IBEX 35 – FREE FALL!
Today we look at the Spanish Stock Market
index, which is the IBEX 35. After the FOMC release of yesterday and the ECB’s
uncertainty in economy growth, this index has continued its plunged.
But apparently, it’s been going on for a while.
Until this year, we had always thought that the IBEX replicates the movements
of the Dow Jones and the S&P. Well, it doesn’t. The Dow went above 13.000
and the S&P above 1.400 and the IBEX has been trading in the opposite
direction.
Let’s take a look at the Elliott Wave counts.
We’re right now in a downward trend, probably riding wave 5. At this drop
speed, the IBEX doesn’t look like it could hold and bounce at its current best
support level, which is 7.500. We believe that if it holds there, it’s just a
brief pause and will resume its downtrend to 7.250 – 7.100.
Right now, Spain is going through a very
difficult moment and all the measures taken by the new Government are not
inspiring any confidence in foreign markets.
It’s just a matter of time until Spain bounces
back. From all the Latin economies, it is still a safe one and although the
picture looks ugly now, we’ll watch it closely for future trading
opportunities.
Trade safely. Trade with discipline.
