Levels to watch: FTSE, DAX and Dow

Non-farm payrolls day is upon us once again, with indices modestly lower. 

Trader analysing chart
Source: Bloomberg

US markets took a battering last night, with the Dow Jones finally managing a solid break below 18,000. However, US futures are looking more positive, while eurozone indices are off their lows despite Greece’s dodging of an International Monetary Fund payment due this morning.

FTSE hangs in the balance
Having fallen through its trendline earlier in the week, the FTSE 100 retains its bearish outlook. Back in early May 6800 stemmed the selling and so this area may provide support, as it has done over the past 24 hours.

However at that point in May the December uptrend was still intact so we may see a continuation of this downward move, towards 6700. That said, if the index can clear 6850 this scenario will be reversed.

DAX continues to favour sellers
The index fell below the rising October trendline this morning, and so far attempts to push back above it have failed. This week has seen the biggest weekly loss since April, with the Greek crisis and gyrations in Bunds making life very difficult for bulls.

If 11,200 breaks then further losses look highly likely, with a target of 11,130 and then 11,000 itself. Barring a post-NFP rally that changes the outlook and takes us back above 11,300, it looks like this is still a ‘sell the rally’ market.

Shorting the Dow Jones still the preference
Futures have moved higher so far this morning, but the index is still looking weak. As with the DAX, the Dow Jones still seems to be a market to sell on strength, using the hourly chart to pinpoint entries one way to play this.

If the index can head back above 18,000 today I would still look to short it, with a target in the direction of the early May lows around 17,700.

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