Stocks Make Gains As Geopolitical Tensions Calm
Spread betting markets got a renewed jolt of optimism this week, as the SPDR S&P 500 Trust ETF (SPY) and the SPDR Dow Jones Industrial Average ETF (DIA) regained some of the territory lost in this month’s earliest trading sessions. There are two central reasons these positive market events are being seen. First, we had the bullish carry over from last week when the US Non Farm Payrolls number came in again at a figure higher than 200,000. This signals that the world’s largest economy is proceeding in a good direction and that the reduction of stimulus from the Federal Reserve has not significantly limited growth prospects.
Technical Chart Perspective
The S&P 500 has formed an upward sloping trend line since April 14, 2014. It was held by the upward sloping Equidistant Channel for far and price tried to break this channel several times but stayed within it. On July 25, price discontinued this trend line and started to gain strong bearish momentum which continued until this week. Right now, S&P 500 is trading between 50% and 0% retracement level. However, the 61.8% retracement level had been tested as support level since July 01 and this level had turned into resistance from July 31. As this bearish movement was continued for a few days, so it may cross 0% retracement level and may find support around 1864.10. Otherwise, it may bounce from 0% retracement level and check the resistance level 61.8% which is at 1957.86.
The FTSE 100 was hanging tight between the support level at 6625.25 and resistance level at 6866.56 since April 22, 2014. But the price broke this support level on August 06 and formed a bearish momentum. As this support level was pretty strong, so the price may test the support level and may move upward if it can gain further bullish momentum. But as FTSE 100 was trading between a equidistant channel which is showing a downward trend , so price may continue to go down and follow this channel. In this case, price may find another support level at 6541.610.
DAX has formed a downtrend since July 03, 2014 which may continue in the next few days. Price tried to get through this trend line few times, but stayed within it. Support level at 9711.86 turned into resistance at July 28 and this level was performed as resistance for the last few months before May 23. On the daily time chart DAX is currently trading around the historical support level at 9047.49. If price can close below this level, bears may find additional sellers rushing into the market to support their position. In order to respect the trend line, price may go down by developing strong bearish momentum and new support line may found near 8913.27.