DE30, US 100, US500 - how far can this correction go?

DE30

A slightly deeper downward correction could have been observed on stock markets over the past few days.

German index had a problem with breaking above the 14,150 pts handle and the upward move was stopped. Looking at the daily time frame, we can see that the main sentiment remains upward. However, in case downward move deepens, the first support to watch can be found at the 13,400 pts area, where the previous price reactions as well as 23.6% Fibonacci retracement are located. Should DE30 break below it, the way towards the next support at 13,050 pts will be left open.

 

SnP 500

US100

The US tech index Nasdaq (US100) also experienced a downward correction during the last few sessions. Looking at the daily interval, we can see that the sell-off stopped at the first key support resulting from the 38.2% Fibonacci retracement and previous price reactions (12,750 pts). However, the correction is still small compared to the last upward wave, so further deepening cannot be ruled out. If the current sentiment prevails, the correction move mayextend to the zone at 12,400 pts or even 12,100 pts, where the lower limit of 1:1 structure and the 61.8% Fibonacci retracement are located.

US500

Last but not least, let’s take a look at the US500 chart. Looking at the H4 interval, one can see that head and shoulders formation (which often heralds a trend reversal) surfaced on the chart. Following a break below the neckline of aforementioned formation, the index launched a sharp downward move. Buyers regained control at the horizontal support at 3,815 pts.

The area at 3,885 pts is the key resistance to watch for now. As long as the price sits below it, further downward move is the base case scenario.