IBEX Didn't Fall in September; 12,000 Points Became 10,900

The IBEX Didn't Deliver September's Crash: 12,000 Points Ended Up at 10,900

On September 30, 2014, the IBEX closed around 10,900 points. Three weeks earlier, it had dipped below 10,650, and the most vocal bears had already written off a 2,000-point drop. It didn't happen. The month began with a warning that "the crash is coming again" by month's end, and concluded with the index recovering ground and the quarter closing in positive territory.

In between, a group of retail investors trinc the situation minute by minute for four weeks. Their exchanges didn't yield a fulfilled prophecy, but rather a portrait of a gap: the one separating the narrative—September is the month of the crash—from the raw data. The question isn't whether they were right. It's what they were looking at while the index refused to break.

What Did the Market Expect for September 2014?

The thesis for the month was twofold and contradictory. One side argued the correction was technical and, once the scare passed, the IBEX would aim for 11,200 and then 12,000. "I don't understand why you're alarmed, we know for sure that by December at the latest, the IBEX will be at a minimum of 12,000," summarized one of the most confident. The other side saw strong hands selling and anticipated a decline to the 10,500 area before any push for highs.

Both theses had a timing problem. The end-of-month collapse didn't arrive with the promised intensity, but neither did the rally. What occurred was a sideways market, with volatility and irregular volume, leaving both sides in limbo. The macroeconomic data that did appear—the September Manufacturing PMI at 52.6, above the expected 52.2—pointed more towards modest expansion than a cataclysm.

The Game of Technical Levels

The community's real language was levels. Specific figures were published daily: the Dow support at 17,000-17,010, IBEX pivots at 10,676, 10,734, 10,788, 10,840, and 10,908, and a near-quarter-end floor around 10,650 after buying volume at lows. The precision with which touches were cited served as a thermometer for their own methods.

No one disputed that the levels were useful. The argument was over who had nailed them. "Today is one of those days when I feel especially proud of my levels system. It hit every single one of them, using the given high and low as resistance and support to the tick," wrote one of the most trinc analysts, who kept his own daily log. The skepticism of others was reasonable: a level that coincides with the session's high and low ceases to be a prediction and becomes a description of what already peine.

Specific Bets: Bankia, BME, Repsol, and Tubacex

Beneath the index debate, individual stocks were being traded. Bankia raised suspicions: "Strong hands selling all of July and August. It's not breaking 1.550 and looks set to go to the 1.36 area," noted a participant, who later saw the channel at 1.29. BME was also out of favor, with monitored support around 29 euros. Repsol held up due to the dividend, with the resignation of those buying "for the grandkids."

Tubacex, Arcelor, and the basic resources sector drew attention. The European industrial metals index reached resistance and immediately reversed. In commodities, the warning was stark: "Today Brent is at $99, coal if Brent doesn't rise above $120, the only thing I see is shorting coal." The oil price collapse was beginning to be an uncomfortable backdrop for any stock market optimism.

Intraday Trading, Called Live

Another part of the conversation was pure short-termism. Entries and exits announced by the minute: longs on the DAX with a 50-pip stop, longs on the IBEX at 10,790 closed at 10,840, an attempt with gold at 1,207, shorts on Santander with a stop at 7.4. On October 1st, the first day of the month, half a dozen trades were executed in less than two hours. "Woohoo! A 3% surge today," celebrated one; "I'm the best, 100% accuracy," added another, half joking, half serious.

The problem with that pace was traceability. Almost no one showed the net result, and those who lost recounted it with a delay. The uncomfortable question—does anyone ever lose money?—hovered over the thread without a clear answer.

Bestinver and the €1 Billion Outflow

At the end of September, the conversation shifted to funds. The capital outflow from Bestinver became the week's main story. "According to Unience, over €1 billion left Bestinver, and they only had €500 million in portfolio," noted a participant, while another clarified that "€600 million left in just two days." The stampede of investors coincided with a letter sent to clients justifying worse relative performance compared to indices.

The firm, after the departure of its long-time manager, accumulated daily purchases in Acciona—"40k more shares today," with the rest of the portfolio in sales—while returning money to those who requested it. The paradox was summarized by another: unwinding positions to pay redemptions without the net asset value collapsing. Distrust towards the management company was condensed in a repeated phrase: "They've lost their way, that letter is out of place."

FCC and the Standoff Between Koplowitz and the Banks

In the corporate arena, FCC faced decisive hours. The company was undergoing a capital increase with its creditors in a tense situation. As reported, Esther Koplowitz had reached a preliminary agreement with the banks, while the Martínez Zabala group announced it would take a 2.5% stake and sell it within 24 hours. CaixaBank, however, assured the chairwoman that it would wait to avoid harming the capital increase.

The power struggle was interpreted in terms of control: how much of FCC's capital Koplowitz would retain after the operation and how much margin she would have over the subscription rights for the 5% that would go to new entrants. The corporate battle served as a thermometer of Spain's 2014 financial stress.

The Underlying Debate: Low Rates and Sustained Stock Markets

The overarching macroeconomic reflection was simple: with rates at historic lows, it was difficult for stock markets to collapse. "As long as rates remain this low, stock markets won't fall," argued one participant, who nevertheless anticipated sharp declines later, when rates had to rise due to economic improvement. Another pointed to the German bond attempting to break all known lows: with central banks in that dynamic, "nothing is too stupid to be tried."

In currencies, the euro-dollar moved smoothly, with bets to exit dollars in the 1.20-1.23 range. The underlying antiestéticar involved two electoral events: Scotland and, later, Catalonia. A question hung in the air: what would happen to a Spanish bank fund with a Luxembourg ISIN if the euro broke up? The ironic answer was that if the experts said so, nothing would happen.

The Collapse of the Channel Itself

What did break was the community. Over the past few weeks, the tone had degraded to insults. Accusations of operating with multiple accounts, veterans announcing their departure, moderation criticized for inaction. "In recent posts, I've been talking to myself and my multis," admitted one of the defenders of the levels method, in the midst of a dispute with those accusing him of self-promotion.

The underlying complaint was the disruption of the dynamic that made the tracking useful. "There was a time when several forum members frequented it daily, with different, but very interesting, stock trading methods. People who didn't just talk, but called out trades live," recalled a veteran upon leaving. On October 1, 2014, with the IBEX at quarterly highs and no crash to lament, the conversation formally closed and a new one began.

The detail is perplexing: those who had been announcing the crash for months were left without it. Those who promised 12,000 also failed. The index closed September where almost no one had placed it: exactly between their two prophecies.

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Note: This article analyzes a public conversation among investors from 2014. It does not constitute investment advice.