Dom nervy
Fears of tech overvaluation and the worsening situation in Ukraine are weighing heavily on risky assets as we start the new week. From a charting perspective, there is certainly scope for more downside in the near term, as the indices have yet to reach the sort of beaten up levels where they have typically bottomed out in the course of this bull market. I do still believe that the current sell-off will give way to another significant buying opportunity. For now, though, further losses await and I would happily short the end of an intraday rally.
I had thought the DAX might bounce from Friday’s oversold levels before heading down below 9300. In the event, it has merely done the latter. It remains stubbornly oversold on its fourhourly chart, so I reckon a snapback rally could be in order. If it failed around the 21-EMA, I’d use it to go short.
DAY: I’d short a rally failing around the 21-EMA.
POSITION: Nothing for now.
FTSE 100
The FTSE 100 is looking riper for some sort of relief-rally, if only to around its fourhourly EMAs. Were it to halt around there, we could well see a decline to the 6400 region or so, where previous sell-offs have ended.
DAY: I’d sell another sharp decline back below the 13-fourhourly EMA.
POSITION: Close any remaining longs for now.
S&P 500
The S&P is very oversold on its intraday chart, but not on its daily chart. This suggests scope for an intraday rebound, followed by further downside. Going by last week’s action, a rebound could be quite impressive, perhaps taking it up to the 21-fourhourly EMA. Beyond there, 1794 beckons as a target.
DAY: Close any remaining longs for now.