Chinese are scaring again and 7% decrease couldn’t be neutral for the rest of the traders in the world. All most important stocks lost on Thursday. In the US: NASDAQ -3,00%, S&P500 -2,37%, in Europe: FTSE100 -1,96%, CAC40 -1,72%, DAX -2,29%. Oil was getting cheaper again and EURUSD was strengthening. All 30 DAX companies lost yesterday, the most Daimler -3,85%, BMW -3,76%, Volkswagen -3,28%.
Now we have to ask important question: is it the end of gains on stocks? If we would make decisions just by reading titles on CNBC, we should see the apocalypse: “25% More Decreases Ahead”, “It’s 2008 Again”, “Indices Are Losing And It’s Not China’s Fault” etc. We need to notice that rates hike just started and there is a lot of chance that Yellen will not rush it and American economy is good.
Technically looking I already pointed two possible scenarios. Bullish, where we are in bearish wave 2 after which will come big bullish one. Bearish, according to it we are in big C wave already which should end in 2014 low area. Considering that wave 2 often retrace 78.6% of the first one we still have almost 200 pts of space to decrease on DAX future (9,750 pts). The real signal would be breaking 2015 low.
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Tomorrow we should expect high volatility in the afternoon after US job reports. Payrolls are always causing volatility, also on stocks. The closest supports for today: 9,830 pts, 9,750 pts, 9,700 pts.
