What happened this month “January 2016” is considered to as the worst yearly start for markets across the globe as china market lead the Indices dive followed by the rest. The big headlines blaming china and lower oil prices for what happened and ignoring the fact that market already gave plenty of weakness signals last year !! I believe those kind of declines are amazing opportunities for smart traders to make big profits , it takes time to prepare and analyse for such movement and you couldn’t guess the right timing because when it happens it moves fast so If you had your positions ready for such kind of sharp fall you’ll just relax and enjoy the show.
Let’s just take a look at previous month scenarios calling for lower levels
As you can see indexes reached support areas and the bounce already started 2 weeks ago , so any shorts should have already been covered in the drop and longs jumped at supports for either a bounce or new bull market rally.
Key support area 1850 – 1800 while above it SPX could make new highs
Key resistance area 1950 – 2000 if it holds SPX could target lower levels 1660 – 1600
Dax still holding above 9300 support which is bullish signal but if it fails to break above 10600 – 10.800 that could bring it to lower levels around 8300
The 16000 support zone held strongly and now JPN225 could either target new highs or fail around 18400 – 19000 for a move lower to 14500 – 13000
So for a conclusion every time market corrects in a sharp fall don’t panic like public media , if you didn’t profit from the decline just wait for the right moment and get in the bounce , it could be your tickets for the new trend.