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

Markets have enjoyed further gains, with the FTSE 100 in particular racing higher. However, eurozone markets are running out of steam.

US traders in a stock exchange
Source: Bloomberg

FTSE 100

The post-Brexit FTSE 100 rally goes on. A combination of short-covering and some furious bargain-hunting has driven the market back to where it was a week ago. It is almost as if the referendum had never happened.

The next targets to watch on the upside are 6300 and then 6400. Any slump would need to break 6000 to see further downward moves develop, and in this case support is possible around 5900 and then down to 5725. 

FTSE 100 price chart

DAX

While the FTSE soars, the DAX has been a little more circumspect, failing to recover much of last Friday’s losses. In fact, if the price cannot get back above 9600 then the index may be a sell, with an initial downward move to 9200.

If it breaks 9600 then the next area to watch is 9800. European markets need to develop some momentum, and soon, to avoid turning rapidly lower.

DAX price chart

S&P 500

US markets sit between the UK and Europe in performance terms, and with the S&P 500 back at 2040, a bullish case can still be made. If the index can hold above 2040 then it may make an attempt on 2060, which would then clear the way to 2100.

A failure to close above 2040 raises the prospect of a drop back to 2022 (the 200-day simple moving average) and then the 2000 low from last week. 

S&P 500 price chart

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