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

Indices are tumbling this morning, as downtrends for the FTSE 100 and DAX reassert themselves once again.

German stock exchange
Source: Bloomberg

FTSE 100 – can it break the 7300 area?

An outbreak of risk-off sentiment has seen the FTSE 100 falter at the June downtrend and at the 50-day simple moving average (SMA) at 7419.

With 7360 lost once more, we will see whether the index can break the 7300 area, which would open the way to the 200-day SMA at 7266. Below this a move to 7090, not seen since late April, comes into play. We need to see a recovery of 7400 to become more optimistic about the outlook.

DAX heading back to the June downtrend

It looks like the downtrend from June has reasserted itself on the DAX, with a failure to push above 12,300. Now we look to see if the 200-day SMA (11,993) can provide support as it did last week, or whether we are about to see a drop to 11,893 and lower.

The index needs a daily close above 12,310 to secure a bullish outlook.

S&P 500 could bounce to 2450

Last week’s low has been broken on the S&P 500, so now the 100-day SMA at 2417 comes into play, and below this, 2400 and 2370.

A bounce to 2450 cannot be ruled out, given the intraday oversold conditions, but a bounce and then a failure to push higher could provide a more attractive risk-reward option for bears.

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