FTSE 100, DAX and Dow all in full sell-off mode

Indices are in full retreat, having endured one of their worst weeks in market history.

FTSE 100 completes round trip to 2018 lows

The FTSE 100 has, in the space of a week, given back all the gains since December 2018. Below this, 6070 and then 5880 become the major levels to watch.

The market’s downside momentum has taken on a life of its own, and as a result the real clue to direction will come from how it deals with further intraday rallies. For the index, the bounces tend to last just a few hours, and so far this week moves towards the 50-hour simple moving average (SMA) at 6832 head into resistance. If this continues then we can expect the market to create another lower high and then retest the low at 6536.

DAX back below 12,000

For the DAX it is only, so far, a pullback to levels last seen at the end of last August. But the direction of travel intraday is still clear – short-term bounces creating lower highs.

Any rally towards 12,400 would need to then break above 12,600 to avoid creating another lower high. Having rallied yesterday from the late September low at 11,820, the price will need to break this to target 11,700 and then the August lows around 11,390.

Dow slumps to six-month low

The correction has been swift and unrelenting for the Dow Jones, with small bounces being met with waves of selling.

For now the price has stabilised above 25,154, but a bounce towards the 50-hour SMA at 26,465 might as easily bring out the sellers once again, as we saw on Wednesday and Thursday. Below 25,154, the price heads to 24,632, the low from the end of May 2019.

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