Levels to watch: FTSE 100 and S&P 500
Yesterday’s surge will come as welcome news for the bulls, and might suggest more to come, but already the sellers are looking to resume the downward move.
FTSE 100 fights to hold on to gains
FTSE 100 futures surged yesterday but have edged off the highs in early trading. Rallies have been the cue for selling, so we may see further declines, but if the buyers can hold the lows around 6515 then a tradeable low may be in for now.
However, the surge needs to break back above 6800 to suggest a short-term bottom is firmly in place, and this would then allow the index to target 6920. From here 7000 comes into play, which is descending trendline resistance from the August high.
S&P 500 under pressure after post-Christmas surge
Only time will tell whether this rally for S&P 500 ends up like all the others over the past two months and gets heavily sold into.
Those looking to sell the rally have the overnight peak around 2480, while bulls will be hoping that any pullback results in a higher low that provides an indication that the current bounce may last into the rest of the month.
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