DAX 40 crashed from the sell opportunity at 15700/750 wiping out 3 days of strong gains to hold just above important head & shoulders neckline support at 15030/14970.
EuroStoxx 50 March—watch the Head & Shoulders neckline at 4050/30—I think it will break sooner rather than later to trigger a minimum 10% crash. It could be a lot worse.
FTSE 100 March remains very hard to read in these conditions. The chart is messy in my opinion. There is no indication of a significant move to the downside but the other 2 markets and the E-mini S&P look like they can crash.
Today's Analysis
DAX is likely to be building the mother of all head & shoulders patterns. A break below important head & shoulders neckline support at 15030/15000 would be a sell signal. A break below 14800 is probably a more important sell signal. The market could go into free fall—I am not kidding. Look for 14650/600 and support at 14350/300. A break below 14200 is the next important sell signal.
The index is obviously more volatile than usual and volatility is likely to increase I think. I also think gains are likely to be limited with resistance at 15300/330 and 15450/490. Shorts need stops above 15600. Strong resistance at 15700/750. Shorts need stops above 15850.
EuroStoxx has its most important support of the week at 4050/30. A break below 4020 is a very important longer term sell signal and could trigger a crash. Gains are likely to be limited with resistance at 4125/30 & 4165/75.
FTSE 100 is holding up much better as we held minor support at 7450/40 on Friday. We could target resistance at the January high at 7550/70. A break higher targets 7620/30 and 7660/70, perhaps as far as 7740/60. Minor support again at 7450/40 but below here can target 7410/00 and 7350/30. If we continue lower, look for 7280/60.
Video Analysis