S&P, Gold, DAX Trades Amidst Coronavirus

S&P, Gold, DAX Trades Amidst Coronavirus

One thing that markets hate the most is uncertainty. That is why we have seen an acceleration of the risk-off mode since Thursday.

Uncertainty is coming from the coronavirus as we do not really know the real scale of the outbreak. The fact that it originated in China makes it even more complicated. Traders do not really believe if the official GDP data is legitimate, so we should not be surprised that they are also suspicious about the numbers of the deaths or people affected.

S&P 500 ended last week and starts a new one in the same manner – with a huge drop. The heads and shoulders that we mentioned on Thursday, works. Price managed to break the dynamic support connecting higher lows since the beginning of December. Now, we are aiming for one connecting lows since October. Buyers should not worry too much though. We still have many major supports that can stop the decline. Remember that U.S. indices love V-shape reversals and for the past 10 years, each drop was rapidly turned into a buying bonanza.

On Thursday we also warned about the correction of DAX. There was no surprise here and German Index also declined. Here, we also have a Head and Shoulders formation and currently, the price is breaking the neckline. As for now, it is nothing serious and European Bulls remain strong.

Risk OFF mode usually means stronger gold. It is not different now. On Gold, I can see a small Inverse Head and Shoulders pattern. It is not the prettiest one but trading is not a beauty contest. Principle is here: the price made a double bottom formation, then tried to go down again and failed to break the neckline. As long as we are above the neckline and the orange support, sentiment seems positive.

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Axiory Analysis

S&P, Gold, DAX Trades Amidst Coronavirus

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