Levels to watch: FTSE, DAX and Dow

Indices begin to show signs of turning following period of strong upside.

A man with data reflected in his glasses
Source: Bloomberg

FTSE rounding off as we await confirmation of retracement or consolidation

The FTSE has traded largely sideways over the past two trading days. However, the failure to create a new high above the 6808 resistance level is a warning sign that we could be seeing the beginning of a retracement lower. We have not seen the new low to confirm that, and thus I would be bearish over the short term should the price move below 6750. However, this could simply be a period of sideways consolidation and a move above the 6808 level would bring a renewed bullish outlook. 

DAX failure to create new high brings possible retracement

A similar story for the DAX, with today’s price action showing a new lower high. This failure to push above the 11,800 resistance, which was Thursday’s high, signals the possibility of a move lower in the coming days. I would need to see a move below 11,650 and 11,600 to gain confidence that we are going to see a move back towards the 11,448 and 11,344 region.

Dow also showing signs of turning despite early strength

The Dow Jones is also in the process of creating a new lower high, below Thursday’s 18,154 peak. I would need to see a move above that resistance point to give me confidence that we will continue to move higher. Otherwise the writing could be on the wall for a period of downside back towards 17,914. However, for this bearish view to be confirmed, I would need to see a move below the 18,030 and 18,010 support levels.

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