Levels to watch: FTSE, DAX and Dow

Indices weakness has the potential to continue, yet given recent gains it will take a lot to negate the primary uptrend.

Source: Bloomberg

FTSE retracing recent gains

The FTSE 100 has moved lower into trendline support this morning, following on from a failure to regain the 7205 mark. The key to further losses is a break below the 7160 level. Given the importance of the previous 7127 all-time high, a break below 7160 could set us up for a nice bullish pullback into the 7141-7146 region.

The uptrend remains intact for now and any retracement is seen as such (not a reversal). We would need to break below 7121 to negate this bullish view.

FTSE

DAX falling back after sharp rally

The DAX is similarly weakening in the wake of a sharp appreciation at the beginning of the week. The inability to break above 11,646 provides us with a signal that there could be some downside to come. Should we see the price post an hourly close below 11,553, then this would point towards a retracement of the 2017 gains. In this case the 11,459 and 11,475 levels would be key for a great bullish entry. 

Whether we reach that level or not remains to be seen, but unless we break below 11,401, a bullish outlook remains. However, in the short term, the ability to remain above 11,553 is key to whether we will see further downside this week.

DAX

Dow running into resistance after mixed messages

The Dow Jones has been posting rather mixed messages, with yesterday’s fall back below 19,816 providing a new lower low to negate the recent recovery. We have seen the index rally into the 70% retracement, with price currently consolidating.

Given yesterday’s fall below 19,816, there is reason to believe we could see some weakness come to the fore. The stochastic has been relatively consistent of late and with that indicator in overbought territory, a bearish cross could help provide us with a bearish signal.

However, for now there are mixed messages for this index meaning we would need to see an hourly close below 19,851 to point towards further short-term losses, or above 19,938 to resume the recent recovery. 

Dow Jones



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