VIX, SP500, DAX40 and FTSE100 price forecasts 15 June
Volatility could be nearing a turning point, while the SP500 and DAX40 test highs and the FTSE100 consolidates further.
Volatility Index (VIX) at multi year lows
The Volatility Index (VIX) now trades to its lowest levels since February 2020, a level just before the covid pandemic induced fear in the general marketplace.
Volatility is however considered cyclical in nature and the above chart shows the index to be moving towards cyclical lows on a weekly timeframe.
Traders of the index might wait for a bullish price reversal at current (16) or closer to the 14 level before looking for long entry. In this scenario a move back towards at least the 18.30 level may be targeted while using a close below the reversal low of 14 level as a stop loss indication for the trade.
SP500 price blowoff?
The SP500 (US 500) has now produced a series of three steepening (dotted) trend lines on the chart above. This phenomenon is called a price blowoff in technical analysis terms. A price blow off is the suggestion that the current rate of gains might not be sustainable and in turn a price correction, in the form of a pullback or sideways market move could be nearing. The index is also trading deep within overbought territory as well.
The long-term trend is however still considered up, and so traders in respect of this might prefer to wait for a short-term correction to play out, before looking for long entry into the index. Long entry might be considered on a pullback towards either the 4300 or 4175 support levels, accompanied by a bullish price reversal to end the move lower.
DAX40 testing all-time highs
The long-term trend for the DAX40 (Germany 40) remains up. In the short term the price is also now testing resistance of the all-time high. In turn a long bias to trades on the index remains favoured. Long entry might be considered on a pullback from overbought territory towards trend line or horizontal support at 15715, which ends with a bullish price reversal (candlestick formation). Alternatively aggressive traders might also consider long entry on a break of all-time high resistance. Our preference for long entry is in the pullback scenario, or alternatively, in the event of a breakout waiting for the first pullback from that move.
The Ftse100 continues to grind sideways in both the short term and long term. The sideways nature of the index at present suggests trading between levels or waiting for confirmed breaks of support and resistance levels.
A close below 7560 would consider a near term downside break with 7410 the initial support target from the move.
Traders looking for a bullish momentum to be confirmed, might instead prefer to see a close above at least the dotted trend line and 7650 resistance levels on the chart above. Because the 7700 level provides another close proximity resistance level, our preference would be to see a break above this level as well before targeting a move towards 7870.
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