Ibex 35 in 2010: From Inverse ETFs to 6,708 Points

Ibex 35: The Inverse ETF, 6,708 Points, and a Market in Casino Mode

July 2010. The Ibex 35 hovers around 9,000 points, the summer promises to be flat and volume-less, and the question circulating on terminals isn't whether to buy, but how to hedge. The answer gaining traction has a technical name: Inverse ETF. A product that replicates the index downwards, doesn't require daily settlements, and doesn't force financing payments for stock lending. The initial reaction to the idea is a bar joke: 'it's for poor people'.

Fifteen years after that summer, the instrument once viewed with suspicion is now commonplace in any retail portfolio. The underlying debate, however, remains intact: who wins when the market moves, and who pays the bill.

What is an Inverse ETF and How Much Does It Cost to Trade

The mechanics are simple. An ETF replicates indices, bonds, or commodities in both long and short positions; it's not a leveraged product by default—although Ultra versions exist aiming to return -200% or -300% of the index in a single session—and passes on dividends from the underlying basket. The annual cost ranges between 0.2% and 0.4%, compared to the daily financing costs of CFDs.

The fine print lies in the broker's commission. One specific intermediary charges €13 per buy or sell order: if you enter and exit, you pay twice. The main issuer back then was French, owned by a Gallic bank, and guaranteed liquidity with standing orders on thousands of products. The question remained unanswered: what happens to that money if the issuing entity goes bankrupt?

The full cost breakdown and the list of leveraged short ETFs circulating that summer, with their tickers and listing markets, are in the original material.

The Manipulation Thesis: The Index Rises to Squeeze Short Sellers

One current of thought suggests the 2010 market wasn't driven by fundamentals but by design. The S&P breaks a bearish trendline 'like butter', movements halt for no apparent reason, and European indices rise while the American one falls. The most repeated interpretation: strong hands don't want short-sellers joining and force margin calls on small investors before reversing.

Opposing them are those who distrust the theory. A daily chart might have crossed the trendline and miccionan nothing; adjusting the line to the candle extremes tells another story. 'You have to wait for the daily close,' is the advice. And the uncomfortable argument emerges: why the obsession with guessing next month instead of taking a position today?

The Treasury, IBM, and the ECRI: The Data Driving the Week

Concrete numbers matter. The Treasury was due to disburse €24 billion by the end of July and placed a syndicated issue of €6 billion with demand exceeding €14 billion, calming the most skeptical. IBM reported earnings per share of $2.61, above estimates, although its revenue fell short. And the weekly ECRI indicator dropped to -10.5% from -9.8% previously, its lowest level since May 2009.

The week theoretically started bearish and ended sideways: the Stoxx gained 0.29%, the S&P lost 0.05%, and the Ibex added 0.99%. The last Friday of the month closed with negligible gains—0.01% on the S&P, 0.07% on the European—leaving everyone with the feeling of having waited for a 'big something' that never arrived.

From Free Charts to High Frequency: Equipping the Intraday Trader

It's time for the heavy artillery. Platforms like ProRealTime or VisualChart cost over €130 per month, and some wonder if paying for them is worthwhile or if the broker's free chart suffices. The answer is as direct as it is uncomfortable: trading intraday without real-time data is like 'storming a machine-gun nest with one hand tied'. The market is a job, and a job requires tools.

The free alternative exists—demo platforms with real-time data in exchange for receiving sales calls—and indices are drawn with Fibonacci lines and retracements which, as one analyst admits, work because people believe they work.

6,708 Points: The Bearish Projection Nobody Wants to See

The most cited calculation of the summer starts from a simple figure. The Ibex 35 fell from 11,566 to 8,563 points. Projecting that wave to the 161.8% level places the bottom at 6,708 points. The number circulated half-jokingly but fit the most pessimistic scenario: a short-term rebound within a broader bearish trend.

For others, the count is medium-term bullish and even allows surpassing 12,200. Nobody has a crystal ball, and the authors of the levels themselves acknowledged they could be 'mere coincidences'. The worst enemy was never the index's direction, but the certainty of having been right.

On Monday, at 11:08 AM, the Ibex was at 9,938. Twelve minutes later, 10,001. Nearly 70 points in the blink of an eye: the entire range of a session, concentrated in two five-minute chart candles.