FTSE 100, DAX and Dow crash lower, but will support hold up?
FTSE 100, DAX and Dow slump into multi-year lows. With key support levels coming into play, will we see a short-term rebound or simply head lower yet again?
FTSE 100 sell-off continues, as virus fears dictate sentiment
The FTSE 100 sell-off has continued apace, with the index falling into the lowest level since 2012. However, while the price broke below the 5497 low from February 2016, the consolidation we are seeing above that key area points towards a potential rebound today.
Certainly, the wider outlook remains bearish, and a break below 5497 would bring about a signal that the selling is likely to continue. However, given the sharp decline into this support level, there is a chance we see the next phase of consolidation start to build as we retrace some of the overnight declines.
DAX tumbles into trendline confluence
The DAX weakness seen overnight has taken the index drop into the lowest level for over three years. Those losses have moved us into a confluence of trendline support, with one originating from the 2009 financial crisis low.
With that in mind, we have a major hurdle to overcome down below, with the potential for a rebound due to that fact. Once again, we do not know if there is any bullish sentiment to drive a short-term bounce, yet it makes sense to await a breakdown below this level to provide greater confidence that we will not see such a short-term rebound.
Dow Jones attempting to break lower yet again
The Dow Jones has precious few major support levels down below, with the price currently trading back at the lows seen overnight. This 22,354 level will prove key, with a breakdown below that point signaling an end to the minimal rebound seen today.
With that in mind, the bearish outlook remains in play, with a break below 22,354 required to signal the likely beginning of another leg lower. Given the major support levels seen in other markets, there is a chance of a short-term bounce. However, a decline from here would lessen those chances and instead point towards further downside.
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