Let me apologize if I seem too cautious, but in the stock market, the graveyard is full of courageous men. Since my beginnings as a day trader, then as a manager, advisor and strategist, I have always been clear that in the world of investments, the goal is to last, not to dazzle. Especially when we talk about savings accumulated at the cost of so much effort.
That said, even though we have recently seen increases in the major global indices, which have led the Ibex 35 and the S&P 500 to reach new annual highs, I consider it premature to exclude possible episodes of greater volatility.
These swings could cause further declines, although not necessarily dangerous ones, as long as they do not extend below the September 6 lows. To give you an idea, here are some key levels I suggest watching: 18,400 points of the Nasdaq 100 and the 18,200 points of the German DAX 40, which currently constitute important supports.
As long as these supports persist, I don’t think there is any reason to be alarmed or reduce equity exposure. However, For new purchases, I suggest waiting for a decline that brings the indices closer to those September lows. This level would function as a stop aggressive for open operations in recent weeks.
On the other hand, I would feel much more confident in recommending buys after a decline if the Nasdaq 100 first overcomes the 20,000 resistance and the EuroStoxx 50 breaks the price resistance triple barrier. 4,985 to 5,000 points. If these resistances are broken, the risk of a future decline to the September lows would decrease significantly.
In summary: the yellow line that we should watch is at the September lows. If prices break above this level, we could be facing a consolidation evolving into a correction. On the other hand, the red linewhich must not be lost under any circumstances if we want to maintain a bullish scenario in the coming months, continues to be at its August lows.
