Levels to watch: FTSE, DAX, Dow & S&P 500

Although slightly weaker this morning, the general trend remains upward for indices, with dips likely to be viewed as buying opportunities.

Trading data reflected in trader's glasses
Source: Bloomberg

FTSE dips should be bought
Although the index has dropped back from the highs of yesterday’s session, it remains above the 14/15 April highs around 6375. If the index can hold these then another push on through to fresh highs for the year and the 6440 level looks possible.

Dips should continue to be bought throughout April and May, as the usual seasonality effects kick in. Bears are unlikely to get much traction unless they can get the price back below 6320. Even then, if the dip does not move below Monday’s lows then it remains within the sequence of higher highs/higher lows which characterise an uptrend.

FTSE 100 chart

DAX looks set for slight drop
The index looks overextended on the intraday charts, and thus looks ripe for some kind of modest drop, perhaps down towards 10,140.

Buyers may be slightly concerned if the price does move below 10,100, but as with the FTSE, if the price can hold above Monday’s gap down (i.e. above 10,000), the best approach would still seem to be ‘buy the dip’.

Above 10,300 the index continues to target 10,474, the second weekly resistance pivot, and then on towards 10,800 and the late December high.

DAX chart

Dow still looking strong
An overnight pullback still leaves the index above the highs of late last week, and any bounce from here may well see a push above 18,100 and on towards 18,350 and the all-time highs of last May.

Any dips back toward 17,800 should see buyers emerge once more to maintain the upward momentum. A bigger dip towards 17,500 would still leave the upward trend from mid-February more or less intact, with such a drop providing a significant buying opportunity. 

Dow Jones chart

S&P 500 buyers comes out the woodwork
The S&P 500's upward trend off the lows from 11 April is still intact, with the dip on Monday bringing out plenty of buyers. Any move back in the direction of 2080 and the rising trend could see this pattern replicated, with a push above yesterday’s high around 2105 clearing the way to 2120 and then the all-time highs around 2130.

A close back below the weekly pivot at 2070 would be needed to suggest a new dip, and even then support around 2030, the lows of late March and early April, may well prevent further downside. 

S&P 500 chart

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