Chart of the day: Sagging in Spain
The negative impact of the recent violent and chaotic scenes in Spain’s Catalonia region, as the Madrid government tries to block its referendum on independence, has been bearing down on the Ibex index of the 35 most liquid shares for five months. With the index peaking again at between 11,000 and 12,000 points – as it did in 1998, 2010, 2014 and 2015 – which is the 50 per cent retracement resistance from 2007’s record high at 16,000 points, the chance of a sustained break above here gets slimmer by the day. Trading down in a trend channel, all aspects of the daily Ichimoku cloud chart are bearish, and as observed volatility is close to its highest readings in a year, the price drop might accelerate this month.
Nicole Elliott is a technical analyst