Levels to watch: FTSE, DAX and Dow

Indices are back in bearish mode, as disappointment with the European Central Bank lingers. 

A man walking behind a chart board
Source: Bloomberg

FTSE bears in control

Yesterday’s sharp drop puts the bulls firmly on the defensive, with fresh losses looking likely if we move below 6200. For now, a bounce towards 6290 may materialise, especially as positions are unwound today, but so long as the index holds below 6300 the outlook is now bearish. A continued downward move heads towards 6137 and then the bottom end of the current rising channel, around 6090.

DAX below late-September rising trendline

Mario Draghi’s failure to deliver on market expectations regarding the current QE programme has put the DAX below the rising trendline from late September, and also below the descending trendline from the April highs. A bounce from the current level would head towards 10,884, hitting the afore-mentioned April trendline, but so long as the index holds below here more downward movement is expected. Support is possible around the 100-day SMA at 10,600, with further targets around 10,448 and then 10,202.

Dow could fall to 17,400

US markets were marginally less disappointed by the ECB yesterday, but still continued to lose ground. For now they are constrained by the 200-day SMA at 17,566, but the other problem will be the descending trendline off the 2015 highs (17,645). A failure to break above here targets the lows of yesterday near 17,400, with further support around 17,332 and then 17,148.

This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.