The price of the stock markets has fallen today as risk rose on fresh recession fears. Could this offer short trading opportunities?
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Stock Market Analysis
The stock markets have fallen on the first day of the week as news circles of fresh recession fears. A slowdown in growth is predicted in Europe and the UK and this combined with a potential energy crisis in Europe creates fear in the market. This fear could fuel the stock markets to decline further this week offering potential short trading opportunities.
Looking at the charts we have the German Dax on the left hand side and the S&P500 on the right hand side. Even though the news of today has focused more towards European equities the correlation has seen the US stock market fall too. The bearish trend that is forming on the 4hr time frame on both charts suggest we can look for short trading opportunities on pullbacks. The recent pullbacks on these markets have been shallow and low ranging, this is what we could expect to form again before looking for downside.
Alternatively, we could identify bigger levels on the volume profile to see if sellers re-enter the markets in these areas.
Did you see our Week Ahead analysis? You can see it here.
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