A Test of the 15900 Ceiling

The Spanish IBEX 35 index concluded a week of extreme volatility, defined by a powerful failed breakout and a subsequent, grueling test of support. The index surged to a new 52-week high on Tuesday, only to be met with a wall of selling pressure that triggered a three-day slide. While a powerful last-minute rally on Friday saved the index from a negative week, its 0.44% gain significantly underperformed its U.S. peers. This divergence suggests that while dip-buyers are active, conviction at these new highs is fragile, leaving investors to question the health of the rally.

The Sharp Rejection at 15900

After a static and perfectly flat start to the week on Monday, the week’s primary narrative was set on Tuesday. The index opened with strong bullish momentum, pushing to a new 52-week high of 15894.20. This brought the market within striking distance of the psychologically significant 15900 level. However, this level proved to be a formidable ceiling. Sellers emerged with force, pushing the index down over 120 points from its peak to close at 15767.10. This was a classic “failed breakout,” a technically bearish signal that indicated an exhaustion of buying power and a significant pocket of supply.

A Mid-Week Hunt for a Floor

The rejection at the highs set a negative tone for the mid-week. Wednesday’s session saw the index successfully defend the 15760 level, closing slightly higher at 15781.60. This brief stability was shattered on Thursday. The index broke Wednesday’s support, plunging to a new weekly low of 15728.90 before staging an intraday recovery. This price action demonstrated that bears were in control, actively testing for a new market floor and shaking out weak-handed bulls who had bought into the failed breakout.

Friday’s “V-Shaped” Recovery

Friday’s session was a microcosm of the week’s entire volatile conflict. The index opened higher at 15830.50, but this strength was immediately sold into, driving the IBEX down to yet another new weekly low of 15723.90. This move, which broke the prior day’s support, appeared to be a final capitulation. Just as the market looked its weakest, dip-buyers entered with overwhelming force, driving a powerful “V-shaped” reversal of nearly 140 points from the low to close at 15861.50. This strong finish, however, was tempered by its underperformance against the 1.01% gain in the DJIA, suggesting a degree of relative weakness in the Spanish market.

The Path Forward

The IBEX 35 now finds itself caught in a technically defined range. The 15900 level has been established as a powerful resistance ceiling, while the 15720-15730 zone has emerged as the new critical support floor. The market is now coiled between these two forces. Investors will be watching for the next catalyst that can force a definitive break. A failure to hold the 15720 level would confirm the failed breakout and could open the door to a deeper correction, while a second, successful assault on 15900 would be required to reinvigorate the bullish trend.