Levels to watch: FTSE 100, DAX and S&P 500
Yesterday’s sell-off will have some bulls worried, but it is a job half-done by the bears, and already some buying pressure is in evidence.
FTSE 100 edges higher after drop
The FTSE 100 suffered a sharp reverse, dropping back towards the 6840 support area.
Repeated failure to break 7000 suggests a deeper pullback is at hand, with 6800 the first target before 6640. Alternatively, if the index holds 6800 then it is in a range between 6800 and 7000.
DAX stumbles, but uptrend intact
Having broken above the 50-day simple moving average (SMA) last week, the DAX retains some bullish characteristics.
A more bearish view requires a move below 10,800, key support in the middle of January. A recovery above 10,900 would create a higher low and suggest another attempt to push on above 11,300.
S&P 500 recovers from overnight lows
Despite the pullback seen yesterday, the S&P 500 is still in an uptrend, although a recovery back above 2650 is needed to help create a higher low and revive the bullish view.
The areas of support to watch are 2617 and 2595 in the near term.
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