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

Pre-election nerves and hesitation ahead of the Federal Reserve meeting this week are combining to hold back bullish momentum in stock markets. 

Data on screen
Source: Bloomberg

FTSE 100 could see late September low

After a steady grind lower from the record highs of early October, perhaps November will offer something more for the bulls. Certainly, with daily stochastics at levels not seen since mid-September, and price action indicating plenty of support around 6920, we could see a push higher from here, so long as the aforementioned level holds.

An initial area of resistance could be around 7040, while beyond here the next target is 7130. Below 6920 the index could target 6760, the late September low.

DAX post-June rising trendline still holds

Having stabilised yesterday above 10,600 the price is now happily pushing back towards 10,800. However, buyers will need to get a daily close back above 10,800 for the DAX.

With daily stochastics overstretched (ie above 40) room for gains may look limited, particularly if EUR/USD appreciation continues. Nonetheless, a close above 10,800 would head towards 11,000 and then 11,500.

The post-June rising trendline still holds, so bears will need a close sub-10,560 to indicate that they really have the upper hand.

S&P 500 eyes 2100

The slow deterioration in US indices goes on, with yesterday’s price action petering out below 2140. With this previously key support now evidently acting as resistance, we could see a bigger push down to 2100.

Undoubtedly pre-election concerns are continuing to weigh on the market at present, so forward momentum will be difficult to come by until the result is known.

So long as 2100 holds the ongoing rally could still be said to be intact, but a drop through here could signal difficult times ahead for the S&P 500

The information 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 Bank S.A. 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 and as such is considered to be a marketing communication.