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FTSE 100, Dax, Dow rebound, yet trends point to further downside

Stocks have been regaining ground after recent declines. However, with bearish trends in play, further downside looks likely before long.

FTSE 100 rebound looking like a short-term retracement

The FTSE 100 has started to turn lower following a period of upside that took the price into a zone between the 61.8% and 76.4% retracements of the 7237-7078 sell-off.

Unless we see that 7237 peak overcome, it is likely that we will see another move lower from here, with a break below 7141 key to providing a more bearish outlook for the day.

DAX turning lower after retracement phase

The DAX is similarly showing signs of weakness, following on from yesterday’s rebound. However, this recent rally into the 61.8% Fibonacci level looks like it could be the end of this recovery.

The key here is whether we can see an hourly close below 11,710 or not. Should that occur, we would be looking at a bearish picture for the index for the day ahead.

Dow rebounds into key resistance level

The Dow Jones has managed to regain ground after recent declines, with the price reaching and respecting the late-May low of 24,934 as new resistance.

This looks like a retracement of the sell-off from 25,220, and thus it makes sense to look at this as a selling opportunity unless we break through that 25,220 swing high. As such, the 24,983-25,073 zone looks set to provide us with an interesting round for shorts.

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