Market technicians watch technical levels very closely, as breaking certain support levels would mean algorithmic programs kick in. And that could lead to a much quicker slide, as they now represent substantial part of the market trading platform.
However, another interesting phenomenon in today’s markets is that the risk barometers or spreads have tightened. Which to us indicates that there is no panic selling just yet. We also think that at current levels, the pullback can hardly be called dramatic.
The DIJA is now closer to it 200 day average. The markets in Asia are going to mirror this and we should see the effect in our market too. Brace for the fall, 5950 is the line of first resistance, we may even see 5850 levels....but then our market surprises us all or as the old saying goes that the markets make fools of the maximum number of people.