Greater London, England -- (SBWire) -- 03/23/2011 -- Spread betting and CFD trading provider City Index provide a daily market update looking at the movements in the major markets.

Today, Sandy Jadeja asks whether the present rise in the markets is a dead cat bounce or a real buying opportunity.

The anticipated bearish moves fulfilled the support targets for indices and with the markets off to a good start on Monday the question is whether we are heading for a test of the recent highs or setting up for further declines. There are several factors at play here and each need to be addressed in order to decide on the next move. Oil prices also reached a key support level and has created a bullish setup but traders can also expect a choppy move for this week as the commodity is likely to test nerves given the situation in Libya.

FTSE 100 reaches downside target

The UK FTSE 100 index reached the first base support of 5600 and has since seen a bounce higher. The worrying aspect is that we saw a 123 type of correction rather than a corrective ABC which suggests another leg lower cannot be ruled out. Currently the index is heading straight into resistance between 5823-5877. If cleared then the 6117 level may be a possibility for the bulls. A failure at resistance could set the stage for a further bearish decline to see the index reach lower for 5445.

Dow Jones aiming for 12000

After declining -6% from the 12283 high, the US Dow Jones fell below the 50% retracement level of 11660. With a low of 11555 the index is set to reach higher back towards the 12005 – 12127 level. If the index fails to clear these levels then like other indices we could be facing further declines. This week should provide further clues for the intermediate direction once we see how the indices react at the over key resistance levels. Like several indices technical indicators remain bearish until we start to see strong momentum with upside breaks confirmed.

Crude Oil mixed signals

As expected Crude Oil declined to initial support at $97 for the May contract. So far the reaction has been bullish but with cross signals from various technical indicators, Oil will need to break above $104-$106 in order to continue higher towards $117 as the next price objective. A failure to hold $97 could open the door to see a decline towards $94 as the next support base. Short term Oil looks bullish but intermediate term signals are bearish. The next 3-5 trading sessions should hint on bullish or bearish aspects for the near term view.

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Jonathan Smith / Alex Nekrassov, New Century Media, Tel: +44(0)20-7930-8033, Email: jsmith@newcenturymedia.co.uk / alexnekrassov@newcenturymedia.co.uk