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

After another good day, bulls can feel confident, but indices look ripe for some consolidation, if not modest downside. 

US trader
Source: Bloomberg

FTSE

The index managed to recover from a weaker start, pushing to new highs for the year. However, it remains overstretched on an intraday basis, and so the best approach may be to wait for another dip, rather than chasing the rally.

The next area to watch is 6444, while above this the index will head towards 6630. Any move back below 6400 should be regarded as a buying opportunity, with only sustained action sub-6340 imperiling the rally. 

FTSE

DAX

Having consolidated its hold above the 200-day simple moving average (10,277), there looks to be more upside on the way in the longer-term, but for now the risk lies chiefly to the downside for the DAX. Even a dip back to 10,300 would not necessarily mean the rally is done for, but it would catch out some late comers to the party.

Intraday stochastics remain heavily overbought, which may discourage any further buying momentum. While we are unlikely to be gifted another dip/gap down such as we saw on Monday, the sensible course would be do wait for a better entry, perhaps down towards 10,200, even if this sacrifices some upside. 

DAX

S&P 500

It would not be wise to argue with this rally, especially given the S&P 500's tendency to outperform in April, but as with the FTSE and DAX, it may prove best to wait until another dip appears, perhaps back down towards 2095 and the rising trendline.

Those expecting extended weakness will have to wait until the price gets below 2065 and stays there, otherwise the likely course remains higher. There is still the potential for another dip/bear trap that could catch people out.

US500

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