European equity averages bear threats

Intermediate
  • Ongoing threats of a prolonged “risk off” phase with developing trade war concerns have kept global equity markets contained during recent rebounds.
  • Moreover, renewed weakness this week has seen the US equity averages post bearish signals, with the S&P 500 pushing below the prior May low.
  • Today we spotlight the major European and UK benchmark equity indices, the EURO STOXX 50, FTSE 100 and DAX, which are now also vulnerable to more bearish intermediate-term shifts.

EURO STOXX 50 downside threat reinforced

A notable selloff Tuesday and overnight through 3330 support, having been capped by firm resistance at 3379 and setting back from 3372 during the recent rebound, resuming negative forces intact from last week’s plunge through multiple supports to 3305, PLUS from the significant selloff in the first half of May, to keep risks to the downside Wednesday.

The mid-May surge through 3380 neutralised the intermediate-term bear trend for an intermediate-term range, seen as 3275 to 3433, BUT NOW with the bias skewed to the downside for a shift to an intermediate-term bear trend below 3275.

For Today:

  • We see a downside bias for 3305/3299; break here aims for key 3275 and then maybe towards 3351/50.
  • But above 3335 quickly opens risk up to 3354, possibly towards 3372/79.

Intermediate-term Range Breakout Parameters: Range seen as 3275 to 3422.

  • Upside Risks: Above 3433 sets a bull trend to aim for 3468, 3533 and 3681/3703.
  • Downside Risks: Below 3275 sees a bear trend to target 3201, 3136 and 3039.

4 Hour EURO STOXX 50 Chart

EUROSTOXX Chart 2019-05-28

FTSE 100 downside threat resumes

A selloff Tuesday and again this morning to reject Friday’s that was capped by 7316 resistance (at 7303), sustaining bear forces from last week’s aggressive plunge lower through numerous supports to 7185, PLUS from the significant selloff in the first half of May, to keep the bias lower Wednesday.

We see an intermediate-term neutral outlook, with a range seen as 7095 to 7474, BUT NOW with risks skewed to the downside and a bear shift below 7095.

For Today:

  • We see a downside bias for 7185; break here aims for 7149, maybe towards 7126 and key 7095.
  • But above 7265 opens risk up to 7303/16, maybe even towards 7333/35.

Intermediate-term Range Breakout Parameters: Range seen as 7095 to 7474.

  • Upside Risks: Above 7474 sets a bull trend to aim for 7570, 7625.5 and 7700.
  • Downside Risks: Below 7095 sees a bear trend to target 6943 and maybe 6587.

Daily FTSE 100 Chart

FTSE Chart 2019-05-28

DAX bear threat resuming

A plunge lower Tuesday and overnight through 11985.5 support to reinforce the recent stall back from just below 12123.5 resistance (from 12120.5), resuming negative pressures from last Thursday’s very significant selloff (through supports at 12049 and 11986.5), PLUS from the substantial earlier May selloff, to keep the threat to the downside Wednesday.

The May break below the key 11866.5/863 area set an intermediate-term range as 12337 to 11837.5, BUT NOW with skewed risk to the lower level.

For Today:

  • We see a downside bias for 11919; break here quickly aims for 11861 and key 11837, maybe 11784.
  • But above 12015.5 opens risk up towards 12120.5/23.5.

Intermediate-term Range Breakout Parameters: Range seen as 12337 to 11837.5.

  • Upside Risks: Above 12337 sets a bull trend to aim for 12873 and 13000.
  • Downside Risks: Below 11837.5 sees a bear trend to target 11285, 11000/10900 and 10701.5.
DAX Chart 2019-05-28

 4 Hour DAX Chart

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