Ibex 35 Plummets Below 7,000 After Testing 8,800

The Ibex 35 Slides Below 7,000 After Testing 8,800

The Spanish Ibex 35 challenges the 8,800-point resistance on a holiday, with the key question being whether it will hold at the close. It approaches the test with ArcelorMittal and Técnicas Reunías rising strongly, while Repsol takes a break. At 14:30, Mario Draghi speaks, and the market prices in a six-month extension of the ECB's asset purchase program: if not confirmed, we may see declines, warns one participant.

This is the starting point of a discussion that extends over years and ends far away, with the benchmark index below 7,000 points and some participants counting losses. In between, resistances that resist, a capital increase, peine shorts, and a cobi19 that some took for a bluff.

Why the Ibex 35 Doesn't Break 9,175 Points?

The figure becomes an obsession. It is three consecutive sessions trying to surpass 9,175, and during the previous year, the zone appeared several times as a ceiling. Above, they look to 9,200-9,300; below, the floor is between 8,500 and 8,600. As long as it doesn't break in one direction, the most repeated diagnosis is that there is nothing to be done.

Bets are divided. Some expect another correction from resistance; others believe it will break above and that from there the margin opens up to 9,800 or even 10,450. Among the more concrete, some project a one-month rise to 9,900 before consolidating at 9,200. The index then gives them part of the reason: it surpasses 8,800, then 9,200, and continues.

The Battle of 10,300

Past the border, the terrain shifts to the 10,200-10,300 zone. Above are 10,600 and then 11,000; below, 10,000 and 9,600. A close at 10,245 leaves futures in line. The sideways movement at 9,400 leaves wounds: those who held it for weeks exited just before the index climbed to 10,000.

Confusion prevails. Asia in red, Europe in red, America in red. And the Ibex 35, in green. This is beyond understanding, summarizes the general mood when the index surpasses 10,400 and, days later, closes another red day at 10,444. Again, 10,400 as support and 10,600 as resistance.

Santander, Capital Increase, and Shorts

Santander's capital increase moves the board: it is fixed at 4.85 euros plus rights. For those who are short, according to their own account, the operation plays in their favor. The season leaves headlines of all kinds: large values very strong, with Telefónica pulling the cart after months of laziness, and a scenario of shorts being peine while the stock market continues to rise.

Some argue that the movements respond to a logic of plunder: those who do not manage the market are afraid to buy, and those who do know it and buy. Others warn that betting on futures on the Ibex 35 or on shares is a more slippery terrain than it seems: you can get the direction right and be completely wrong about the timing.

The Crash: From 10,400 to 7,000

The blow arrives. The Ibex 35 slips to 7,200 and then below 7,000, with sessions of more than 2% and even close to a 3% drop. BBVA takes one of the loudest hits. One of the most commented exits is that of those who sold 60% of their portfolio taking advantage of a rebound, after entering convinced that the cobi19 was a bluff and previous declines were an opportunity.

Antiestéticar spreads. A prediction places the Ibex 35 at 6,500 the next day. Another reading believes the next good rise will come when the political landscape clears and budgets pass, with public works and unemployment data sustained until the end of the summer season as arguments not to expect large declines until October.

Is the Ibex 35 Expensive?

The question hovers over the entire discussion. The most cited diagnosis is that the index had risen since January and is correcting, that there are few cheap companies and none that is both cheap and bullish. The correction, when it ends, will be a buying opportunity with the target at the price before the adjustment.

Not everyone comes out well. Gold miners have a hard time, and there are positions on the verge of hitting a -15% stop, a reminder of what it costs to not manage the entry point well. On the other extreme, those who moved in time boast of a portfolio up +30% and rising. Family deposits mark a record in April and rise by 6.5%, with money parked far from risk.

There is a more curious than financial episode: 500-euro bills that clogged the toilets of a Swiss café and two restaurants. More than 95,000 euros found after their owners tried to get rid of the cash. Workers can keep the money when prosecutors close the case.

With the Ibex 35 around 7,000 and American futures sending signals, the question remains unanswered. Nobody knows if the floor is made or if there is another stretch of decline. The only certainty is that that 8,800 resistance, which was attacked on a holiday, is now far above.