With this post we will examine several stock markets together.
As is known, from around mid-February to mid-March the price lists were hit by a violent wave of sales which led to the following percentage drops (calculated from Maximum to Minimum):
FTSE MIB = -44.45%
DAX = -40.16%
EUROSTOXX = -40.45%
S&P 500 = -35.41%
From a first analysis of the numbers, a greater weakness of our index and a greater relative strength of the American stock exchange emerge, even though the latter started from a huge overvaluation.
In any case, all the lists have been overwhelmed by sales.
Since mid-March, after reaching significant areas of support (and in some cases even overstretched), a rebound has started.
Rebound justified for several reasons:
a temporary recovery after a similar wave of sales is almost physiological;
hope in interventions by the various institutions;
willingness of the funds to beautify the quarterly reports;
rebalancing of benchmark funds: for example, any balanced 50% equity and 50% bond fund found itself a significantly lower equity component and had to raise it to comply with the mandate.
Although this percentage rebound has been significant, at the moment only the American list has managed to reach (temporarily) the Fibonacci retracement of 38.2% of the entire descent.
Here are the maximums recorded so far thanks to the rebounds and, in brackets, the respective Fibonacci retracement levels of 38.2%:
FTSE MIB = 17.830 (18.481)
DAX = 10.137 (10.371)
EUROSTOXX = 2,847 (2,900)
S&P 500 = 2,641 (2,650)
In the meantime, all the price lists have fallen after reaching these prices.
It is difficult to establish from now on whether or not the rebound has already run out: the only aspect I would like to reiterate is that the underlying trend is bearish.
In this regard, I find it interesting to highlight the intersections of death that have appeared in all the price lists
FTSE MIB
DAX
EUROSTOXX 50
S&P 500
The crossing of death signals as probable:
falling = acceleration of the same;
bouncing = a new bearish leg.
In essence, the hypothesis of new lows once the rebound in progress is concluded (if not already exhausted) remains probable (albeit not certain).
