What key supports have been lost on Wall Street? Levels to be monitored at Dow Jones, S&P 500 and Nasdaq
Yes, important levels have been lost in American bags. Until now, we were accustomed to corrections that simply meant adjusting in some proportionality of Fibonacci, but only with respect to the last bullish impulse. However, the current situation is no longer the same. That is, the short -term scenario is not compromised, but has already been exceeded.
In the case of Dow Jones, there was a key level: the 41,800 points. Not only did it represent a horizontal support, but it also coincided with the 50% proportional correction of the entire increase since August 2024, which, for the moment, is the impulse to which they seem to be correcting the American indices. In addition, yesterday the 200 sessions mobile was also lost. Consequently, the now relevant level is located at 41,040 points, since, if losing it, we would have exceeded the maximum proportional correction level and it would be necessary to consider even the origin of the movement around 35,500 points. Therefore, it is a key day and it will have to be very attentive, since the break below 41,040 could occur as a result of inflation data.
The S&P 500 faces a similar situation. The difference is that it has already performed 50% setback with respect to the August impulse last year and is now directed towards 0.618. What is that level? The 5,500 points, a very important reference also for the S&P 500, with a slight support in the 5,400. However, it could descend to the origin of the movement.
As for the most punished actions, those of the Nasdaq 100. In the last days, the index reached exactly 0.618% of Fibonacci: that level corresponds to the 19,250 points in closing prices. If you lose it, we would be talking about a very real possibility that you look for the origin of the movement at 17,430 points.
On the other hand, the index that has reached the minimum of August of last year is that of Semiconductorsplacing exactly at 4,300 points, where the last upward movement began. Also, the Russell 2000 It is just in that area, trying to bounce slightly.
On the other side, if instead of continuing to fall, the market begins to recover, Fibonacci’s setbacks will have to be drawn on all this fall to determine real price objectives. However, until now, no recovery signal is observed, since of the last 20 sessions, 18 have been black candles, which would indicate that the situation could really become serious.
It should be noted that this correction is not one more. At least, as seen so far, it does not seem to be a usual correction. It could be something more significant or, on the contrary, only a scare caused mainly by Trump. However, if the situation develops in another way, many things should be reconsidered. So, we will be attentive.
The valuations of the great American technology weigh more and more; In fact, the seven magnificers have 2025 in red, with Tesla falling 39% and NVIDIA 21%. They all cut, with the exception of Meta and Netflix, which “saved by hair”. Technical analysis
The truth is that the vast majority of the magnificent 7 are following, a little more or less, the wake of the index, as expected. In fact, it is probably the other way around, that is, that they are the ones who mark the path of the index. However, what is clear is that everyone is very touched. To think that the current moment can be good to buy is a possibility and, without realizing it, we are losing a great opportunity and a tremendous opportunity cost, but, personally, I do not believe it, at least, from the technical point of view, since the trend remains strongly bassist and, for the moment, there is absolutely nothing that indicates otherwise.
If we talk about concrete companies, Tesla, for example, has a 39 and many others also have high ratios. Two weeks ago, this did not worry about us too much, but now we must take it into account. Perhaps what is happening is that the sanity begins to prevail, and we may even need to see even greater corrections. What I am clear is that it does not even think of taking buying positions, not even in those that are better positioned, such as Netflix or goal. We will join when we have some certainty that the market is changing trend. At the moment, there is no evidence of this.
For their part, European stock markets shake the fear of a commercial war and continue to bet on purchases, with the exception of the corrections of the last days. Have you suffered a large enough increase for a significant decrease in contributions to occur?
I think that, sooner or later, European stock markets will have to return to a certain normality, although there are aspects that will no longer be as before, especially fear installed in the market. Let’s think that, in just two weeks, the VIX has gone from 16 to 27-28, which is a real barbarity.
That said, Europe has not lost any relevant level, especially the Dax. I think the key level to be monitored is 22,200 points in the Dax. As long as it remains above that level, not even the short term would be compromised. In addition, let’s not forget that, despite everything, the Dax is only 3% below its historical maximums.
Now, does this mean that we can buy peacefully and enthusiasm? Personally, I would wait. Perhaps, with greater effusivity, it would consider Italian MIB, which continues to break resistances and show strength. However, I would do it with very tight Stops, because the market can turn at any time.
After all, at some point Europe will tend again to follow the wake of the United States, as has historically happened.
Analysis of the IBEX 35 and the Banking Sector
The IBEX 35 has lost small relevant levels in the short term, while the rest of European indexes, in general, have resisted better, also except for the Euro Stoxx, which has also lost supports.
As for the banking sector, there are no clear signs that tell us that we should be especially cautious. The trend remains bullish both in Spanish and European banks, maintain a very positive technical aspect. Now, what is the first level below which we could start worrying in the short term? In the European banking sector index, that key reference is located in the 177.50 points. If the price falls below that level, many precautions should be added. However, for now, I think it is not worth worrying too much. It is still the most prominent sector in Europe.
Any strategy, any asset that you see as a clear opportunity right now?
In Variable Income it would remain alert, but for the moment it would not enter. On the other hand, in fixed income, taking into account the level to which it has reached and that the European bonus is repeatedly tantling, it seems to me a good opportunity for entry. The stop-loss is very clear: below 126.60. It is true that each investor must manage their risk according to their own margin, but I would not let the loss exceed 2-3%, so the stop-loss would be quite adjusted. Worse, on the other hand, the possibility that from this level occurs a serious and important rebound is quite high, as already happened in October 2023, when from 126.50 the price shot up to 138.75. I do not want to say that it will happen exactly the same, but if the price is directed towards its old relevant support at 130.50, there we have an interesting entry option