The stock market is about to panic

the to retreat With the general index of the Athens Stock Exchange falling below the psychological limit of 1,400 units, the positive momentum of the market appears to be collapsing at the moment. It is the first major correction since October 2023, which took DG to -3.55% from this year's highest close of 1,434 points.

Even more worrying is the sense of panic that arose in the market after losing 51 points from its 2024 highs compared to the decline itself. Which is objectively small. In fact, things would have been much worse if the decline to 1,364 units had not been “collected” in the Friday session, which would also see a bearish breakdown of 1,380 units.

In essence, over the past few sessions, investors who bet on the upside to 1450 points and on the way to 1500 points emerged as sellers. This fact also mobilized many investors who decided to “book” their not-so-large profits from October 2022 until today, especially from banking sector stocks.

Have the fundamentals of listed companies changed? No, in fact during the following days both PPC and… Jumbo They will announce results that, according to analysts' estimates, will be in line with the record profitability demonstrated by companies listed on the Athens Stock Exchange for the fiscal year 2023. Have the expectations for dividend yields that investors are eagerly awaiting have changed? Negatively? No, this is not the case either.

The market may still be “digesting” the lack of an upgrade in the country's credit rating by Moody's and the JP Morgan report, which said that it would be better for the Athens Stock Exchange to remain in emerging markets and not be included in the group. Developed markets due to the negative balance between capital inflows and outflows.

The market may have been shaken by her scandal Beryllium Investment Services ΑΕΠΕΥ Its license was revoked by the Capital Market Authority due to “violations of the provisions of Law 4514/2018 and EU Regulation No. 565/2017, mainly due to the failure to take measures to protect its clients’ funds and in relation to the main regulatory processes issued to it.” According to the information, funds totaling more than one million euros are missing from the company's common fund. It is not the amount that is of concern as much as it is the possibility of fraud and misappropriation of funds at the expense of shareholders, by an institutional investor. We have seen such a scandal on the stock market for a long time.

maybe He buys He is concerned about the tension returning to the internal political scene, with the possibility of holding double elections on the table according to the opposition and according to some extreme scenarios regarding legal developments regarding the representatives of the “Spartiate” party.

The market may still be starting to be affected by the weakness of Wall Street's uptrend, which has prompted several important indicators to “dispel” the feeling of excessive greed. Thus, we see the CNN index of fear and greed declining to 61 points corresponding to “greed” and heading towards 50 points, after abandoning values ​​of excessive greed above 75 points.

We see the CBOE Volatility Index, known as the “VIX Fear Index” moving above 16 points away from the 50-day moving average. Place the selected indicator on “extreme fear,” that is, excessive fear.

Also in the neutral zone is the “Pull & Call Option” indicator, which monitors the ratio between stock buy and sell options every five days, which gives a clear picture of investors’ nervousness.

Of course, even on Wall Street the current turmoil is excessive. The S&P 500 is only 1% below its all-time high. Technical indicators and hourly moving averages are in the “neutral” zone, as we see below,

While the daily technical indicators and corresponding moving averages still give “strong buy” and “buy” signals, as we see in the following chart.

So, both in Wall StreetAs with the Athens Stock Exchange, there is more hesitation about continuity, anxiety and fear, rather than general disillusionment and radical change in the climate. The fact is that stock valuations are high across all stock exchanges and require continuous growth in volumes and profits to maintain.

This increase is neither certain nor certain, based on data on inflation, geopolitical tensions and uncertainty about elections in the US and the European Union, as well as the decisions of central bankers who have marked their 6-month calendars. Decisions to reduce interest rates.

The extreme fear zone for the general index of the Athens Stock Exchange ranges between 1350 and 1360 units. At these levels there should be a quick reaction on the part of buyers with the aim of re-exceeding 1386 points and recovering 1400 points. So as not to cancel the path towards the previous highs of this year and 1,500 units. If not, a pullback below 1350 – 1360 units with strong trading volume could, according to chart analysts, lead to a long-term sideways downtrend.