The ‘German locomotive’, the hope of some bulls cornered by the banks in the Ibex 35

The short-term confirmation this week by the European banking sector (SX7R) of a bearish pattern that threatens additional falls of 4% in banking, has exponentially increased the Ibex 35’s chances of returning to the lows zone. 11,130 pointswhich are the minimums for September.

“Through this environment of 11,130 points, which are the lows of last September, the bullish trend that has been guiding the increases from the lows of 2022 runs,” explains Joan Cabrero, technical analyst and strategist at ecotrader.

However, the hope that the bulls maintain in the national selective at this time is outside our borders. The main European stock markets remain on their key supports, such as 10,900 of the EuroStoxx 50 in its Total Return version (not to be confused with Net Return), the 18,900 German DAX 40 points or in the EuroStoxx 50 in its traditional version, the 4,600 points.

“At the moment the German DAX 40 is 2.50% away from its key support, which is what it should lose for the german locomotive derail and lose its strength”, something that still supports those who do not lose bullish hope in the short term.

The other bullish ‘support’: Wall Street on supports

On the other side of the Atlantic, the North American market is debating in the short term between continuing its impeccable upward trend or, on the contrary, developing a broader consolidation phase which could ruin the classic Christmas Rally that is usually so common on these dates. “The possibility of seeing that Christmas Rally will remain alive as long as the Wall Street indices do not close the gap they opened upwards after Trump’s electoral victory (from now on I will call it the Trump gap)”, explains Cabrero.

For that gap to close, the Nasdaq 100 would have to lose the 20,000/20,227 and the S&P 500 will lose 5,700/5,782 points. “The risk of seeing the loss of this support would be reduced if the Nasdaq 100 closes the gap of the ‘Bear Island’ that opened last week from 20,900 points, for which it would have to overcome resistances of 21,070 points“says the expert who indicates that in that case a scenario of bullish continuity in this final stretch of the year would be more likely.

In this sense, heThe Biden administration is weighing additional restrictions on sales of semiconductor equipment and artificial intelligence memory chips to China that would intensify the US crackdown on Beijing’s technology ambitions, but would fall short of some stricter measures previously considered, according to reports from China. Bloombergsomething that would be encouraging the markets in the last hours.

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