Levels to watch: FTSE 100, DAX and Dow
The declines continue for equity markets, with yesterday’s intraday rallies merely setting up lower highs in the current broad-based pullback.
FTSE 100 bears remain in control
Yesterday’s bounce petered out around 7280 for the FTSE 100, and the price is now heading back to the 7215 zone that marked the low of the week so far.
There is as yet no sign of a higher low being in place, with further declines heading towards 7140 and then 7070. The beginnings of a rebound require a move back above 7280 and then the creation of a new higher low intraday.
DAX still under pressure
Here too the rally from the low of the week on Tuesday merely set the DAX up for more declines.
Lower highs remain firmly in place, and rallies will continue to be sold until the index pushes back above 12,200 and creates a higher high. The next area of possible support is 11,800.
Dow stumbles to six-week low
The expected retracement has finally arrived for the Dow Jones, with lower highs and lower lows created on the hourly chart over the past few days.
A recovery above 26,100 would help to restore a measure of optimism, but further declines below 25,800 would reinforce the bearish view, targeting the 25,364 area.
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