Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 71% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work, and whether you can afford to take the high risk of losing your money.
Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 71% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work, and whether you can afford to take the high risk of losing your money.

Levels to watch: FTSE 100, DAX and S&P 500

The Friday rally has given way to some losses, as geopolitics intervenes. This could be a resumption of the downtrend for the DAX, while the S&P 500 is at a crucial point.

Chris Beauchamp ChrisB_IG
Chief Market Analyst, London

Publication date : 2017-09-04T09:21:27+0100

Data trader

Source: Bloomberg

FTSE 100 needs to close above 7450 to avoid a bearish development

Having gapped lower overnight, and having fallen back below 7450, it may be that a new selling opportunity presents itself on the FTSE 100.

While on the daily chart the upward move remains intact, and already buyers have stepped in this morning, a failure to post a daily close above 7450, as we saw on Friday, would be a bearish development. Today could prove to be a crucial moment. Further downside momentum would head towards 7300, and then we would see if this zone of support can hold once more.

FTSE 100 chart

FTSE 100 chart

FTSE 100 chart

DAX remains in downtrend

The downtrend continues on the DAX, having created a new lower high on Friday with the rally to 12,180, and then gapped lower overnight. While the price is off the lows, as long as it holds below 12,180 the downside would appear to hold sway.

Given the ongoing downtrend, the next event to watch for would be the 11,900 lows seen during the previous week. A daily close above 12,180 would reverse the outlook in the shorter term, and build the case for a potential reversal in this index, and likely other eurozone indices as well.

DAX chart

DAX chart

DAX chart

S&P 500 euphoria over, but not all Friday gains lost

Friday’s euphoria in the S&P 500 looks a little dented, but the gap down does not negate the bounce entirely. The move back below 2475 is a potentially negative development, but we will have to wait until the return of US investors tomorrow to see if the bargain hunters will come back in.

Further losses below 2460, which has been strong intraday support, could signal a move below 2450 and then down to 2420. A recovery would need a close above 2480, to leave the way clear for another attempt at 2480 and then 2490.

S&P 500 chart

S&P 500 chart

S&P 500 chart

This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.

Find articles by writer

Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 71% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work, and whether you can afford to take the high risk of losing your money. Professional clients can lose more than they deposit. All trading involves risk.

The value of shares, ETFs and ETCs bought through a share dealing account, a stocks and shares ISA or a SIPP can fall as well as rise, which could mean getting back less than you originally put in. Past performance is no guarantee of future results.

CFD accounts provided by IG Markets Ltd, spread betting provided by IG Index Ltd and share dealing and stocks and shares ISA accounts provided by IG Trading and Investments Ltd. IG is a trading name of IG Markets Ltd (a company registered in England and Wales under number 04008957), IG Index Ltd (a company registered in England and Wales under number 01190902) and IG Trading and Investments Ltd (a company registered in England and Wales under number 11628764). Registered address at Cannon Bridge House, 25 Dowgate Hill, London EC4R 2YA. IG Markets Ltd (Register number 195355), IG Index Ltd (Register number 114059) and IG Trading and Investments Ltd (Register number 944492) are authorised and regulated by the Financial Conduct Authority.

The information on this site is not directed at residents of the United States, Belgium or any particular country outside the UK and is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.