Levels to watch: FTSE, DAX and Dow

Indices begin to show signs of turning following period of strong upside.

A man with data reflected in his glasses
Source: Bloomberg

FTSE rounding off as we await confirmation of retracement or consolidation

The FTSE has traded largely sideways over the past two trading days. However, the failure to create a new high above the 6808 resistance level is a warning sign that we could be seeing the beginning of a retracement lower. We have not seen the new low to confirm that, and thus I would be bearish over the short term should the price move below 6750. However, this could simply be a period of sideways consolidation and a move above the 6808 level would bring a renewed bullish outlook. 

DAX failure to create new high brings possible retracement

A similar story for the DAX, with today’s price action showing a new lower high. This failure to push above the 11,800 resistance, which was Thursday’s high, signals the possibility of a move lower in the coming days. I would need to see a move below 11,650 and 11,600 to gain confidence that we are going to see a move back towards the 11,448 and 11,344 region.

Dow also showing signs of turning despite early strength

The Dow Jones is also in the process of creating a new lower high, below Thursday’s 18,154 peak. I would need to see a move above that resistance point to give me confidence that we will continue to move higher. Otherwise the writing could be on the wall for a period of downside back towards 17,914. However, for this bearish view to be confirmed, I would need to see a move below the 18,030 and 18,010 support levels.

IGA, may distribute information/research produced by its respective foreign marketing partners within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.

This information/research prepared by IGA or IGA Group is intended for general circulation. It does not take into account the specific investment objectives, financial situation or particular needs of any particular person. You should take into account your specific investment objectives, financial situation or particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. In addition to the disclaimer above, the information does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. Any views and opinions expressed may be changed without an update.

See important Research Disclaimer.