FTSE 100 comes off record high, DAX 40 and Nasdaq 100 look toppish

​​​FTSE 100 comes off new all-time record high ​

​On Thursday the FTSE 100 reached a new record high close to the 8,500 mark before consolidating. ​

On Friday morning UK retail sales beat a forecast 0.3% decline by coming in at 0.5% month-on-month in January, versus an upwardly revised 1.2% drop in December, but despite this the FTSE 100 remained on track for a weaker open. ​

Since triple negative divergence can still be spotted on the daily RSI and since a wedge continues to be formed on the daily chart, the risk of a reversal lower soon taking place remains high. ​

Possible downside targets are the January-to-February uptrend line at 7,938, followed by Wednesday’s low at 7,921 and the 7,876 January peak.

Only a fall through and daily chart close below the 10 February 7,850 low would have medium-term bearish implications with the late January low at 7,708 then being eyed.

​Minor resistance now sits at Wednesday’s high at 8,023 and more significant resistance in the 8,044 to 8,050 zone.

​DAX 40 may be topping out

​Thursday’s rally in the DAX 40 to 15,634 was followed by a sell-off to this year’s uptrend line at 15,429 on the back of stronger-than-expected US producer prices and employment data releases.

​The US producer price index (PPI) increased 0.7% month-on-month in January, the most in seven months and by significantly more than the forecast 0.4% which is likely to reinforce the US Federal Reserve’s (Fed) hawkish stance, together with weekly jobless claims which unexpectedly fell last week. ​

What is interesting from a technical perspective is that the past three days’ highs were made along the previously breached January-to-February uptrend line which, because of inverse polarity, now acts as a resistance line. ​Since negative divergence on the daily Relative Strength Index (RSI) remains to be seen, a short-term negative bias remains in place for the DAX 40 as long as it trades below last week’s high at 15,656 on a daily chart closing basis. ​

A fall through Thursday’s low at 15,412 would push the 15,272 to 15,245 January high and the 6 to 13 February lows back to the fore. Failure there on a daily chart closing basis could lead to the more significant 14,992 to 14,904 mid-to-late January lows being targeted. ​

Only a currently unexpected rise above Thursday’s high at 15,634 may lead to the current February peak at 15,656 being overcome with the 16,000 zone then being in sight.

​Nasdaq 100 forms a bearish reversal pattern ​

This week’s rise in the Nasdaq 100 came to an abrupt halt on stronger-than-expected US producer price inflation and weekly employment data and as several Fed committee members made hawkish comments. ​

Both the St. Louis Fed President James Bullard and Cleveland Fed President Loretta Mester said they would not rule out backing a half-percentage point increase at the Fed’s March meeting, putting pressure on US and global equity indices. ​

With the 2023 uptrend line at 12,452 having been slipped through on Thursday when the Nasdaq 100 daily chart showed a bearish engulfing candle, the odds favour further weakness taking the index to last week’s low at 12,203, a fall through which would lead to the November peak at 12,084 and the 200-day simple moving average (SMA) at 11,894 being back in sight.

​Resistance above the breached two-month support line at 12,452 sits at this week’s high at 12,747 which would need to be exceeded for the September and early February highs at 12,896 to 12,902 to be back in focus.