Global stock markets in short-term correction
Last week the DAX 30 futures made a new one-year high at 11,895. However, we’ve seen a fairly sharp correction in the past three sessions, dipping to a low of 11,663 on Monday 30 January. If we hold below 11,700 this should signal a further correction. The first main support of the week is likely in the 11,600/11,590 area.
We are becoming oversold in the short term. This means there’s a good chance bulls can regroup here to resume the longer-term bull trend.
If there are further losses, however, we could target the 11,460/11,450 area. This should represent a strong buying opportunity where bulls can try long positions. Place stops below the January low set on the first trading day of the year at 11,402.5.
A break below this level could set in motion further losses. We would set a first target of 11,300/11,290 but we couldn’t rule out a move as far as 11,160/11,140.
The E-mini S&P 500 peaked at 2299.5 last week. The correction has so far taken us down not quite 2%, bottoming yesterday at 2263.25.
If we hold below minor resistance at 2271/2276 further losses look likely. A break below 2260 would target 2255/2252. A further break below the three-week low at 2248 then risks a slide as far as strong support at 2226/2224.
This should be a good buying opportunity in the bull trend. However, long traders would do well to have a stop below 2213.
The Dow Jones hit the headlines last week, as we finally reached the big 20,000 target many investors had been anticipating. The March futures made an all-time high at 20,073 but the market has since corrected back to 19,800 as of the low on Monday January 30.
If this low is broken we can look for the next target of 19,710/19,690. We should be severely oversold in the short term at this stage. Yet, if we see further losses, we could reach as far as strong support at 19,460/19,440.
Technical Analyst & Trader
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