Indexes and Sectors meltdown
It is often the case in the modern world of markets that momentum takes on a one way bet and there is no reason to stand in front of the truck. Yesterday saw the first sign of everyone heading for the exit at once as a sudden extension of range occurred across the board. This produced a multitude of negative signals in both Indexes and stocks sectors, and confirms that for now it is time to protect all long positions and exit the market.
Whilst a call to take action and take profits is fine, the key question is whether we are now seeing a change in trend and a bear phase. Trading Safely takes a look at the Indexes and major stocks sectors and notes which have the greatest potential to fall and where there downside targets lie. It is clear that the technical damage wrought in just one day is considerable and highlights how quickly winning and profitable positions can have there gains wiped out if not vigilant.
Our Video Technical Analysis for Indexes and Sectors
It is clear that whilst some stocks sectors have not yet built resistance based on their own momentum, unless prices recover all of the losses of this week they will do so. This will create a formidable barrier above current levels. What is also clear is what supports there are, are not strong and in many cases major supports are a considerable distance away, which allows space for values to fall. There is certainly no reason to be long stocks or Indexes in the current environment. Any bounce over the next 10 days or so will monitored closely to see if any markets fail at the newly formed resistance points and provide low risk opportunities.
Please note this is general advice from Trading Safely for all our clients and has been prepared without taking into account your personal objectives, financial situation or needs. If you do wish to consider acting on our information please contact a licensed financial advisor to discuss the appropriateness of this recommendation for your own personal financial circumstances. Please obtain any relevant product disclosure documents before deciding to invest. Trading derivatives, stocks and CFDs can lead to losses greater than your deposit.