Levels to watch: FTSE, DAX and S&P 500

Sellers are running rampant across markets this morning, with last week’s brief rally a distant memory.

Data on screen
Source: Bloomberg

FTSE 100 eyes 7250

The bulls need to step up here, or we could see the start of a bigger move to the downside. 7130 is the critical level that buyers need to defend as a move below here opens the way to 7095 and 7060, and then down to 6914.

Risk appetite appears to be fading, so the downside scenario looks to be the most likely. A close above 7130 would open the way to 7170, 7211 and then 7250.

DAX could test 11,000

After spiking higher last week momentum appears to have dried up here. Prices gapped lower overnight, with no sign so far that buyers are returning to get the price back above 11,800, a necessary first step.

The 11,582 mark and then 11,352 are the first areas to watch. A bigger drop could see 11,200 and then 11,000 tested, with the latter marking an area where the uptrend off the June lows comes into play.

S&P 500 could drop to 2237

US markets look no better, having gapped lower on the futures markets overnight. The retreat from 2300 goes on here, with 2265 and then 2237 the next areas to watch.

After a sudden surge, it looks as if the sellers are back in charge once again. Only a close back above 2295 would reverse the negative outlook here for the index

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