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

Friday’s volatility left the bears with the edge for UK and European markets, while in the US the rally goes on.

Traders on the New York Stock Exchange
Source: Bloomberg

FTSE 100 recovery falters at 200-hour SMA

An impressive FTSE 100 recovery from below 7200 on Friday afternoon was just as spectacular as the swan dive that preceded it in the morning. The rally edged over into the early part of Monday, but faltered at the 200-hour simple moving average (SMA), 7284, thus creating a new lower high after last week’s extensive consolidation above 7260.

If 7260 is broken again we may see a push towards 7196 and the 50-day SMA. The fact that last week’s high was below the high set in early January suggests any pullback from here could move below the 7090 lows of the January fall. 

FTSE 100 price chart

DAX may be turning bearish

Friday’s session saw the DAX price bounce from 11,720 and then push all the way to the 200-hour SMA at 11,860. However, since then the momentum has stalled.

A failure to get back above the rising trendline above 11,875 will signal the bears are in control. Now the downside needs to break the area around 11,700.

A rally requires a push back above 11,900, to allow the 12,000 level to be targeted again.

DAX price chart

S&P 500 returns to all-time high area

The S&P 500 shows no sign of weakness thus far, with Friday’s afternoon rally off the 200-hour SMA (2353) putting the index back at all-time highs. Friday showed there is still plenty of appetite to buy the dips, with only a drop below 2340 really suggesting the rally has run its course. 

S&P 500 price chart

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