S&P500 index

I refer to my post of April 30, 2010: I had raised a red flag because of the price divergence between the Shanghai index and the S&P500 index. The past week has seen a big drop of the markets around the world: the S&P500 index lost 6.4% in the week and is now touching its 200 day moving average. The resistance stands at the level of 1200.
On Thursday the panic was in the market as the S&P500 lost 9% in almost 10 minutes before recovering to a loss of 3.2% at the end of the day.

Weekly chart:

Daily chart:

As you can see on the daily chart above, the S&P500 now stands at the same level it was at the end of last year. After trading up more than 9% year-to-date on April 23, it took only a couple of days to get rid of months of hard-earned gains.

The situation on the European stock markets is much worse: the Eurostoxx 50 index lost 11.2% during the week and is now 16.5% below the price it had reached at the end of last year.

This panic caused the US dollar and Gold to raise strongly as they are seen as the safe heavens in the current circumstances.