The Ftse Mib is experiencing a collapse after the strong progress made up to the beginning of the week. How to read the current market situation and what are your expectations in the short term?
I must start by saying that the increase achieved by the Ftse Mib up to last Monday in my opinion was somehow the result of speculation.
It is as if Piazza Affari had wanted to try to copy other markets which in previous periods performed very well, while the Ftse Mib has always had a reduced gear on the climb.
After violating upwards the 18,000 points, the index landed at a pace of 20,500 and everything took place in a very narrow time frame.
Also for this reason I read the recent upward movement as pure speculation, with purchases fueled by the expectation for economic aid arriving from Europe.
I don’t think this could be the only stimulus to bring up the Ftse Mib so much, whose rise surprised me in all honesty.
I must admit at the same time that I did not expect a descent as strong and fast as the one we are witnessing.
I say these because the last two sessions before today, however declining, did not indicate in my opinion for the Ftse Mib a particular fear on the downside.
During Tuesday’s session the trading volumes in Piazza Affari were quite strong and similar to those seen on days when the Ftse Mib recorded greater upward volatility.
After hitting the 20,400 area, the index quickly moved away from this threshold, first closing a gap just below the 20,000 area and then closing the gap left between 2 and 3 June just above 19,000 points.
As violent as it is, the descent we are witnessing is compatible and not surprisingly after the strong leap forward scored by the Ftse Mib in a few sessions.
It will be important to see now if the index can react immediately from the current values, bones from the area of 19,000, or if on the contrary it will deepen the correction.
Needless to say, in order to be able to attend a resumption of courses, the Ftse Mib will have to record substantial exchange volumes, at least equal to that seen in last week’s sessions.
Needless to say, a downward rupture of 19,000 / 18,900 points will condemn the Ftse Mib to a further decline towards 18,300 / 18,200 points before and later towards 18,000 points.
The euro-dollar has surged to 1.14, from which it is, however, coming back. What can you tell us about this cross?
The euro-dollar is taking a breather after having made some very interesting extensions, but my idea is that it can go up again.
Looking at the future on the euro-dollar I see medium-high volumes on the daily and these should support further bullish points, net of normal retracements with what we are witnessing.
If the euro-dollar remains above 1.13, it may attempt a new attack on the 1.14 area, beyond which it will target 1.15.
Oil took the sales route after the area failed to exceed $ 40. Will the descent continue in the short term?
Oil did not definitively close the gap close to 41 dollars, but it has significantly approached.
I do not think that for now this void is being filled, as black gold has retreated even before approaching the threshold of 41 dollars.
It should be noted that in the most recent period trading volumes supported the rise in oil a little more, which occurred to a lesser extent in the last part of April.
Now it is necessary to see if these increasing volumes are of accumulation or distribution and I personally favor the second hypothesis.
Investors are already getting rid of some long positions in place and this is fueling the drop in oil, which could continue towards $ 35/34 in the short term.
New hikes will only occur with a decided overrun of $ 40 before and $ 41 thereafter, with a subsequent projection of $ 45/46.
At the moment, however, I would not bet on an evolution of this type, but rather on a descent-sideways.