We are rapidly heading towards a possible endgame in Greece. Even the International Monetary Fund is making noises about the possibility of a Greek exit from the eurozone, and the result has been sharp losses in equity markets so far this morning.
FTSE struggles to make meaningful gains
Yesterday we saw dips towards 7000 but these were rapidly bought, with 7020 emerging as support. A similar pattern is being displayed so far today, with the 50-hour simple moving average, 7026, providing an entry point as well. Three days of trying have seen the FTSE 100 unable to make much headway beyond 7040, and a weak close today would suggest we are in for another trip towards the rising December trendline, raising the possibility of support around 6970.
The ascending triangle formation highlighted earlier in the week remains in effect, deterring many from taking a position until the situation resolves itself one way or the other. A move through the December trendline would target 6940, and then on to 6900 itself.
DAX dips back to 11,600
A swift dip this morning has taken the DAX back to 11,600, the key short-term support line of the past week. With Greek headlines going back and forth we could see this line hold into the end of the day. That said, a firm move below it would raise the prospect of a move back towards 11,300/11,400. The DAX has so far been unable to muster the strength needed to bounce back to 11,900, so as long as 11,600 holds we remain within an ongoing consolidation period.
Dow Jones looks to favour the bears
Overnight the bulls attempted to get the index moving higher, but once again the 18,150 area defeated them. Now we have seen tentative dips below 18,100, as was the case yesterday, and with hourly stochastics bearish once again we could see a test of Tuesday’s low around 18,000.
A move beyond 18,200 would negate this outlook, but overall the picture still looks bearish, particularly on a daily chart. This descent has been slow in getting underway but it risks turning into something more substantial if the index cannot hold 18,100.