Resistance barriers push markets lower again

As previously forecasted, the resistance barriers were proving too difficult to overcome for the stock indices and Gold. This suggests that the market may be in a weaker position and further falls may be on the way into next week. But several factors need to be observed before turning bearish. Whilst the thrust lower seems impulsive by nature, there needs to be a follow through to the downside to confirm that the bears are in full control. Also the close of today must remain in negative territory to ensure that the Weekly charts are also in line with the shorter term daily charts.See key levels below:  

FTSE 100 confirmation at 5595 target

Now that the FTSE 100 has reached the 5595 target successfully the index has confirmed a reversal by declining on cue. It has also become clear that a momentum trend reversal has taken place but will require the index to trade below today’s low next Monday. Once this occurs the index is likely to target the 5430 followed by 5380 downside objective. If further weakness continues next week with a negative close on the week then the month of July is likely to be very bearish and probably set the stage for very sharp declines. For now as long as the FTSE 100 remains below 5595 the odds favour lower prices.

FTSE 100 Daily

Dow Jones turns perfectly at 12835

The 12835 level has worked precisely with a sharp turn lower. With a trend shift in place the index will require a trade lower today below yesterday’s low and finish the day on a negative stance. Even a positive close may require much stronger momentum next week to lift the market higher. After a short bullish period it seems we may see the Dow Jones reach lower for 12470 and possibly as low as 12365 before a short term counter trend move takes place. Next week will be important as the index will need to break below this weeks low to continue lower. Momentum has turned lower for now and seems to remain weak.

Dow Jones Daily

Gold respects resistance at $1630

Like the stock indices Gold has also respected the resistance barrier at $1630. The metal has broken below $1600 and may see short term support at $1560 but appears as if it will test the $1535 to $1525 level. A close below this important support may bring the price of Gold down to $1470 and even lower if we do not see the metal reverse its recent bearish play. The $1600 level must be overcome in order for Gold to get back on track for higher prices over the coming weeks. But momentum is clearly bearish for the moment and next week will need a thrust higher to lift the price back to upper resistance of $1630 again.

Gold Daily