S&P what now?
February 26, 2013
A bullish view on S&P
February 28, 2013

Our bearish signals are proving correct as days pass by. Despite early optimism regarding the Italian elections, the inability to form a government has brought fear and uncertainty back to Europe. All major indices, despite the Monday morning rally, have pulled back and today are testing or moving past their recent lows. Our view was that the pattern of the initial declines that started late January, was to be followed by an upward correction and then another violent downward move. Some indices managed to make marginally higher highs late February, but at the same day prices snapped back down after the disappointing election results.

Lets take a look at those important indices.

DAX:

DAX is currently testing the support zone we show in the chart below. Although it reached close to the January highs, it pulled back down violently. A break below 7560 could accelerate the decline.

dax

IBEX:

IBEX reached the 61,8% retracement as expected by our analysis for the end of the upward correction and now trades just above the support zone at 8000-7950. Breaking below this level will accelerate the fall.

ibex

MIB:

The Italian index has broken the lows and is expected to fall even further.

mib

CAC:

The French index has very ugly daily candlesticks. It has tested January highs and sharply fell back down. A break below 3600 will accelerate selling pressures.

 cac

For more help trading these indices don’t hesitate to contact me. As always, thank you for taking the time to catch up on my thinking and trade safely.

Alexandros Yfantis
Alexandros Yfantis
Fascinated by financial markets, studied International Securities Investment and Banking in the UK, works as a Portfolio Manager in Greece and runs a technical analysis website. Enjoys travelling and spending time with his family and preparing for the black belt in Korean Karate.