Key points of discussion:
- The withdrawal of global equities continues despite the federal Fed
- DAX 30 takes momentum to break out of the triangle pattern
- FTSE 100 risks fall below 7,000 as it tests basic support
It has been a bit of a week for the stocks so far, as falling commodity prices and bruises dominate the market. With the income season in the background, investors are likely to think about how long stock prices will be able to stay at current levels, given how they work with large regimes that are likely to be unsustainable as wages rise. Sustained high inflation also remains a concern, as central banks around the world become more lenient about what the cap should be.
The Asian session started strongly Hang Seng-led losses, which have fallen by more than 3% to eightth Loss date between the last 9 trading sessions. The steps so far appear to be a corrective setback, given that US equities were at an all-time high again yesterday after the Federal Reserve confirmed its downturn, saying that conditions for significant further development of this the targets for full employment and price stability to reduce monthly asset purchases have not been met.
This is the Red Sean Europe this morning, as all major indices fall more than 1.2% at the time of writing, with the Italian FTSE Mib taking the biggest hit, which has fallen by about 2.2% so far. Most of the major companies have destroyed yesterday’s profits, and this appears to be a situation where individual risks are being weighed, with poor economic data at the forefront, rising prices and a resurgence of Covid cases.
The overall decline in bond yields is at a record high for indices, but after several months of extreme assessments, many may think it is time to change direction, and the question remains whether it is time to do so.
DAX 30 4 hours diagram
As you might expect, the DAX 30 is gaining momentum as it approaches the end of its triangular pattern, but the direction is still uncertain. The German index has fallen below its trend line support for three consecutive sessions, a sign of weakness at the lower end, meaning that a decisive step could be seen in the coming days. To confirm a rough breakthrough, I would look at 15,420 pauses. Alternatively, the index has also tested the upper limit of the triangle, so a fraction above 15,725 could be a sign of further momentum, trying to exceed the all-time high of 15,806.
FTSE 100 daily schedule
The FTSE 100 has never been able to cross the 7,000 mark since it broke in April and the UK index may be back below that key level. The bullish bias in recent months has begun to fade and the FTSE 100 has strengthened in the horizontal range in recent weeks. So far, the 7,042 support has withstood fairly well, but the increased decline could nullify this level in the coming days, meaning that the 7,000 limit is the next key area to monitor. Alternatively, look over 7,200 pauses to get back on track.
– Written by market analyst Daniela Sabin Hathorn
Follow Daniela on Twitter @HathornSabin