The Spanish index fell right away during the trading session on Thursday, to reach down towards the same support levels that we have been paying attention to for a while. The 8900 level continues to be very important, and therefore I think you should look at pullbacks to that area as a potential short-term gift. That being said, the 50 day EMA sits just below and does offer a certain amount of support from a psychological standpoint as well.
Furthermore, the uptrend line that makes up the ascending triangle offers support also, and therefore I think it is only a matter of time before we continue to see plenty of buyers. If we can break above the €9000 level, then I believe that it is only a matter of time before we break out for a much bigger move. The measured move of the ascending triangle is four 500 points, meaning that I will be targeting 9500 on a daily break out. I would need to see the charts on the daily timeframe close above the €9000 level in order to get involved, but it is a nice and technical set up just waiting to happen.
That being said, I think that this is a market that will continue to see plenty of volatility, but keep in mind that the IBEX is in the index is that is very “risk on” when it goes higher as Spanish equities tend to be more of a retail and real estate nature. With this being the case, the market going higher will move right along with other indices around the world, as the markets around the world tend to move in the same direction.
That being said, if we were to break down below the €8800 level, then it is possible that the IBEX could drop towards the 200 day EMA, which is closer to the 8650 region. Nonetheless, this is a market that I think continues to see quite a bit of upward pressure, as there is most certainly an air of bullish behavior around the world, and I believe that the IBEX will be one of the best ways to express that feeling. The IBEX has been consolidating for a while, but it certainly looks as if we are about to start launching into a much more significant move.
