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

The uptrends continue for equities, but the US still looks the strongest, outpacing its European counterparts.

FTSE 100 rally carries on for now

The current move higher from 7490 reached a new higher high yesterday, although not by much, and the FTSE 100 was unable to sustain the gains overnight.

A drop below 7600 would be potentially bearish, but a move below 7570 would really signal that upward momentum has faded. Above 7650, further gains towards 7700 and 7800 are possible.

DAX heads towards trendline resistance

The move higher in this DAX is still intact as well, and continued price action above 12,480 would suggest that the buyers remain in charge.

In this scenario, a move towards 12,650 will bring downtrend resistance from the June highs into play. A move below 12,450 would signal that bearish momentum is increasing, and that a move towards 12,100 support could develop.

S&P 500 back at record highs

With the S&P 500 looking overextended, but still in a strong uptrend, dips towards 2870 should be viewed as short-term buying opportunities.

A move below 2850 would likely signal that a deeper pullback is underway, and historical September seasonality for the index suggests weakness is possible, with the average return for the month over the past 20 years being -0.8%.

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