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

The new week has kicked off with modest losses for indices, although with the European Central Bank ahead this week and general bearish positioning across markets, it looks like broader momentum is still going to push markets higher. 

Source: Bloomberg

FTSE 100 could see 6320

The index finds itself pushing tentatively above 6200 in the early part of the session. The 6210-6220 area proved to be key resistance, so any close above here puts us on target for the 6320 area that was the high at the end of December.

Above this we look towards 6440. The index remains overstretched on short-term indicators such as the relative strength index, but even after such a strong bounce it looks like more gains are on the way, so it may pay to wait for a bigger dip towards 6000 before going long. 


DAX eyes 200-hour SMA

Essentially, the index has gone nowhere since the second day of March, with gains above 9800 proving difficult to sustain. However, so long as the rising hourly trendline holds it may be unwise to stand in the way of the broader rally.

Ideally a dip towards the 200-hour simple moving average around 9560 would be the preferred playbook for the coming few days, especially ahead of the ECB.

We would have to wait for sustained action below 9400 before switching to a more bearish outlook. 


S&P 500 could see 1958

The failure to push on above 2000 will have seemed very bearish to those fixated on round numbers, but while the rising resistance level continues to prevent upward progress. 

It may be better to wait for a dip back towards the 200-hour SMA (currently 1958), which would also bring the price back to the rising trendline off the February lows for the index.

Market internals, such as the number of companies trading above short-term moving averages, remain at elevated levels, but I would not be surprised to see any dip being furiously bought. 


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