Levels to watch: FTSE, DAX and Dow

Yesterday’s rally disappeared fairly quickly, with markets rapidly turning south during the afternoon session. Despite some upward moves early on this morning, the overall picture has shifted to a bearish one.

A candlestick chart
Source: Bloomberg

FTSE’s rise fades

Wednesday saw the index fail to push on and close above the late-August high around 6260. As a result, it looks like the sellers have the upper hand, although they will need to breach the rising trendline that has supported the index since the August low, which in this instance means a move back to 6100. Further downward moves would head towards support at 6090 and then 6033. The index needs to move back above 6200 and close above this to restore the more bullish outlook.

DAX recovers lost ground

This index has recovered off its overnight lows, and has recovered some of the ground lost during the course of yesterday afternoon. If it can remain above 10,176 then the outlook seems better, with a move through the daily pivot point at 10,256 particularly important for bulls. Downside targets lie at 9988 and then 9845. Overall, it looks as if this consolidation period in the index has further to run, with only a move above 10,400 putting us back on a completely bullish trajectory.

Dow remains in consolidation pattern

The 16,200 level continues to act as strong support for the index, as was the case overnight. Now the buyers must push us back to 16,480 and close above this level to confirm that they are still in control. Beyond this, targets lie around 16,866 and then 17,036. Sellers will be aiming to push the index back to 16,200 and then aim for a move in the direction of 16,057 and then 15,886. As with the other indices, the index has yet to really break out of its current consolidation pattern.   

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