DAX in consolidation
For now the price action on the DAX seems more indicative of further consolidation rather than an immediate move lower.
However, a break of 11,927 would mark the first real sign of further downside. Below this, potential areas of support may arise around 11,720 and then 11,426. At present, bears will have to bide their time, while for buyers there may still be an opportunity for a push back to 12,080 if 11,927 holds.
S&P 500 to recover?
S&P 500 touched its lowest level since mid-February in early trading, but crucially it is below 2340 and also the 50-day SMA (2332). The next area of potential major support would be 2265, which would see all the gains since the end of January wiped out. A recovery from here, ideally reclaiming 2360, would signify a new higher low has been created, leaving the door open for a return to 2400 and the all-time highs.
Indeed, with options suggesting an increase in bearishness and the strength of the current rally still fresh in our minds, there is scope for a recovery of lost ground in the short-term, helped by the combined effects of end of month and end of quarter positioning, and inflows for the new month and quarter.