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August, always a complicated month: Ibex, Dax and the S&P 500, under examination

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Seasonally, the summer period is usually synonymous with falls in the stock markets. There are many summers in which we have witnessed sharp falls in the markets, especially in the month of August.

Technical analysis
NO SIGNAL

It is often said that it is because investors are on vacation, although I do not agree with this statement. A posteriori, any movement in the markets can always be justified and it is true that during the summer period the volume is usually lower than during the rest of the year. But if there is something that I have clear is that small investors, those of a lifetime, we do not paint anything in the market. Real money, the one that moves the market, is another. This money is what all banks, brokers and agencies move every day. And this one never rests, or rather money never rests. It is always there, ready for whatever may come up, both up and down.

There are seasonal guidelines that generally work quite well, but they are not foolproof. Nothing is infallible in the markets. We have that if the 'rally' of Christmas, the month of market floors (October), the 'sell in may and go away', and so on. But yes, August is usually a difficult month for the markets. Now, removing the Ibex that is very touched as we well know, the rest of the Old Continent and Wall Street indices remain strong. They no longer rise with the same joy as before (momentum), but no major support has been pierced either. At the moment they are drifting laterally, consuming time rather than correcting in depth. And then there is the Ibex, which continues to behave a lot but the others, something that already comes from very far away and that will not change. The only ones that are saved are some 'utilities', with Iberdrola and Endesa at the head. And a little more. Banks are in very bad shape, led by falls in Santander and BBVA and we better not talk about Telephone. That is, the usual.

Next, we analyze the following stock indices.

IBEX 35

Our selective cannot, it has no strength. And what is worse, less and less. While we have many peso indices like the Dax and the S&P 500 near annual (and all-time) highs we we have bounced, to the tick, to the 50% adjustment / retracement of the previous fall and from there we are deflating. The banks are being the main culprit of the last corrective stretch and we already know that without them we cannot get very far. The perforation of the short-term support that we had at 7,060 points (now resistance) has done damage and if nothing remedies it, we cannot rule out a return to the annual minimums at 5,814 points. From the highs of the rebound (8,000) we are building decreasing highs and lows. And so it does not go up.

Ibex 35 weekly chart

DAX 30

Alone trades at 9% of annual and historical highs, which already says it all. The price has been moving sideways for about two months, which is not bad. As the first support area to monitor we have the weekly bullish gap of 11,586 points. A gap that was filled in at the time, but not closed. Or in other words, as long as this gap does not close, we will not have the slightest sign of weakness within the current price structure. To this day the rising lows and highs are still intact. And so it does not fall. The graph of the German index has nothing to do with that of our index.

Dax 30 weekly chart

S&P 500

The world's leading index you can set new yearly and historical highs at any time. We have them there, around the corner. So in the end, and as we have already commented on numerous occasions, it will end up leaving us a spectacular turn in 'V' as the Nasdaq already did in early June. As the first support zone, although quite far from the price at this time, we have the June lows, at 2,965 points. In the end, if there relapse towards the annual minimums, it will only be a matter of the Ibex. Far from looking heavy, I insist, we must go to the market to buy strength, not weakness. And as we already know for a decade the strength is mostly on Wall Street and within Europe on the German Dax. From what we can deduce that where you do not have to be invested is in the Ibex.

S&P 500 weekly chart

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