Technical forecast for US and Euro Stock markets

FTSE future reached for our next target of 6177/85 falling just a little short at 6172 and then held our first support at 6140.
We are now severely over bought on daily and shorter term charts and this may mean we cannot break 6177/85 resistance again today. A collapse in prices is not expected but we could see some profit taking back to 6140 and then 6120 to cover some shorts. Below here risks another test of this week’s low in the 6110/05 area. We should exit any remaining shorts here and look to buy in to longs down to 6088 with a bounce then expected, possibly a low for the week. Stops on longs needed below 6073.
If we do manage to break through 6190 look for 6232/37 as our next target.

Dax futures held a very narrow range yesterday, leaving the out look unchanged. We have been stuck in a 90 point range since the start of the month. Immediate resistance at 7721/24 then 7750. A break above 7769 should then allow a test of 7795/7805 highs and tough resistance today. Exit any longs and try shorts with a stop and reverse in to longs again above 7815 for 7826 and above here a run to 7896/7906 to take profit on those longs.
Failure to get through 7724/21 could take us to 7701 and if we continue lower look for 7676/70. Below 7660 we could retest the lower end of January’s range at 7640/32 for exiting any shorts. Try longs again with a stop below 7620 for a test of good support at 7603/7593 and an excellent buying opportunity.

Eurostoxx has spent the last 3 weeks stuck in a range from 2675/81 up to 2728/29. Selling in to shorts in the 2726/29 area has been working well in the last few days. We use a tight stop above 2737 today as a break keeps the 7 month bull run alive looking for 2756 then 2763/66 for some profit taking.
Support at 2700/02 held yesterday but below here could see us back at 2681. Again a good chance of a low here today with the risk we hold in a range but longs need a stop below 2675 for 2666 then possibly 2656/51. This is strong support so should offer an excellent buying opportunity. Stops needed below 2640.

S&P topped again at 1491 and held 1484 support. This market is severely over bought which is causing it to struggle to make gains. We are below 1489 resistance now and back with in a 2 week channel. A move below 1484 looks likely for 1479 support. Below here we could test good support at the week’s low of 1475/74. Exit any shorts and buy in to longs with a stop below 1471 as this should lead to an excellent buying opportunity at 1467/66. We expect a bounce but will activate stops below 1460.
Above 1491 keeps the 6 month bull running on towards 1503 for profit taking. A push through here then targets 1511 next. If we continue higher next week look for 1527/20 on the way to 1527.

Dow Jones Industrial Average Future has broken the 2012 high at 13717 but could not hold it with the market so severely over bought. Therefore there is still a high risk of a bearish double top formation. It is too risky to be long now and shorts can have a tight stop above 13740 so this looks like a risk worth taking as there is significant profit potential to the downside with 13500 a realistic target in the weeks to come.
More immediate support seen at 13657 then 13615/610 which could mark the low for today. Any longs here need a stop below 13570 for 13540/30. Very doubtful we fall any further today but there is scope for further losses in to next week.
We have to be ready to stop out of shorts and buy in to longs on a break above 13740 as this targets 13799

Jason Sen began his career in the options pits on the trading floor of LIFFE in 1987 at the age of 19, making markets on his own account. In 2001 when the trading floor closed he successfully made the transition to day trading on computer screens. Jason always had an interest in technical analysis throughout his trading career but began to study this area in depth from 2006. www.daytradeideas.com has established itself as the leading provider of... More