FTSE support at 6650
The FTSE 100’s drop back through the 6700 level signals how indecisive markets have been in recent weeks, while the current price action below the 200-daily moving average will be a worrying sign for those expecting further gains.
However, the uptrend off the mid-2013 lows is intact, and while this holds I continue to think that further upside remains the more likely eventuality.
Having said that, a close back through 6700 is necessary before we can be more relaxed about this scenario. On the downside, the 10 July low around 6650 is the first support level to watch for, followed by 6500 should the situation worsen in earnest.
100-DMA still holding for DAX
Those worried about the Germany 30 would be wise to keep their eyes on the weekly chart, which sends out a clearer signal about the integrity of the rally.
On the daily chart the 100-DMA is still holding for now, as it did last week, but even a move back towards 9500 and then the 200-DMA would not interrupt the rally.
A declining relative strength index and other momentum indicators show how weak the current market is, but a sizeable dip would hopefully open the way for the ‘buy on the dip’ crows to re-enter in earnest.
Dow's uptrend under threat
The market's uptrend from February is now under threat for the first time since mid-May, but even a move towards the 50-DMA would be a short term dip.
A recovery in coming sessions leaves the target on the upside at around 17,130, the highs of the middle of the week. Only a break through 16,800 moves the shorter-term viewpoint to a more bearish one. So long as the 200-DMA holds, the long-term outlook remains firmly bullish.