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Global Equity Market Meltdown - FTSE, DAX Crash Into Bear Market Territory

Global Equity Market Meltdown - FTSE, DAX Crash Into Bear Market Territory

2020-03-09 09:00:00
Nick Cawley, Analyst
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FTSE 100, DAX 30 Prices, Charts and Analysis:

  • Massive risk-off move hammers indices 10% lower.
  • Huge risk-off move roils equity markets.

FTSE 100, DAX 30 Crash to Multi-Year Lows

The FTSE 100 is in freefall and back at lows last seen in June 2016, as the UK index enters bear market territory. The massive global risk-off move, originally sparked by the coronavirus epidemic, was given an additional shove by wild moves in the oil market. After OPEC failed to reach a production cut agreement on Friday, Saudi Arabia said that it would open its taps further, increasing output, slamming the price of crude lower by over 26%. Most European equity markets are in bear market territory – off 20% from their highs – and there seems little reason to buy into them, even at these levels, as moves remain highly volatile and erratic.

The weekly FTSE 100 chart shows the massive opening gap between 6,245 and 6,400 which will need to be filled at some stage. The FTSE is now at June 2016 Brexit lows and over 25% off its May 2018 high. The market looks extremely oversold – using CCI – but there is little support on the chart.

FTSE 100 Weekly Price Chart (November 2014 – March 9, 2020)

FTSE 100 price plunges

DAX 30 Crumbles at the Open

The German big board has also entered a bear market territory after losing around 3,400 points since February 17. Again, the weekly chart looks like it has completely broken down, slumping through old horizontal support levels and all three moving averages. The market is flashing an extreme oversold signal, while the ATR shows index volatility at the highest level since late 2015.

DAX 30 Weekly Price Chart (January 2015 – March 9, 2020)

German DAX 30 price plunges
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Traders may be interested in two of our trading guides – Traits of Successful Traders and Top Trading Lessons – while technical analysts are likely to be interested in our latest Elliott Wave Guide.

What is your view on Sterling (GBP) and the FTSE 100 – bullish or bearish?? You can let us know via the form at the end of this piece or you can contact the author via Twitter @nickcawley1.

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