FTSE 100, DAX and S&P 500 all rise from Tuesday’s low

Indices have recovered some ground after yesterday’s weakness but are at risk of further declines.

FTSE 100 downtrend gathers pace

The FTSE 100 has a lower high in place from the beginning of the week but, while it dropped yesterday, it did not go near the low from last week around 5550.

The index is bouncing in early trading, but unless it can break trendline resistance from the 14 April high then the bearish view remains in place. Certainly, a lower high below 5800 would add to the negative outlook for the index in the short term. Alternatively, a push through 5800 breaks trendline resistance, but a move through 5850 is needed to provide a more bullish view.

DAX now in trading range

The DAX sell-off stalled above 10,200, yesterday, a similar result to last week’s drop. Then the index bounced back to 10,800, so we will see if it repeats this feat.

With two attempts to break 10,800 and two drops to 10,200, we now have a trading range in place. A break above 10,800 brings the March gap down around 11,200 into view, while a drop below 10,200 signals more weakness in the direction of 9995 and then potentially 9400.

S&P 500 rallies from Tuesday’s low

The S&P 500 weakness saw it fall to 2720, moving below the 2760 area that marked the low last week. thus, a lower low is in place.

If the index cannot recover 2820 today, it risks creating a lower high, confirming the short-term bearish view. Below 2720, the price targets 2630, eating into the gains from the first half of the month.

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