After the weekend, we can observe significantly worse moods in the stock market. While yesterday's sell-off was small, today’s decline is getting stronger. The main stock indices on the Old Continent closed the session deeply in red, actually today’s session was one-sided as sellers prevailed since the morning. Negative sentiment from the European session also affected Wall Street. Nevertheless, it should be noted that the current move is only a slight correction (at least for now), and it is far too early to talk about a trend change, but a larger correction may be just around the corner ...
When looking technically at the German DAX stock index, one can see that we are dealing with a clear pullback. If today's D1 candle closes at the current level or lower, it is possible that the sell-off will deepen later in the week as the index dropped below the upper limit of the ascending channel. In the case of such a scenario, the key support is located around 14,685 pts, which is marked with the lower limit of the 1: 1 structure.
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DE30 interval D1. Source: xStation5
As for the technical situation on Wall Street, let's take a look at the S&P500 index, which fell over 0.8% today. Looking at the D1 interval, the situation looks slightly better compared to DAX. This index has been in an uptrend for a long time and is still trading way above the upper limit of the ascending channel. Nevertheless, when looking at the market in a broad sense, it can be observed that deeper corrections occurred in the past. If the downward trend intensifies then the nearest key support is located at 4,000 pts and is marked with the lower limit of the blue 1: 1 structure. In turn, the largest correction structure is marked with 38.2% Fibonacci retracement and is located around 3800 pts. Only a break below this level will indicate a change in sentiment on the US index.
US500 interval D1. Source: xStation5
