DJ EuroStoxx50 Futures Volatility Forecast (20/02/2011)

The 3,050 points target, we gave you last week, has been reached and surpassed since the market closed at 3,070. HyperVolatility was right once again and we all hope you took advantage of our forecasts in order to increase your portfolio returns.

The current volatility is around 0.7% (11.1%in annual terms) whilst the equilibrium point is almost 0.8% (12.6% annualised). However, the recent and violent augment of price, which made the volatility to collapse, seems to be running out of steam.

The TGARCH plot is neither upward nor downward sloping but it displays a pretty calm situation which could favour a slow surge of DJ EuroStoxx50 futures which could potentially touch 3,075 – 3,080 points by the end of the next week.

The staff of HyperVolatility is again moderately bullish on this market and will place some longs but the more the DJ EuroStoxx50 goes up the higher the likelihood of a retracement. We believe that the current up movement is extremely close to an end and therefore we will keep going long but with a quite strict stop loss. It is worth remembering that the US macro news released on Thursday and Friday can change the scenario in a few hours. Be careful!!!

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