Equity Indices Technical Outlook:
- S&P 500 pulling hard off top-side resistance line
- DAX breached December 2019 trend-line
- FTSE 100 wrecked bull-flag breakout
For the intermediate-term fundamental and technical outlook, check out the Q3 Equity Forecast.
S&P 500 pulling hard off top-side resistance line
The S&P 500 was bumping its head up against the top-side trend-line running over from January 2018, a trend-line that also makes up the upper portion of a large, potentially very bearish topping pattern. With that in mind, the turn down was not totally out of the blue.
As we head into next week the market is already becoming a bit downside extended in the short-term, but still not yet at support levels warranting a bounce. The trend-line from December could get tested early next week and may provide a lift. How that lift plays out will be critical as downward momentum currently suggests we could see an extended slide, perhaps down to the 200-day in the not-too-distant future.
Check out the IG Client Sentiment page to find out how changes in positioning in major markets could signal the next price move.
S&P 500 Daily Chart (Dec 2018 t-line)
DAX breached December 2018 trend-line
The DAX failed the December 2018 trend-line on Friday with a gap in sympathy with the prior day’s afternoon session in the U.S. market. This puts in focus the 200-day around 11641 along with the low from June at 11620. This confluence could make for a good spot to see dip-buyers step in and at least induce a bounce.
DAX Daily Chart (below 2018 t-line)
FTSE 100 wrecked bull-flag breakout
The FTSE broke out of a bull-flag on Monday, but quickly reversed the breakout and then some. Strong pressure is coming down on trend-lines from the 2018 high and low. It was a damaging week, but just as is the case with the other indices there is room for a bounce soon if support can hold. Will be on the watch for a bullish response off trend support and whether one can hold if it develops.
FTSE 100 Daily Chart (watch t-lines below)
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---Written by Paul Robinson, Market Analyst
You can follow Paul on Twitter at @PaulRobinsonFX
