Bears Over Europe: Take 2

In our first post where we mentioned that worrying signals were seen across major European markets, markets had completed their first downward movements and were pulling back up correctively. We mentioned that although the US markets were not showing such worrying signals, it was inevitable that one would be influenced by the other. It was more probable that US markets would correct together with the European ones because their rally had extended too far without a correction. European indices moved towards their 61,8% retracements. Not all of them did, just the major ones. This upward movement fooled a lot of people, into believing that the trend was again towards the upside, but only here you were alerted before hand for the impeding correction in Europe and US. So lets take a look at the updated european charts.

IBEX:

IBEX is already trading below the Ichimoku cloud and confirms our view that this market is downward biased. Now at 8030 spot price testing support. Could pause here before another leg down.

Eurostoxx50:

EUSTOXX has the similar behaviour as IBEX. It pulled back up towards the 50% retracement and now below 2600 breaking the lows, showing weakness and further downward potential.

DAX:

DAX made another try upwards to break past the 61,8% retracement but came back down strong. Weakness is evident here too as we expected after the initial 5 wave down movement. The index is now testing the 7600-7550 support that if broken, the road towards 7200 will be open. We favor the bearish scenario as long as prices trade below the recent 7785 high.

S&P:

Members have been updated about the impeding correction that was imminent for S&P. The rise was complete and prices were expected to be influenced by the weakness across Europe. The collapse in Gold and Silver was another sign that usually comes before a decline in US markets.

S&P making a start for a correction that could test 1490-70 area. Bulls were alerted many times before that any sign of weakness should be taken seriously as the chances for a big correction have increased.

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