The correction occurred on the stock exchanges and was caused by the fear of an escalation of the conflict. Is there a distribution going on on WIG20?

Stock markets resisted for a long time before making a downward move in the form of a correction of the previous upward wave. How extraordinary the situation was, especially in the United States, can be seen from the fact that we are currently in the third declining week. the S&P 500 index, which is the longest series since September 2023.

In turn, the two-day decline of this index by 2,6% is the largest two-day decline in over a year. Therefore, it can even be said that the current correction is nothing extraordinary, but the previous increases were extraordinary, interrupted by very slight price pullbacks, and they lasted until November 2023.

For the quotations of contracts on the main American index, support may be provided by the zone of 5100-5030 points, which results from the range of volatility for this index assessed a few weeks ago (option players may want to maintain this zone), and in the event of acceleration of declines and its overcoming, attention may be paid to around 4930 points.

The above description is favorable for market bears, but there is also something for bulls. We are talking about the statistics and seasonality of the SPX index. Well, in measurements since 1985, April 15 was usually the statistically average bottom in the index quotations. Then, the rest of April was marked by growth. However, this scenario would become more likely if the quotations returned above the level of 5125 points.

WIG20 – potential distribution continues

While the American S&P 500 index began its correction on April 1, the beginning of the distribution phase on Wig20 can be dated even to the end of February. The break of the peaks on April 9 can be treated as part of a potential distribution and the so-called bull trap.

In order for the stock distribution pattern to continue after the boom that has been going on since October 2022, our index would have to fall again to around 2300 points and then rebound again towards 2500 points. around the beginning of the holidays. Only later did another attempt to retreat and overcome 2300 points. could lead to a permanent decline, probably with the closest target being an "election" gap of close to 2000 points.