Levels to watch: FTSE 100, DAX and S&P 500

Although well off the lows from last week, hopes of further gains have so far been dashed.

FTSE 100 bounce runs into selling pressure

The steady upward move of the FTSE 100 has suffered a reverse, dropping back to support around 7070. Further weakness would suggest a move towards 6920.

It is worth watching the index as this is the first serious weakness seen since the bounce from the end of October. If buyers can turn the price higher, then we should see further strength, but arguably an inability to hold above 7050 would suggest that a push back to the lows of October could be in the offing.

DAX moves sideways after strong bounce

Here too, Thursday and Friday both saw the DAX unable to hold on to all of its gains, but since it had rallied nearly 6% from trough to peak it is not surprising to see some near-term weakness.

For now, the bulls appear to be holding their ground, with further support possible around 11,425, and further gains target 11,700 and higher. So far, the price continues to post higher lows in its rally, so the bullish case survives unless the price drops back below 11,300.

S&P 500 under pressure following Friday drop

The S&P 500 retreated rapidly on Friday, falling victim to some late bearishness in the wake of non-farm payrolls.

However, for now it continues to find support above 2700, so, while this persists, a push back towards 2760 and higher may well take place. A move below 2680 would reinforce the bearish case and suggest a renewed push towards 2600 and the October lows.

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