Levels to watch: FTSE 100, DAX and Dow

Global markets have tumbled heavily, retaining the bearish trend that is in place. With a rebound looking likely, how long would such a move last?

New York Stock Exchange
Source: Bloomberg

FTSE 100 drops below key support

The FTSE 100 has continued the decline seen throughout October, with a break below 6920 yesterday. That continues the trend of lower highs and lower lows.

However, we need to see a break below the 6841 level to provide a more long-lasting bearish signal as this would bring about a new 22-month low for the index. As such, while the bearish view remains in place, a break below 6841 would provide a greater bearish picture for the index.

DAX sell-off continues after head and shoulders

The DAX continues to sell off following the completion of a head and shoulders formation this week.

The wider bearish picture remains in play, with any rebound looking primed to sell into as long as we do not break through the 11,436. Should that occur, we would be looking at a likely retracement of the wider selloff from 11,851. Only with a break through 11,851 would we be looking for a wider recovery for the index.

Dow downturn persists, with key trendline broken

The Dow Jones has dropped once more, with price hitting a three-month low. That points towards a potential wider selloff, yet with the index starting to rise from the 76.4% retracement, there is a chance we will see some form of bounce from here.

However, we would need to break through 25,356 to negate the idea that such a rebound would be a short-term phenomenon.

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