European shares drifted lower on Monday, despite bullish moves in before the market opened on the back of another set of stimulus moves from Asia. Market volatility isn’t as extreme as what the levels it has reached over the past few weeks but still remains unusually high. That said most indices are now getting starting to stabilize with markets around the world consolidating towards the tops of their bullish retracement reached last week amid a belief that the bottom may be behind us now. On the other hand, the deteriorating health situation continues to have a serious impact on investors’ exposure to risk assets. Some portfolio managers think it will take a long time for the situation to get back to normal with reversal in the trend reversal expected until a vaccine is successfully created.
The IBEX-35 from Madrid is the worst performer so far with the price trading below 6,600pts. The 34-day moving average has reversed and now plays a resistance role in a market already heading for the lower band of its short-term bullish channel. A break-out below 6,345pts could extend the current slump to 5,875pts with 5,500pts and then 5,120pts the key levels afterwards.
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