Levels to watch: FTSE, DAX and Dow

Indices showing strong signs that another big move lower could be imminent, with the FTSE leading the way.

Source: Bloomberg

FTSE showing bearish signs

The FTSE 100 is showing signs of weakness this morning, with the resurgence fading into lower highs and flatlining bottoms at 6209.

This support level is in the process of being broken and a close below 6209 would provide us with a bearish view for the day. For now, price has found support at a descending trendline, which forms the neckline of a head and shoulders formation.

However, should the FTSE manage to break through both trendline support and the 6197 level, then another big leg lower seems likely. Given the break through 6209, the bearish view clearly holds unless price closes back above 6228.

Support levels of note are 6197, 6185 and 6123. 

DAX breaking lower

The DAX is also looking very bearish, with the chart turning over to form lower highs and lows. This morning has seen a break back down to the next support level of 10,805 and a close below this level could lead to further losses.

Unlike the FTSE, the DAX has some way to go to reach last week’s low of 10,630, yet a close below 10,805 would show that the selling is not over, with the next support levels of 10,726 and 10,630.

We would need an hourly close above 10,900 to negate the bearish view.

Dow turning lower

The Dow Jones is also setting now lows this morning, with price temporarily moving below the 17,671 support level overnight.

However, we have not seen price truly break through a significant support level, at 17,637. Given the bearish outlook of European markets, a selloff through 17,637 would seem likely, yet there is clearly more tentative selling given that these are pre-market prices.

As such, a bearish view holds, unless we see an hourly close back above 17,728. Near-term support levels of note are 17,655, 17,637 and 17,608, with resistance at 17,728 and 17,776.

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.