Equity indices staying above key round number levels….

Yesterday brought a brief respite to the stock market rout. In Europe, Germany reported a rebound in economic data today, cushioning some of the negative market sentiment.

Looking at the German DAX Index, it appears sideways support is emerging at 11,800 (see below). As things stand, the current correction does not appear to be much greater than the previous two. That is, the correction from 12,400 remains consistent with its previous corrections. This indicates that its medium-term uptrend from 10,400 remains intact. A firm break below 11,800 is needed to reverse the uptrend.

For FTSE 100 Index, its current correction is relatively more severe. But a decisive break below 7,000 is required to affirm a medium-term top (see Featured Chart).

For the CAC 40 Index, its uptrend remains intact, although a sustained drop below 5,200 may reverse this trend.

Lastly, the FTSE MIB Index retains its medium-term rebound as long as prices stay above the key psychological level at 20,000.

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