I mentioned yesterday that above 7220 we were looking at a test of the 7255 area and we have dropped off that overnight following the China driven rise in Asia. The S&P is once again testing the 2650 area as well. So, the ball is in the bulls court to push on again today and try and break above 7255. If they do then the 7330 area is the next resistance level of note, with 7350 above that. However, we also have R3 today 7292 so we may well see a stutter in this area. Bulls that loaded up on the dip yesterday evening might use this level as a chance to take profits.
We also have the top of the 20 day Raff channel at 7270.
On the support side of things then 7215 is now support, having been resistance previously, with the daily pivot at 7181 below this. If the bears were able to break below that overnight low at 7171, then a trip down to 7110 looks possible and also worth a long there (though I haven't put that in the trade plan as I am not convinced we will see that today).
All 3 of the indices are near or at the top of their 20 day Raff channels therefore I am cautiously bullish as we may well recoil from this resistance. Resistance for Dax, S&P and FTSE 100 from this is 12420, 2657, 7272 respectively. The bulls therefore might well need a big push to get through these.
So for today I am thinking that we see a bit of optimism but am watching 7255 and 7300 closely for resistance, and 7215 and 7181 as support.