On a market of fluctuations and volatilityEuropean stock markets found in the latest ECB monetary policy meeting an incentive to keep the spectra which punished the main selections of the Old Continent at the dawn of September.
The rebound of the last few sessions has indeed served to push the benchmark indices away from the levels whose loss would have led to a return to the August lows. However, it is not strong enough to throws the bells into flight.
“I maintain my position that the decline observed at the beginning of the month was too deep to be considered a simple consolidation and I fear that before we see a context of sustainable increases, we may face episodes of greater volatility and erratic price movements.which could confuse many investors, especially those who do not have a clear road map,” warns Joan Cabrero, technical analyst and strategist at eco-retailer in his weekly strategic commentary.
In this context, on an operational level, it is time to remain calm, to be patient and even reduce exposure to the stock market if it is very high.
“Don’t be afraid to have cash; it will be a valuable asset ammunition If we finally witness a new setback that leads to such important clues as the S&P500 to the lowest levels of August, around 5,000/5,100 pointsThis is, I insist, the red line that separates the current bullish context from a potentially bearish context, which would force us to take refuge in winter quarters.
The clues that would indicate a more corrective than consolidative context would be found if the indices lost the lows of last autumn in September, as 5,400 points of the S&P500THE 4,730 of the EuroStoxx 50 or the 11 138 of the Ibex 35. “If these supports are given up, do not see it as something negative, but as a future opportunity to buy again with a better risk-return equation, as would be the case at levels of 5,000/5,100 inside S&P500“, Cabrero said.
