FTSE 100, DAX and S&P 500 all in the red

Indices have continued their downward move this morning, picking up where they left off on Friday.

FTSE 100 fights to hold 50-day SMA

The FTSE 100 has suffered a sharp pullback, losing 9% from last week’s highs. However, it has managed for now to hold at the 50-day simple moving average (SMA) at 5963. A close below this could be viewed as a negative development, suggesting a drop back towards 5720 or down to 5600 and the support zone from early May.

For now this looks like a drawdown within a rising market, after the solid move higher of early May, a move below 5600 would certainly negate that view. Alternatively, if the price can hold 5960 then a recovery above 6100 might suggest that a higher low has been created.

DAX falls to two-week low

Here too the DAX is seeing a severe and rapid drop from the recent highs. Around 1400 points have been wiped off in a week, although this still only leaves the index at two-week lows.

Friday’s bounce to 12,200 met with heavy selling, creating an intraday lower high, reinforcing the short-term bearish outlook. Further declines head towards 11,400 and the upper bound of the March gap down, and then below this we have the 100-day SMA at 11,366 and then the 50-day SMA at 11,112.

S&P 500 retreats further after recent falls

The S&P 500 fell through trendline support in spectacular fashion on Thursday, and a small bounce on Friday failed to gain much traction.

Further declines this morning have taken the index to its lowest level in a month, with further downside targets at 2874 and then 2815. A recovery above 3000 might provide a more near-term bullish view.

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