open. As today’s dramatic move plays out, traders are left looking for key technical value to determine if the CAC 40 can find support before this week’s trading closes.

CAC 40 , 30 Minute Chart with Classic Pivots

Market technicians should note, there are multiple points to watch this Friday due to the markets extreme open. Currently, price action is rising off of today’s low at 3,925.50. So far the Index has rebounded through the psychological 4,000 value and today’s S4 pivot at 4,024.47. As the market retraces, traders should monitor the S3 pivot at 4,168.47. This value is currently acting as resistance for the CAC 40, and a move through this point opens the Index up for a broader reversal. Alternatively, if prices stay under this point, traders may look for a potential resumption of today’s downtrend.

Sentiment for the CAC 40 (Ticker: FRA40) has flipped positive this morning, with SSI (speculative sentiment index) now reading at an extreme +3.79. This change is significant as now 79% of positioning is long the market. In the event that the CAC 40 declines further, traders should look for SSI to remain at a positive extreme. Alternatively in the event of a bullish reversal, SSI should neutralize and move away from its current extreme value.