#INDICES ANALYSIS: #DAX30,#SP500,#DOWJONES,#FTSE100 (18 JULY 2022)

DAX Forecast: Testing the €12,500 Level

True, we are at historically cheap levels, but that doesn’t mean we cannot go any lower.

The German DAX Index rallied a bit Friday as we continue to pay close attention to the €12,500 level. That’s an area that should be paid close attention to, as it is a large, round, psychologically significant figure, but it is also an area where we have seen buyers at previously. Because of this, I think it is only a matter of time before value hunters come into the market near that level.

Keep in mind that the DAX is highly sensitive to the global economy, due to the fact that the majority of the index is made up of massive exporters, and a cheap euro certainly helps the argument. However, as long as production costs continue to soar, there’s no argument for this market to have a major sustainable balance. That being said, if we do break above the €13,500 level, I probably will have to ignore everything and just follow the price.

The size of the candlestick is somewhat interesting, but it still falls within the range that we have seen over the last couple of weeks. The choppy behavior will continue to be a mainstay of not only the DAX, but plenty of other markets as well. After all, the market should continue to see a lot of concerns in both directions. True, we are at historically cheap levels, but that doesn’t mean we cannot go any lower. After all, the global economy is tenuous at best.

FTSE 100 Forecast: Nice Rally into Weekend

Ultimately, this is a situation that will continue to be volatile, so keep your position size reasonable.

The FTSE 100 initially pulled back a bit on Friday but then turned around to show signs of strength. The 7000 level underneath should offer plenty of support, so it’s likely that we would see that as an area where we would see a lot of interest. As long as we can stay above the 7000 level, it means that we could potentially rally a bit. At the very least, the market looks as if it is trying to stabilize and turn around. Ultimately, if we turn around and break above the 7200 level, it’s possible that we could go to the 7300 level. The 7300 level is also an area that has seen action in the past.

The 200-day EMA sits right around the 7300 area, and if we can break above there it’s likely that we could see this market go to the 7200 level. Ultimately, this is a market that I think needs to see a little bit of momentum coming into it in order to break through all of this noise. That being said, the market is likely to continue to be a bit confusing, but if you are a short-term trader you may be able to go back and forth if you have a nice range-bound system.

In general, stock markets are moving in the same direction at all times, as it’s all “risk on/risk off” in general. Because of this, if you see the Asian indices rising, that could give reason enough for the FTSE 100 to rally once it opens. On the other hand, pay attention to the British pound, because if it starts to lose a little bit of value, there could be a normal reaction of markets. Ultimately, this is a situation that will continue to be volatile, so keep your position size reasonable.

S&P 500 Forecast: Banging Around in Consolidation Region

I would not hang on to a position for too long as the noise has gotten quite substantial.

The S&P 500 initially pulled back a bit Friday but then turned around to break above the 3850 level. That being said, there is a significant amount of noise, and at this point, I think the 50-day EMA is going to continue to be an area that people pay close attention to. Ultimately, this is a market that I think will continue to see a lot of volatility, which makes quite a bit of sense.

The market will continue to see plenty of noise, and I think you need to be cautious with your position size. If we can break above the 50-day EMA, then it’s likely that we wll test the 4000 handle. If we can break above the 4000 handle, then it’s likely that the market could go to the 4200 level above. If we were to somehow break above the 4200 level, then it’s likely that the market would change the overall trend.

A break down below the 3700 level opens up the possibility of a drop to the 3500 level, but I don’t think that is going to happen anytime soon. It’s not that I don’t think it will happen, it’s just that it’s obvious that we are moving back and forth with interest rates, and interest rates have softened up a bit as of late. I do think that we are overdone, but that does not mean that the trend has changed quite yet, just that a correction could be coming. Because of this, I think the stock market will fall right along and break to the outside eventually, but only for a short-term rally that I will be looking to short this market when we get a bit of an exhaustion candlestick. Either way, I would not hang on to a position for too long as the noise has gotten quite substantial.

Dow Jones Technical Analysis: Index Rising Cautiously

The Dow Jones Industrial Average rose during its recent trading at the intraday levels, breaking a series of losses that continued for five consecutive sessions, achieving gains in the last of them by 2.15%. The index gained about 658.08 points and settled at the end of trading at the price of 31,288.26, after it declined in trading on Thursday by -0.46%, to close the week with losses of -0.17%.

Technically, the index rises along a minor and corrective bearish slope line in the short term, as shown in the attached chart for a (daily) period, at a time when it suffers from continuous negative pressure due to its trading below the simple moving average for the previous 50 days. There are negative signals on the RSI indicators, after reaching earlier overbought areas.

Therefore, our expectations suggest a return to the index's decline during its upcoming trading, as long as the resistance level 31,885 remains intact, to target again the important support level 29,653.30.

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