Levels to watch: FTSE, DAX and Dow

Markets have lost what little bullish momentum they had yesterday, and it looks like the weakness seen at the beginning of May has returned.

Data board
Source: Bloomberg

FTSE 100 looks to turn lower
The bullish trend may be holding on for the index, just, but it looks under pressure. A close below 6100 would likely indicate that the brief rally has ended and that the next move is down.

Gains have been capped by the 200-day simple moving average (SMA), 6175, while 6100 acts as support, so we wait to see which of these levels breaks first. A move down would head towards 6040 and then 5927, while a rally would push in the direction of 6280 and then 6400.

DAX puts sellers in control
What could have been a buying opportunity this morning seems to have turned into a bull trap, as the index moves below 9900. Having opened below the 50-day SMA (9950) it looks like the sellers are back in control, so we look towards 9725 and then 9520, while the price would need to push on above 10,144 to indicate that bullish momentum has revived.

Dow gives bears the initiative
The sharp reversal for the index last night seems to have handed the initiative back to the bears, although the lows of the week are holding, and even more importantly, the 50-day SMA (17,627) is still to be broken.

A close below this indicator would, in all probability, suggest that we are headed down towards 17,500 and then towards the 200-day SMA at 17,096. Any rally must clear the week’s highs above 17,900, which would then suggest a move back to the April highs around 18,170 is in order.

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