It is difficult today to talk about just one index in isolation as Wednesday was bit of a symphony between this index, the FTSE and the DAX, but also the SPX and the NDX.
They all hit zone boundaries at the same time and in the case of the FTSE, DAX and NDX broke down below their respective lower boundaries at the same time after having initially rallied.
The NDX was in a poor state (NB it was expected to breakout) but here in Europe both indices clawed their way back up to their lower boundaries by the close, but the UK auction just failed to get this index back into its zone.
The open today will be crucial and although it doesn’t look good as we said on Monday we would expect this index to test both ends of its NZ before deciding and that is just what it has done.
Range: 7350 to 7450 or 7450 to 7550
Type: On balance bullish
The two crucial differences for the DAX was firstly it spiked up to 13049.47 very early on in the day to test again their zones upper boundary.
It was quite a spectacular pullback, almost 50-points, in just minutes which only went to highlight this failed test.
Secondly their auction managed to add 5.44-points which was just enough to keep them in their zone, out of interest London only managed to gain 2.45-points.
However, this then makes yesterday in the DAX a NZ bandwidth test, so expect a breakout today.
The good news is that if it is downwards then 12650 has become R2, the bad news is that it is at 12650, 300-points away.
Range: 12650 to 12950 or 12950 to 13050