Ibex 35 Pullback Tests Bullish Trend as Key Weekly Support Looms

Spain’s Ibex 35 has corrected from 17,833 points in recent sessions, hitting a low of 17,334 on Tuesday and even briefly dipping below last week’s floor of 17,400. Despite the pullback, the short-term bullish structure remains intact for now.

According to Joan Cabrero of elEconomista.es, the decisive factor is the weekly close. “As long as there isn’t a weekly close below the previous week’s lows, we can’t speak of a significant deterioration in the short-term bullish structure,” he said.

Cabrero emphasized that a clear weekly close below the 17,400-point mark would be the first sign of waning buying pressure. “That’s the true market thermometer, not intraday moves or occasional scares,” he noted, adding that a significant top in the recent rally has not yet been confirmed.

Should the market turn lower, a more substantial pullback is not out of the question. “If things finally take a turn and we see a bigger scare, something natural within the underlying bullish process,” Cabrero warned, “I would not rule out a retreat towards the December lows, around 16,265 points.”

A drop to that level would represent an 8-10% correction from the recent highs at 17,833. Such an adjustment, he argued, would be “far from worrying, it would fit well as an opportunity to buy Spanish equities again.”

Watching the Global Stage

Broader market sentiment is being shaped by geopolitical tensions. “The tariff war 2.0, or territorial war 1.0, if you prefer, is in full swing and has the potential to cause significant market disruptions in the short term,” said Victoria Greene of G Squared Private Wealth in comments to Bloomberg. “A lot depends on how the next few weeks unfold. So, we are not panic selling, but watching closely and preparing for volatility.”

Investors are closely monitoring President Trump’s trip to the World Economic Forum in Davos, following heightened trade tensions with Europe.

U.S. stock futures are signaling a slight positive open for Wall Street, suggesting a potential stabilization after the S&P 500 posted its largest single-day drop since October on Tuesday. Asian stocks, however, did not follow suit, posting widespread declines even as chipmakers like Samsung Electronics gained. Safe-haven demand remains strong, with gold hitting new highs and silver trading near its historic peak.

European Indices Retest Key Levels

The short-term pullbacks in European markets are “logical and normal,” according to Cabrero. The EuroStoxx 50 has fallen back to the 5,800-point area, a former resistance level that is now acting as support. Germany’s DAX has seen a similar move, returning to 24,680 points, the ceiling of a range it broke out of weeks ago.

“This movement can be interpreted as a throwback, a pullback before further gains, as long as Wall Street doesn’t lose relevant support levels,” Cabrero stated.

The key index to watch is the Nasdaq 100. For a more significant corrective phase to begin, the tech-heavy index would need to lose its initial support at 25,000 points. “For now, that has not happened,” Cabrero said. “The trend dictates the terms.”