Levels to watch: FTSE 100, DAX and S&P 500
After a resolutely bullish end to last week, indices look in good shape, although the downtrends from the last few months of 2018 remain in place.
FTSE 100 drops sharply in early trading
Since 26 December, the FTSE 100 has gained solidly - up almost 5% from that month's lows. Having leapt higher on Friday, it is not surprising to see some early weakness this morning.
However, the trend from the lows of December is still up, and a pullback towards 6750 may see fresh buyers emerge. The first target is 6920, with the 50-day simple moving average (SMA) at 6914 also worth watching given how it marked significant resistance at the beginning of December. A breakout above these would open the way to trendline resistance from the August highs, around 7060, and horizontal resistance at 7127. A move back below 6680 is needed to reverse the short-term bullish picture.
![FTSE 100 chart](http://a.c-dn.net/c/content/dam/publicsites/igcom/uk/images/ContentImage/FTSE 070119.png/jcr:content/renditions/original-size.webp)
DAX rallies, but for how long?
Despite the 600-point gain from the lows, the longer-term downtrend for the DAX remains in place. A new lower low was created at the end of December, so for the moment any bounce may be short-lived.
Nonetheless, for the time being, the buyers are in control and a pullback from the Friday highs remains a possible buying opportunity. Upside targets lie at 11,000, which marked support in October and November and then resistance in early December, and then the 50-day SMA at 11,073, which saw significant resistance in early December. A move back below 10,400 would suggest that the downward move has resumed.
![DAX chart](http://a.c-dn.net/c/content/dam/publicsites/igcom/uk/images/ContentImage/Dax 070119.png/jcr:content/renditions/original-size.webp)
S&P 500 tops 2520
US markets, including the S&P 500, recovered from the mid-week sell-off on Friday, helped along by comments from the Federal Reserve (Fed) chair Jerome Powell.
The index has managed to clear the 2520 highs of last week, and now targets the 2610 area of support that held in October and November before being broken in mid-December. The 50-day SMA at 2639 also comes into the frame at this point. Above here, trendline resistance from the all-time high would be seen around 2700. Trendline support from the December low comes into play around 2480.
![S&P 500 chart](http://a.c-dn.net/c/content/dam/publicsites/igcom/uk/images/ContentImage/SPX 070119.png/jcr:content/renditions/original-size.webp)
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