Levels to watch: FTSE 100, DAX and S&P 500

Europe is once again falling prey to selling, but the S&P 500 is still holding up after a very strong performance earlier in the week.

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Source: Bloomberg

FTSE 100 hit hard on the open

The FTSE 100 is suffering from a bout of early morning weakness, dropping back towards 7000 after faltering above 7060 during the week.

Buyers stepped in earlier in the week around 6980/7000, so this is an area of potential support, while below this 6920 and then 6840 come into view. A move above 7080 opens the way to 7200.

DAX drops sharply towards trendline support

After failing to hold 11,400 earlier in the week, the DAX is on the back foot, testing the waters below 11,300. Dip buyers entered earlier in the week around 11,300, so if the price can recover this sends a signal that buyers are still active.

However, further support is possible from the rising trendline from the 20 November lows, around 11,235. A daily close above 11,400 would send a bullish signal.

S&P 500 edges back from highs

The S&P 500 held its gains yesterday, but little else, and we are seeing some early morning weakness.

However, unlike the FTSE 100 and DAX, which have only managed anaemic bounces, the index is up 4% from the lows, so a pause would not be surprising. The broadly bullish view is maintained unless the price moves back below 2690.

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