FTSE 100, DAX and S&P 500 all come under heavy selling pressure
More tariff wars and dire economic data have driven equities into retreat in recent sessions, reversing some of the recent gains.
FTSE 100 reverses towards August lows
In just two days the FTSE 100 has reversed almost all the gains made in August and September. This provides a more bearish view in the medium-term, and could see a push back to the August low at 7000, with the February-July support zone at 7080 likely to be tested today. Below 7000, the index heads towards 6730 and 6530.
A recovery above 7200 might help to revive some of the bullish view, but a failure to move above here would mark another possible selling opportunity.
DAX gives up half of August’s gains
A 5% drop in the DAX over the past two sessions has seen half the August and September rally erased. A rebound could find resistance at 12,032 and 12,165, but any lower high today or tomorrow could result in a fresh selling opportunity. Further declines below 11,900 take the index on to 11,700 and then 11,400.
If, however, the index can form a higher low in coming days then strong seasonality beckons for the rest of the year, which may invigorate the upward move.
S&P 500 breaks rising trend support
For the S&P 500, a break below rising trendline support from the August low sends a negative message, and a short-term rebound towards 2920 may provide a fresh selling opportunity. Further declines head to 2870 and then the 200-day moving average (MA), currently 2836.
As with the DAX, however, a possible higher low in upcoming sessions would then benefit from strong end of year seasonality.
This information has been prepared by IG, a trading name of IG Australia Pty Ltd. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.
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