FTSE edging lower as we build a topping pattern and we do stick with the view that sooner or later this market should break to the downside. A close below 5300 will confirm.
We are below the 9 week moving average now at 5376 which is a significant level. Yesterday’s low at 5337 ties in with the 55 day moving average. Failure here today would then allow a test of the November lows in the 5332/12 band. A close below 5300 would confirm a greater move to the downside towards 5266 and then 5239/35 before 5216 but a break below 5190 sees 5126 and then 5053 targeted.
Resistance at 5390 and then 5423 and if we make it any higher today look for a good selling opportunity at 5454/50.
DAX:
Dax drifting towards the lower end of the recent range as we build a topping pattern and we do stick with the view that sooner or later this market should break to the downside. A close below 5800 will confirm.
Initial support seen today at the 9 week moving average at 5835. Failure here keeps the pressure to the downside for a test of 5817/08 and then this week’s lows at 5772/60. Failure here today sees the market heading for 5733 and then a test of the 55 day moving average at 5707 before November lows at 5666. A break below good support at 5636/34 targets 5618 but we could see very sharp losses to 5548/37.
Resistance seen at 5848 and then at 5903/07 but above here look for 5929 and then a good selling opportunity at 5943/47.
Eurostoxx:
Eurostoxx breaking out to the downside now as expected. We have closed below the 9 week moving average for the first time since September. We have not closed below the 55 day moving average since early Oct so watch this level today at 2223.
Below 2223/22 today we can test yesterday’s lows at 2205/00. A break below last week’s low at 2189 should trigger further losses towards 2152/47. This is good Fibonacci support and so could hold the downside today. Stops on longs any longs instated here however needed below 2135 for 2105. Go with a break below 2100 as this keeps the pressure to the downside for 2083 on the way to 2065/60. If this fails we test Oct lows at 2045. THIS IS OUR FIRST MAJOR TARGET FOR THIS MOVE BUT A TEST OF 1924 IS VERY POSSIBLE.
Resistance seen at 2234/36 but above 2240 we could stretch to 2255/57. If this does not hold us back look for a selling opportunity at 2268/73 today with stops on shorts here needed above 2280 for a run to 2290. Try shorts here again.