An explosion of momentum that could also lead to a sharp retracement of the equity markets

An explosion of momentum that could also lead to a sharp retracement of the equity markets. This is the signal that the lists have generated on Friday and we must pay close attention. At the turn of the monthly setup of 17 November, a first bearish indication was formed, which was followed yesterday by further confirmation, forming a pattern that in the historical series has always been seen at the beginning of declines between 5 and 7%, if not beyond.

Let’s proceed step by step.

At the close of the trading day on November 19th we read the following prices:

Dax Future

16.170

Eurostoxx Future

4.355

Ftse Mib Future

27.204

S&P 500 Index

4.697,96.

After several weeks of non-correlation, the chart and forecast almost aligned

In red, our annual forecast for the world stock index on a weekly scale for 2021.

In blue the chart of the American markets up to November 19th.
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What are our expectations and the minimum and maximum price projections for the week of November 22nd?

It is difficult to make a reliable forecast with a risk reward in favor.

An explosion of momentum that could also lead to a sharp retracement of the equity markets

Below are the price levels to keep the pulse of the situation and with which to set up a winning trading strategy.

Dax Future

Bearish trend until we see a daily close above 16.295. Long-lasting downsides only with a weekly close of less than 15,977.

Eurostoxx Future

Bearish trend until there is a daily close above 4.399. Long lasting drops only with a weekly close below 4,252.

Ftse Mib Future

Bearish trend until we see a daily close above 27.695. Long-lasting downsides only with a weekly close of less than 26,825.

S&P 500 Index

Bullish trend until we see a daily close below 4.694. Long-lasting downsides only with a weekly close below 4,595.

Which trading position to keep?

For the Dax, Eurostoxx and Ftse Mib Future stock indices, our Trading Systems close the Long operations in progress since October 19 at the opening of November 22nd, with gains between 5 and 7%. On these lists we will remain Flat in a multidays perspective pending upward or downward developments. On the American markets (see S&P 500) the position to be held is still Long

What might Monday’s trading day look like?

Attempt to rebound at the opening and then further down until the close. The expected pattern for all equity indices analyzed should form with closing prices lower than opening.

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