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Levels to watch: FTSE 100, DAX and Dow

The rout across Europe broadened yesterday, and has continued this morning. Even US markets are under some pressure.

FTSE 100 clocks up fresh four-month low

The FTSE 100 fell to its lowest level in over four months yesterday, as the decline across European markets continued.

The next area of support is 7340, and then below this 7280 comes into play. A recovery above 7490 is needed to suggest near-term bullish pressure. Just 13% of the index is above its 20-day moving average, a reflection of the heavy losses of late, but when this reading gets to such a low point a near-term rebound is often at hand.

DAX dives through support

The downtrend goes on, and with the close below 12,100 yesterday, the DAX is now rapidly on its way to 11,700.

A close above 12,100 is needed to suggest a possible rebound. Vital support is 11,700, having held fast in the first quarter (Q1), and a loss of this level would be deeply bearish. As with the FTSE 100, breadth is very weak, so watch for any signs of a rebound.

Dow declines modestly

The Dow Jones bounced off the 28,820 area yesterday, as it did on Tuesday.

A close below this would ignite a deeper retracement, potentially towards the 50-day simple moving average (SMA) at 25,327 and then the 25,300 area. However, we would need to see a move below 24,980 to break through the previous higher low.

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