FTSE future halted 5 weeks of gains after we warned that the weekly stochastic is severely overbought and the daily stochastic turning negative. The break and close below Friday’s low at 6244/41 is negative for today.
Even after such heavy losses there is no indication that we can bounce. 6215 is resistance and we are struggling to get back above here today. We look likely to fall further with 6179 our first target but there is scope for a move as far as 6150/45. This however is very good support for today and so a low for the correction could be expected here. Longs will need a stop below 6130 for a test of 6095. If we do not bounce from here then 6041/35 could be the next downside target.
If we do manage to hold above 6215 look for 6225. If we can push through here we should see 6243 but maybe no further. We have resistance above at 6255/59 then 6274 looks like a good chance to try shorts.
Dax futures warned of a break lower with the weekly stochastic severely over bought and the daily stochastic showing a bearish divergence. We spectacularly smashed through our lower support of 7730 to reach 7602, breaking Jan lows at 7633, as well as the low of the last day of Dec at 7611. We have lost 3.6% in 2 days.
However we could fall further today. A break of 7600 should keep us under pressure for 7565/60 where it may be worth exiting at least some shorts with better support at 7528 and it could be worth attempting longs down here as we look for a low for the day and possibly for the week. However if we are unable to bounce from here the next target is 7450/40 presenting a very good buying opportunity with a strong bounce likely.
If we do crawl higher look for 7661 with resistance here and at 7699 above. Good chance of a high but above here 7729, possibly 7759 can be achieved.
EuroStoxx provided a strong a bearish warning at the close of last week. We predicted a sell off this week and we got it in spectacular style as we broke our lower support of 2628 reaching 2610. Even after losses of 5.6% in the past 5 sessions there is still room on the downside today.
The only hope for a low here is the 200 week moving average at 2605 so 2610/05 is our first support today. However we could break lower for 2589/83 which is much better support and here it should be wise to exit any shorts. We could see a low for the week so we can try longs with a wide stop below 2545.
A good rally today look unlikely but we have resistance at 2644 with a push through here able to test 2665. We could top out here but above here look for 2682. If we continue higher 299 should present a good selling opportunity.
S&P took a tumble to our lower support of 1491 and bottomed out. We could well be building a short term topping pattern here with any rally today likely only to reach the 1500/1503 area. We can try selling in to shorts here with a stop above 1506 for a retest of 1510 highs.
If we are unable to hold above 1495 we could see another test of 1491 support. A break should target 1485 then better support at 1481/79 which could hold the low today. However a break of 1478 may signal further losses with 1470 offering strong support and a buying opportunity this week as it is very unlikely we will fall any further.
Dow Jones Industrial Average Future looks like it is building a topping pattern which will eventually target
13650. Today we face resistance at 13865 but above here look for 13902. Here we could expect a high for the
day so should be worth exiting any longs and selling to shorts with a stop above 13940.
Support seen at 13842 but below here risks a retest of 13820/800 lows. If we break below here we could see
13745 and possibly 13678 support tested.