The market is going through a phase of stability, without major changes pending the results season. When this happens, I always remember the phrase: no news is good news (no news, good news). In these cases, the most prudent thing is to maintain confidence in the main trend, which remains bullish. This trend will not be threatened until global indices fall below September lows. In the case of the EuroStoxx 50, these levels are around 5% lower than current values, i.e. in the 4,735 points.
In the short term, there is significant support for the lows observed on October 2 in the United States: the 19,620 points from the Nasdaq 100 and 5,674 from the S&P 500. These levels are only at 2% and as long as they continue, we should not expect big changes. If these supports were broken, then we would see a more uncertain and consolidating outlook instead of a clearly bullish outlook, at least in the short term in the United States and, therefore, Europe.
On the other hand, as I noted previously, we are entering corporate earnings season, a key time to see if companies are meeting market expectations. This period usually brings a lot of volatility and sudden movementstherefore, if you prefer to avoid unnecessary surprises and dizziness, I recommend waiting before making new purchases until the indices approach the September lows.
These minimums are the “yellow line” that I have been highlighting as a reference for weeks. The “red line”, which we must not lose if we want to continue to believe in a medium-term upward trend, is still located at the lowest point in August.
Instead of getting caught up in the motions of everyday life, it is important that they remain calm and patient. Opportunities will present themselves, but you have to have the mentality of a sniper, not a shooter who shoots everything that moves. There is no need to rush, because the market is there every day. The main thing is to wait for the right moment, without haste or impulse, to make a well-calculated entry. With patience, better entry points can be found, providing greater security and long-term profitability.
