FTSE 100, DAX and S&P 500 go firmly into reverse

Indices have taken fright at the spread of the coronavirus, moving sharply lower in early trading after gaping down overnight.

FTSE 100 renews its move lower

The FTSE 100 has bid ‘hello’ to rising trendline support, gapping down on the open and encountering the post-December 2018 line of support that has held three times in recent months (September, December and January).

If this is broken then 7230 comes into view, and then 7130 and 7000 are areas of possible support. Both the daily stochastics and the moving average convergence/divergence (MACD) have rolled over, suggesting the sellers remain in control.

DAX finally moves to the downside

The DAX has finally joined in the general move lower, having fought to hold above 13,600 over the past month. Further losses below possible support around 13,200 target 12,954 and then the 200-day simple moving average (SMA) at 12,650.

This last would also see the post-December 2018 rising trendline tested for the first time since August. As with the FTSE 100, momentum indicators such as stochastics and MACD have turned negative, while we will need to see the price move back above 13,500 to begin to provide a more near-term bullish impression.

S&P 500 drops sharply at start of new week

This morning’s gap lower has carried the S&P 500 back to the 50-day SMA (3284) and below.

Further declines test the area of support around 3210 (blue rectangle), which was tested at both the beginning and end of January. Dips into this area might see buyers emerge, while below this the post-December 2018 rising trendline comes into play, possibly around 3200. The price has moved in a straight line from last Thursday’s highs, so an intraday rebound might see fresh selling pressure, with a move above 3330 needed to close the overnight gap.


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