Taken from www.charmercharts.com

FTSE:

FTSE broke the 5878 level but could not manage much further than the 5896/97 resistance. The market is really struggling now and we saw profit taking in the afternoon session down to good 5836/32 support. All shorts to be covered in this region.

Any longs entered here need stops below 5825. If we see a break below look for Friday’s lows at 5794 down to short term Fib support at 5789. Attempt longs here with stops below 5772/75 as this should see a test of excellent Fibonacci support at 5755. This is expected to hold the downside at this stage and provoke a decent bounce. If we do see below this good support we would look to 5720/21 and would look to attempt longs with stops below 5705 as this is excellent longer term support.

First resistance we need to get through if we are to see any bounce is short term fib resistance at 5840/46, above here and we may see a return to the 5878 level that held us down since the beginning of Feb. Clearly, however, the main resistance today is at 6 month highs of 5897/01. Attempt shorts here with stops above 5913. If we got through here today we would for a test of resistance at 5931/36 up to trend line resistance at 5944. Shorts here need stops above the next long term trend line which comes in at 5959. Above here look for 5974.

DAX:

Dax went for a retest of last week’s highs at 6845/49 but failed just before to form a double top as we had expected. We have been predicting for the last week that the market has topped out and will head lower. This now looks ready to play out over the coming days.

Selling in to any rally is now the preferred strategy. Above 6747 we can go for 6795 and then back above 6813 gives us the chance to retest the 6833/49 resistance band. Attempt shorts here once again as we expect a double top formation.

Bulls will have to push through 6860 now to negate building downside pressures and then test the trend line above at 6896. Once through 6914 we then see the market continuing higher to 6947 where it would be wise to take profits on all long positions.

Failure to get past 6777 keeps the pressure to the downside and below 6746/42 sees further selling emerge for a test of 6694/83 ahead of Friday’s lows at 6651. A break below 6639/32 adds pressure as we look for 6581 to cover all shorts and attempt longs down to 6560 for a quick bounce.

Eurostoxx:

Eurostoxx made it through 2509/11 to the next level of 2521/25 and topped out here. We have been predicting for the last week that the market has topped out and will head lower. This now looks ready to play out over the coming days.

Failure to get back through 2486/89 keeps the pressure to the downside for another test of 2469/68 support. If this does not hold look for 2454 which is expected to hold at this stage. Cover shorts here and attempt longs for a quick bounce, perhaps to 2486/89. Stops needed below 2445 for 2431 as the next target. We look for a buying opportunity below at 2400/97.

Above 2509/11 should keep the market positive and looking for 2521/25. Attempt shorts with a stop above 2534 which would lead to a test of recent highs at 2544. Attempt shorts again in this band as the previous highs could hold the upside today. Only a sustained break above 2553 then sees 2569 tested with 2608 in our sights as a potential target later in the week. Longer term big targets to bear in mind are 2633 and 2669.