The index of the New York Stock Exchange is trying to stabilize at the beginning of this week around key level of 12,800 points as investors are facing continuing economic uncertainties. Indeed, concerns about the fiscal cliff in the United States and the deteriorating situation in Greece continues weigh on investor sentiment in the absence of major economic data.
In the U.S., the specter of a severe fiscal crisis is worrying financial operators who are becoming more cautious. Indeed, if no agreement is reached soon, the entry into force of higher taxes and reduced spending automatically after 1 January 2013 may cause further economic problems to the largest economy of the world. The release of good earnings by Home Depot yesterday helped the U.S. stock market to limit the damage.
In Europe, the absence of an immediate agreement on Greece after an inconclusive meeting of finance ministers of the eurozone has revived fears about the fate of this country and its maintenance in the euro area. This endless situation continues to be the dominant issue in the global financial markets.
Technically, the dynamics on the Dow Jones is now bearish in daily data and under 13,160 points which refers to the 20-day moving average. A break below the daily blue wedge patern caused a sharp downward correction. The index is now trying to stabilize around the 12,750 key level. We will expect the exit of the 12715/13160 to take buying or selling positions. A break above 13,160 points should allow a further rebound towards 13,330 points, then 13,610 points. Conversely, a break below the 12715/12750 would open the way for further decline towards 12,640 points, then 12,410 points.