Ibex Falls in May 2013 as Shorts Take Charge

May 2013: Ibex Dips and Shorts Take the Helm

On the last Friday of May 2013, with the spot market already closed, S&P 500 futures broke the 1,648 support level "like butter." They had bounced there twice. On the third attempt, it gave way, and in the same session, 1,635 and 1,630 also fell, with the next stop at 1,622-1,624. The Ibex 35, which had flirted with 8,500 throughout the month, closed around 8,200. Longs watched the clock. Shorts, finally, were smiling.

May hadn't started this way. It began with football —Real Madrid's exit from Europe— jokes about who peine the month, and a feeling inherited from April that the Spanish stock market was experiencing a suspicious calm. The risk premium was falling, banks "weren't doing so badly anymore," and no one had spoken of a bailout in weeks. Precisely because of this, half the room was suspicious: when the narrative becomes comfortable, something is brewing.

The Month That Began with Football and Good News

The prevailing diagnosis at the start of May was contained euphoria. The Ibex had been rising for months from 6,000, with a rebound from that low and a subsequent sideways phase. Banks were trading better, and those looking at the index's chart saw the usual: a narrowing sideways range until someone decided to break it. However, valuations for the month were mixed. Against the idea that good news was already priced in, some argued the exact opposite: that "good market comments" often coincide with tops, not beginnings.

The first part of the May 6 session served as a thermometer. There was talk of Apple and its loss of advantage —"it's not releasing groundbreaking gadgets and the business is becoming commoditized"—, of S&P levels at 510, and of small-cap stocks moving in minutes. Meanwhile, in Spain, telcos and utilities were creating the noise.

The Levels Everyone Was Watching: 8,350, 8,500, and the S&P's 1,660

Technical analysis dominated the conversation. Two zones appeared repeatedly: the S&P 500 and its 1,660 points, and the Ibex with its 8,350 wall. The reading was simple. Above 8,350, the index had a clear path back to its highs. Below, a corridor peine towards 8,200 and, if things got "interesting," down to 8,120.

Throughout mid-May, contradictory signals accumulated. Buy baskets seemed to fill around 8,300, and those looking at volume saw institutional movement. Until May 20, however, an 18-point drop with -800 contracts was interpreted as "low traction": a shakeout, not a trend change. The dilemma remained. Either new highs, or a bullish failure and a slide to 8,120. Neither option was decided then.

How Stock Market Losses Are Taxed: The Calculator and the Tax Agency

With the market tense, a significant part of the month was spent on a less visible but more useful discussion: how to handle losses when filing taxes. The circulating summary indicated that short-term losses could be offset up to 10% of the general taxable base, and the remaining negative balance could be carried forward to the next four tax years.

Here, the real discontent emerged. Those who had losses in 2012 and gains in 2013 found that they weren't always offset, and the repeated conclusion was the same: the taxation of investment in Spain always works against the small investor. One participant calculated that it was more profitable for him to close his broker account than to keep his mortgage. The irony was not lost.

The Trader to Trinc in Reverse

There was a character throughout the month, mentioned dozens of times for his incredible bad timing. Every time he peine short positions, the market went up. Every time he went long, it plummeted. The recurring joke was that there was a perfect inverse correlation: you just had to do the opposite of what he said to be right. Some even joked that his account was a paper one and he'd been given a fake "margin call."

The scene well summarized the month. When a market moves on nerves, the most reliable signal is often the opposite of the majority. The euphoria of early May and the panic of the 31st are two sides of the same coin.

Santander, Solar Stocks, and Penny Stocks: The Securities Map

In detail, everyone defended their own. Santander was the banking thermometer: those who sold at 5.64 and bought back at 5.38 boasted of a round alucinación, with the stock coming from 5.10. US solar stocks —Yingli, Renesola, SunPower— appeared as high-voltage bets, with clear resistance levels and the warning that they could correct 15% without ceasing to be bullish. Tubacex and Tubos Reunidos, both with market caps below 300 million, were compared by net debt: around 260 million for the former, about 170 million for the latter.

Prisa deserved a separate chapter. With 670 million shares in the market, it became known that Morgan Stanley had sold 1.4 million shares and Credit Suisse 0.7 million, while others entered "like champions." For some, it was a sign that something was brewing; for others, noise from a beaten-down stock. And at the opposite extreme, small penny stocks provided occasional joy: Natra and Natraceutical rose as much as 7% and 20% respectively in a single session.

Paper Trading vs. Real Money: The Account That Doesn't Add Up

One of the underlying themes of the month was how much one deceives oneself when trading simulated accounts. With fake money, one buys luxury cars; with real money, one loses their shirt. The circulating explanation was blunt: the market is not a hobby, it's a business, and treating it like a weekend bet is a fast track to disaster. Some brokers prefer investors to see it as a game.

The debate shifted to personal management: someone who had lost 40% of a 45,000 euro portfolio in six months recounted that their biggest success was not insisting on recovering it. The lesson, repeated in different words, was always the same: cutting losses in time is the only victory you control.

The Collapse on May 31

The month's close laid the cards on the table. S&P futures first shook 1,648, withstood two rebounds, and finally fell "like butter." 1,635 was lost just as easily. The trinc Monday, a rebound was expected, but it never materialized.

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And so May bid farewell: with the Ibex around 8,200, the 7,550 target for shorts still far off, and 46,000 visits accumulated in a single conversation in just one week. What was disconcerting wasn't the fall. It was realizing that, among so many predictions, the one who was right was almost always by chance.