The increases that have been made in recent hours by bullfight in Europe, they have in no way served to mask a week -last- in which sales have clearly predominated on the main stock exchanges of the planet, and which have caused some of the selective reference indices in Europe, such as the EuroStoxx 50, they will end up falling below the first support levels they have faced, such as 4,790 pointscorresponding to a 38.20% Fibonacci retracement of the entire last rebound recorded since early August. This decision should in fact be interpreted as a sign of weakness.
This is what Joan Cabrero understands, who assures that his drillings suggest that “the consolidation could be broader and more complexpossibly with two descending waves or a zigzag pattern (fall – bounce – fall) before finding a bottom and resuming gains.”
“I fear that a potential rebound is vulnerable and part of this zigzag that could take us to levels where I would consider it appropriate to buy. These levels coincide with a 61.80% or 66% decline in the rebound, which would put the EuroStoxx 50 in the 4,650/4,670 points and the Nasdaq 100 at 18,285/18,390 points,” explains the expert.
Precisely, this consolidating/corrective context invites us to think more about the levels at which declines could be observed, than anything else. And in this sense, it is in the United States, the leading market, that we must look for the great reference that can support the reference selections throughout the planet.
“If you ask me what level would have to be lost to cancel the short/medium term uptrend and justify a reduction in exposure to the stock market, I would tell you that the key support is in the 5,100 points of the S&P 500. This critical support is currently 7% distance and in the opinion of the Ecotrader strategist, its transfer would invite a reduction in exposure to the stock market to move towards the winter quarters.
The 11,000 ibex
In the case of the Ibex 35, the first major support is located in the 11,000 pointscorresponding to an adjustment of 38.20% of the increase that the Spanish selective has been the protagonist since August 5, the day it reached its lowest level in recent months due to the stock market crash triggered in Japan after the publication of employment data in the United States.
“Without having reached it, I hesitate to believe in a possible rebound,” says the analyst while emphasizing that losing the 11,000 pointsThe information that the Spanish market would give us is that the consolidation could be broader and deeper, being able to respond to the 10,690-10,740 points.
And this behavior confirms, technically speaking, that the Ibex 35 has reached a ceiling in the 11,436 points and from this environment a correction phase could have begun.
