One of the fears on the part of small and medium investors at the moment is that the equity markets could enter a clear downtrend that puts their investments in jeopardy. There are already some very alarming signs on a new scenario in the financial markets that may anticipate a decline in the main stock indices around the world. But in most cases, this fact does not come as a surprise and it is no longer possible to do anything. Unless we assume the losses in the securities portfolio.
This is a scenario that has happened over the years and that is reflected in the history of investments and financial markets. In this sense, the Crac of 29 ?? it was the most devastating stock market crash in the history of the US stock market, taking into account the global reach and the long duration of its aftermath. To the point that it gave rise to the already known as Crisis of 1929 also known as The Great Depression and that led thousands and thousands of investors to go bankrupt in a very short space of time.
So that you do not stay in very worrying positions, we are going to show you some of the signals that can be generated in the financial markets about the appearance of a downward current of great depth and intensity. So that in this way, you can use the best strategies to minimize this new scenario in equity markets. Beyond other technical considerations and even from the point of view of the fundamentals of the securities listed on the equity markets.
The US stock market anticipates trends
In this regard, it should be remembered that in the last trading days, the Wall Street market is suffering closings that are really very worrying for stock users, even with losses of up to more than 1.000 points. These crashes have been caused by the nervousness of investors that caused them to withdraw from the market for fear of the negative economic consequences caused by the increase in interest rates and the United States' trade conflict with China.
On the other hand, agitation occurs one day after the International Monetary Fund (IMF) cut its forecast for global growth due to concerns about trade wars and weakness in emerging markets. Therefore, there will be no choice but to be very attentive to what happens in the first equity market in the world. Not surprisingly, it is characterized by anticipating the trend of stock exchanges in the rest of the world in one way or another. It can be argued that the markets on the other side of the Atlantic have a great influence on international stock markets.
Decreasing lows at closing
Another sign that can indicate that a bearish scenario is coming to us in the equity markets is the one referring to the fact that decreasing minimums are generated in the price of securities, sectors and stock market indices. Is a very strong and reliable signal to detect that we are facing a clearly selling current that can take the price of the shares much lower than they are at the moment. It is a low current detection system that is above all very reliable and we can execute it with complete safety.
On the other hand, there is no doubt that we will need a graph to visualize the weekly closings, which is the moment when this important analysis system for equity markets can be analyzed. Not only in the purchase and sale of shares in the stock market, but for others, such as those represented by raw materials, precise metals, virtual currencies and any financial asset that is listed on the markets. It will give the exact point at which it will be necessary to undo the positions in the financial assets chosen by the small and medium investors. Without fear of mistakes or mismatch in your analysis. You can use it with complete confidence from these precise moments.
Roof formation
Within what is technical analysis there are a series of figures that can give us the odd signal that the price of the shares is going to fall in the next trading sessions. Among all of them, there is one that is especially significant such as the double and even triple roof. But what does this setting really imply in the graphics? Well, both double and triple ceilings are usually raised in an assumption side channel whose breakout of support poses a bearish target. They are also called trend reversal figures, bullish to bearish. They are very useful and easy to understand for all investor profiles.
On the other hand, there is another figure of special relevance that also has these connotations. In this case it is through the well-known figure of shoulder-head-shoulder. In this case the loss of the support of the line poses a bearish objective of great intensity. At least developed in the short and medium term and that on the other hand has a great reliability in the diagnosis since it is rarely wrong in the course that the stock market values analyzed in the technician are going to take.
Analysis: descending triangle
Regarding the chart analysis one of the most common shapes are triangles. To the point that they are present in all the values of the equity markets and can give you another clue about where the shots in the investments that you have prepared from these precise moments can arrive. In any case, this class of triangles can be divided into several categories, although the one we are going to treat is called descending due to its clear bearish implications.
Well, the descending triangle is the one that is formed by a horizontal line that works as a support and a bearish guideline, the price is making decreasing maximums within the triangle. If for something this type of triangles it is for something as simple as that they tend to break down most of the time. They can give you a point of reference to undo the positions in the equity markets and in this way you are in a better position to optimize your operations in the stock market. Beyond other technical considerations
Tips for trading the markets
A good purchase in the stock markets means going a long way so that the results in the form of capital gains do not take long to arrive. But for this to be so defined, there will be no choice but to take a series of guidelines and also precautions. With the aim that a lousy position taking may weigh on our investment in the future. Although at the cost of developing an upward trend for a more or less prolonged period of time.
Before taking positions in a security, it is advisable to study its technical and fundamental aspect. In any case, do not leave it to a random choice that can only bring problems towards the interests of small and medium investors. Fundamentally because they can originate in the form of handicaps that detract from open trades in equity markets. This is one of the main tasks that we must preserve from these precise moments and above other more secondary considerations.
Technical analysis with the fundamental
Getting into the right sectors also simplifies the selection work when building a portfolio, as it is likely to capture positive market sentiment. Regardless of which bet was chosen, as long as the fundamental data of the companies is positive. In this sense, a very practical measure is to correctly combine the technical analysis with the fundamental. It works very well, as investors with more experience in equity markets can find.
On the other hand, we cannot forget at any time we will have to forget the dysfunctions that we may commit at some point or another. As for example, the fact that it is completely normal for investors to enter the stock market out of time. That is, after much of the bullish formation has been consumed. Where it may no longer be the best time to enter the markets. It will therefore be another dysfunction that will have to be corrected to achieve the goals set by small and medium investors.
Faced with this scenario, the investor should proceed to have solid guidelines to carry out their purchasing process. In this sense, the simple guidelines that we have just provided and that are very easy to follow, even for less expert investors, can be of great help. Because what it is about is at the end of the day to make the savings profitable above other considerations that we have pointed out in this article. Beyond other technical considerations and maybe even from the point of view of its fundamentals.