With this being the case, I think traders are getting way ahead of themselves, but it’s clear that they don’t want to hear anything other than bullish narrative at the moment.
Stock markets are crashing again
Pullbacks at this point will probably look at the 200-Day EMA as a potential support level, so that of course will be worth paying attention to as well. With that being the case, I like the idea of buying dips, and I do think that you will eventually get that opportunity. The market looks very likely to be noisy along the way, but I also recognize that we have seen an explosive move to the upside that cannot be ignored. With that being the case, I think with the trend may have changed, at least for the short term. Whether or not he can stick is a completely different question, but it certainly looks as if they are going to try to make that happen.
If we do turn around and break down below the 200-Day EMA, it’s very likely that we have a situation where the markets will continue to drop rather significantly, perhaps down to the 50-Day EMA near the EUR13,100 level. It would take a significant beat down to make that happen, so I don’t necessarily think it’s likely, but I suppose it’s possible that we could see a complete reversal if we get negative enough news. Clearly, the nonsensical volatility continues, and I think it’s something that you cannot ignore.
With that being the case, be cautious with your position size, because you can find yourself in a deep hole rather quickly. Nonetheless, I’m very cautious about shorting this market until we break down below that 200-Day EMA at this point. Clearly, the market is in a frenzy at the moment, and this can be a vicious thing to fight if you are not cautious.
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