European Stock Indices Go Bearish. September 26th 2012.

European stock indices are trading in the red zone. The major reason for the decline is believed to be Charles Plosser’s statement that the 3^rd round of quantitative easing (QE3) started by the Federal Reserve has been ineffective so far.

The market situation looks as follows:

·         Stoxx Europe 600: -0,8% down to  273,72.

·         Euro Stoxx 50: - 1,7% down to  2524,92.

·         FTSE 100: - 0,85% down to  5810,11.

·         CAC 40: -1,82% down to  3449,98.

·         DAX: -1,4% down to  7321,47.

The chart below, courtesy of , reflects the current state of affairs in the market of FTSE 100:

At this point, the index is most likely forming wave 5 of the downward zigzag pattern. In short-term perspective, we expect the price to break below 5795. It may be followed by a recovery, which may later turn into a trend reversal. The key level of resistance is 5868.