The Ibex 35 takes a pause within an upward trendThe IBEX 35 remains flat, with mixed performance among the selective stocks. The most bearish companies are those negatively affected by interest rate cuts, such as banks, while construction, real estate, and utilities, which benefit from lower rates, rose today after:
Several ECB members advocate for another interest rate cut next week after having reduced them twice this year, and financial markets almost certainly expect a cut to the deposit rate to 3.5% on October 17.
The French central bank chief, François Villeroy: the cut is likely, and it will not be the last one, depending on how inflation evolves.
Economic weakness: The economy has been stagnating, the labor market is weakening, wage growth is slowing down, and inflation has fallen faster than the ECB had predicted.
Market expectations: Investors expect the ECB’s deposit rate to fall to 3% by the end of 2023 and to 2% by the end of 2025, which is considered the neutral rate, a level that neither stimulates nor slows economic growth.
Additionally, investors remain cautious due to global uncertainty and decisions from the Fed.
Investors are waiting for the minutes from the Federal Reserve (Fed) meeting to get hints about interest rate easing in the U.S. The market estimates a 98% probability of a 25 basis point cut at the next meeting.
U.S. inflation data (Thursday) and the producer price index (Friday) will be crucial.
Uncertainty in the U.S.: Recent employment data and wage inflation have raised doubts about Federal Reserve rate cuts, strengthening the dollar and increasing bond yields.
China and the Middle East: Market correction in China and geopolitical tensions in the Middle East are affecting oil price stability and adding more pressure to international markets.
However, the IBEX 35 has an upward target activated by breaking out of a lateral range up to 12,413 points, a scenario which, in my opinion, is the most likely to materialize in the medium term.
Sergio Ávila
Analista senior de IG
Ibex35largos
ridethepig | IBEX📌 Another example of the erroneous breakdown, a very similar position to DAX, CAC, FTSEMIB and STOXX. We can see how clearly the virus is leading the equity board, as Spain were the first to enter back into the second wave the prevention of a freeing breakup is being made possible via the important loss of diagonal support.
"Sell weakness, and even more when the lows are untested in an environment which can be described as very similar to the original protection. The fact that we are technically well placed when it comes to sub 7,000 we should express dramatically more weakness in Spain and play another test of its lows".
As usual thanks for keeping the feedback coming 👍 or 👎
IBEX35 between 7200 and 8300 for monthsDue to the COVID crisis, the triangulation that has emerged since 2013 has broken down. Here I show my idea from 2 years ago whose channel has been respected until today. SEE ANOTHER FORMAT FOR THE IDEA
(UNTIL NOW) Right now a new scenario is being drawn that will be supported by the almost seen lows of COVID, the 6200 (fibo 1.0) . After banning the CNMV from short positions in stocks, the index has rebounded strongly, and has left the lows far. This together with the rebound on Wall Street of the American indices has made the IBEX rebound with great force. We have reached the first resistance, the 7100. This resistance may take a couple of weeks to overcome. Once this happens, this resistance will become support. So in the short term it is better to wait a couple of weeks to buy , and in the long term it has never been a better time.
Short term (this next week is BEARISH the index and could reach 6300)
(COMING SOON) This support, the 7100 (fibo 1.61) is going to be 1 year support at least and will touch it repeatedly. In summer, very possibly when presenting results in 2020, it will be played again. The maximum, the 8300 (fibo 2.61), before summer will be touched and it will be time to undo positions.
The possible correction of the American indices will not exceed the lows already seen, I hope that the SP500 will come as close to 2,500 as possible and will not let it touch the 2400 support. A lot of new money is coming in that had not been in the stock market before and this it affects that the short positions are more reluctant to enter and more when time runs against them and Spain is less than two weeks away from ending the confinement. They have already made quite an impact having dropped the index by 45% as seen in the graph from highs.
As a future forecast, the levels prior to COVID19 will not be recovered, at most they will be 33% of the maximum this year and 15% the year you come, and in many companies not 50%, especially the Spanish banks that They will not see those levels again, I think, until at least 2022. SANTANDER will reach 3 euros per share (4 maximum) and BBVA (4 Euros per share (5.5 maximum)
FULL ANALYSIS on soon
www.diariodeuningeniero.com
IBEX 35 - THE START?Hey Guys,
Look for any buy set ups since we are looking for upside in the IBEX 35. Check my past analysis to understand the general structure. I predicted the last uptrend impulse.
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Hey Chicos,
Busquen cualquier oportunidad de compra ya que buscamos recorrido alcista en IBEX 35. Chequead mis anteriores análisis para entender la estructura general. Predije el anterior impulso alcista.
Carlos