There was a lot of anticipation and some fear for this day on the equity markets. Answers were expected, confirmation was sought. The European stock markets, including Piazza Affari, have set the pace today. Here are the two interpretations to explain today’s drop in stock exchanges, according to ProiezionidiBorsa experts.
The stock exchanges today took a half step back
Today the stock exchange session was considered important because it should have confirmed the good that had been done on the first day of the week. And why should he have confirmed that yesterday’s strong rise was not just due to short positions. The hope was for confirmation of a new bullish phase.
The answers that were expected and the confirmations that were sought came only in part. All equity markets today took half a step back from yesterday. European stock exchanges closed with fractional losses, around 0.5%. And the American stock market, at the time of the close of the markets of the Old Continent, was down by about 0.4%.
How to interpret this decline? We can give two interpretations. One with a more positive connotation and one with a less positive connotation (we deliberately don’t use the term negative).
The two interpretations to explain today’s decline in the stock markets
Let’s start from the positive interpretation. Today’s decline can be interpreted as a correction due to very short-term trader sales. Those who bought yesterday, today monetized the gains made yesterday. The sharp rise in prices yesterday authorizes this interpretation.
At the same time, and this is the least positive interpretation, if prices have fallen today, it is because sales have prevailed. Traders have been cautious and haven’t flooded the markets with a flood of money like yesterday. Indeed, the river of yesterday was practically dry today.
Why is this reading less positive but not negative? Because, however, the markets have contained the losses and it could be that tomorrow purchases will start raining again.
Meanwhile, today the Ftse Mib index (INDEX:FTSEMIB) closed down 0.4% to 19,078 points. The fact that prices have remained above 19 thousand is an encouraging sign. Tomorrow we start from here. It is not cheap.
Deepening
To know the multidays analysis and the point of view of the international markets of the ProiezionidiBorsa Study Office, click who.
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