The markets closed last week with a sell-off, which is developing at the start of the new week’s trading. Japan’s is down over 1.3%, and Shanghai’s is down about 2%, trading at weekly lows, below the round 10,000 level.
Short-term investors and traders should be prepared for the safe-heaven bets to gain momentum in the near term as overly optimistic expectations have already been built into the prices.
The most optimistic scenario rarely materialises, forming the basis for corrective pullbacks.
Technical analysis remains on the side of the bears
By the end of last week, the ratio of fell to grown stocks in NYC was above 2 to 1, often interpreted as a near-panic sell-off. However, it is hard to talk about a 0.8% decline in indices that way. Right now, all traders’ attention should be on whether we will see another rush of buyers or whether the current bulls have done all they can do. ...read more...