FTSE, DAX and Dow rebound towards major inflection points
FTSE, DAX, and Dow rebound coming into question as wider bearish trend brings doubts over longevity of recovery phase.
FTSE 100 continues to push higher after double bottom
The FTSE 100 has been leading the push higher over the course of this week, with price following up the Monday break through 7105 resistance by moving up through the subsequent retracement area.
The wider trend does signal the potential for a deep rebound, bringing a possible move back towards trendline resistance. Alternately, we could be looking at a Fibonacci retracement, with the 61.8% (7244) and 76.4% (7371) levels providing two notable areas of resistance worth considering up ahead.
Ultimately, whether we see price reverse lower from the simple moving average (SMA), Fibonacci, or trendline resistance, the current rise does look like a short-term phenomenon before price reverses lower once again.
For the near-term that means there is also a strong possibility for further upside over the short-term.
DAX rises towards crucial resistance level
The DAX has enjoyed a substantial surge over the course of the past month, with October representing the best performing month since November 2020.
This takes price up towards the critical 13570, with this rise having already seen a move up through the descending trendline dating back from the beginning of the year.
A rise up through the 13570 swing-high would bring an end to the trend of lower highs established over the course of 2022 thus far. Until that level breaks, there is still a chance that we see price roll over to continue the wider bearish trend.
A move down through the 80 threshold on the stochastic oscillator is one key signal worth following as an indicator that the bears are back in charge.
Dow starts to fade from Fibonacci resistance
The Dow has been at the forefront of the recent stock market gains, with the index gaining 14% over the course of October. Nonetheless, this week has seen price start to take a turn lower, with the wider 76.4% Fibonacci level coming into play at 32970.
Today sees the Federal Open Market Committee (FOMC) come back to the fore, with their latest monetary policy decision providing volatility and directional bias going forward.
The wider trend does highlight the potential for another move lower from here, with a decline through the 80 threshold for the stochastic providing us with a notable signal that momentum has shifted back into the hands of the bears.
To the upside, a break through the 34285 level would be required to negate this ongoing bearish trend.
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