Levels to watch: FTSE, DAX and Dow

Greece is not fixed, but nor is it out of the eurozone yet. Indices have reacted negatively to the lack of progress, with a steady move lower underway during the morning session. 

A man looking at a candlestick chart
Source: Bloomberg

FTSE's progress dented

Three days of losses on the FTSE 100 will be enough to dent the enthusiasm of any bullish investor. The index finds itself back near the 200-day SMA (6743). A close below this level would suggest another move back to the 6650 zone we saw just last week, the index having lost the rising trendline on the hourly chart that had run from the 18 June lows.

On the intraday chart we are watching the 200-hour SMA (6760). While daily stochastics have yet to turn bearish, a weak close today would certainly set the cat among the pigeons. Any bounce higher needs to consolidate above 6840, as an indication that the selling has run its course.

FTSE 100 chart

DAX edges back

At present the index is moving modestly lower, and with fresh Greek talks now delayed until the weekend we may have a quiet end to the week. For me, the failure to maintain its hold above the rising October trendline dooms this index to more downside, although 11,400 is providing some support in the short term.

Given the importance of this weekend’s discussions I imagine trading in this index today will be of the cautious variety, but bulls will find it hard to muster the strength to push the market much higher than 11,500.

Germany 30 chart

Dow's stochastics bearish

A steady downtrend has been in place here for the past few sessions, the index having slipped lower on Wednesday and then provided a short intraday bounce that afforded sellers an opportunity to hop on board this particular downtrend. With daily stochastics now firmly in bearish mode this market is in ‘sell on the rally’ mode, so intraday moves higher such as we saw yesterday should be treated as selling opportunities.

A more serious sell-off would take us back towards the vital 17,700 level, which at this point now combines with the 200-day SMA. An hourly downtrend line running from the 23 June high would suggest that resistance will be found around the 18,000 mark. 

Dow Jones chart

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