FTSE gradually clawing itself higher
Following the bounce from the lower end of the ascending channel we have been watching over the last six months, I have been expecting to see movement higher towards the 7065 mark. We have been seeing gradual upside in the index, but the slow and inconsistent nature of it is a little worrying. It has to try and utilise the bullish momentum while it has it, and as of yet we haven’t seen a particularly substantial move higher.
The selloff seen so far this morning has brought us back into a key support zone, and I expect the bulls to come back in before long considering the convergence of the 50-, 100- and 200-hour simple moving average. With that in mind, I do retain a moderate bullish bias, yet the inability to break higher with any vigor makes a pullback seem more likely.
DAX consolidates following breakout
The ascending channel upside breakout on Monday provides us with a bullish outlook going forward. However, today has seen consolidation reign with price action having been retained within the 11,800-11,882 range for almost 24 hours now. With that in mind, I am awaiting a breakout to gauge direction going forward for the DAX.
My bias is for a move higher, yet I am also aware that we could see a retracement following the strong move up this week so far. Thus a move above 11,882 would bring a bullish outlook, yet any move below 11,800 could see a temporary move lower before the bullish outlook returns.
Dow highs fail to spark expected volatility
My caution in the face of this week’s record highs appears well founded as the spike higher many have been hoping for hasn’t really materialised. This morning has seen price action return to the crucial 18,284 level, which previously represented the all-time high prior to this weeks’ break higher.
As such, given the fact that this was a key resistance level, I will be expecting to see it hold up as support for a move higher. However, should we see price break below 18,284 and in particular, 18,260, then I could see us start to see weakness come back in to the Dow Jones.