A couple of chart patterns that have emerged in the past week or so that are worth considering, firstly on the DAX….. the index was the first to start its underperformance and now sits down on the year, over the past week a pennant formation has been building and a significant break of the 7600 level would signal a continuation of the prior trend with a move equating to the move prior to the pennant, in other words we could see prices towards the 7400 level. On the US indices it is worth noting that both the S&P and Dow have negative divergences on the RSI, on the S&P I can easily see a fall towards the 1460-1475 especially if the Dax leads momentum lower. The 7600 level on the DAX clearly has quite a significant role for the well-being of equities right now…..Good luck, Bally.

Philip Ball | Sales and Trading