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

Games in Washington are contributing to caution in markets, although the bulls still have the upper hand for now. 

Data trader
Source: Bloomberg

FTSE 100 in danger of drifting

The rally petered out yesterday around 7350 on the FTSE, but bears need to get the price below 7300 to really indicate they have the short-term advantage. Even if this occurs, we need a close below 7262 to bring the sequence of higher lows to an end.

With so much uncertainty over the healthcare bill, we could see the market drift for now, although the impending month and quarter end could see a short-term push higher. In the longer term, a rally would target 7440, while bears have to wait until 7262 is broken.

DAX about to turn lower?

Opportunists could make a case for saying the failure to recover 12,100 would indicate a turn lower is at hand for the DAX. The first target would be support at 11,927, and then down to the low of the week at 11,850.

For bears, the 11,720 area would be the next target, and only a close below here would create the new lower low that could signal a real direction change. A rally from here needs to clear 12,100 and then push to 12,176.

S&P 500 awaiting decisions in Washington

There wasn’t much follow-through to Wednesday’s bounce for S&P 500, so it looks like we are going to have to wait for the developments in Washington.

For now the rising trend holds, and we will need to see a break of 2331 and the 50-day simple moving average to be certain that more losses are in store. 

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