DAX breaking to new five-month lows
The DAX is ahead of the FTSE in that it has broken below yesterday’s low already this morning, which could be an indicator that the same is going to happen in the FTSE. The price is currently resting on the 200-day SMA at 10,672 which, if we see an hourly close below, would point towards a move back to the descending trendline (currently 10,510) later this week.
Dow volatility points to a possible bounce higher
Dow Jones has been a picture of volatility this week, with the price ranging between 17,800 and 17,500. This has no doubt been a very difficult market to trade. Nevertheless, for those on the right side of the trade it will have paid dividends, given the big moves seen this week, as characterised by the abnormally high ATR (Average True Range) measure of volatility. Given the volatility, I would be very careful trading this market. However, with the range in play, I would be looking for signs of another bounce higher which previously has been instigated by the likes of a hammer candlestick pattern (whereas tops have been signaled by bearish engulfing patterns).