On Tuesday, the U.S. indices markets finished slightly higher, but the DAX and EuroStoxx50 never gave up their significant gains. We are seeing a follow through higher in Europe dragging the US indices higher overnight. These Five-Day Island Bottoms in the DAX and EuroStoxx50 are indicating much higher prices. Island formations are the most powerful indicator in technical analysis. The Five-Day Island Bottom objectives are EuroStoxx50 @ 3089 and the DAX @ 10374.5.

Five-Day Island Bottom Revisited - E50

Five Day Island Bottom Revisited - DAXHere are the three-day totals (Monday-Wednesday). It is quite obvious Europe is leading the U.S. indices higher.

1. DAX +510 points (+5.31%)

2. E50 +152 points (+5.37%)

3. ESU +33 handles (+1.60%)

4. YMU +195 (+1.11%)

5. NQU +49 (+1.12%)

In conclusion and this is my opinion only; it was the European bourses which led the U.S. indexes lower in the beginning of June. It now appears the European bourses are leading and will lead the U.S. indexes higher to finish off the month. There are so many bears and shorts on both sides of the Atlantic Ocean, I see a hell of a summer rally to come across all world bourses. There are just too many bears around for my liking.

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Tony LaPorta

Tony LaPorta Futures Maven

Tony LaPorta has been active in the futures industry for over 36 years including membership at the Chicago Mercantile Exchange (CME) and the London International Financial Futures Exchange (LIFFE). Tony is an ex pit-trader turned screen-trader.

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