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FTSE 100 (UKX)
FTSE 100 bounce almost unheard of
By Alistair Strang | Wed, 6th January 2016 - 17:30
We entered the New Year with my voice of doom still resonating - "The FTSE is going to 5,744!" - and, frankly, no one more than I hoped I was talking tosh. Just because my software suggests something doesn't mean it has to be true. But, somehow, my box of tricks managed a Time Travel Trick and foresaw the current China Crisis, Korean Crisis, Middle East Crisis, Migrant Crisis, Donald Trump trumpeting crisis - pick one, I don't care.
There is no doubt that the FTSE (UKX) is behaving as if it digested my mother-in-law's turkey (for some reason, she's never figured out turkey isn't a game bird and shouldn't be served with a "rare" tinge).
Anyway, Christmas weight-loss program aside, what must the FTSE now do to rubbish my prospect of 5,744?
Above 6,308 should suffice to scramble my sums. For early warning of emergency recovery, perhaps above 6,170 might be a suggestion a short position risks being tenuous.
This is obviously all bad news for those folk hoping to see some shares do well. At the time of writing, the London market is trading around 6,050 and this has surprised me slightly. Early on Wednesday, I'd issued a primary drop target of 6,043 with secondary target, if broken, at 6,001.
While my near term primary was embraced and crushed after a stutter of around an hour, the market bounced, seemingly with some intent at 6,018 - which is nowhere near my secondary drop target. By doing this, it gives the first hint of some strength, as once a primary target is left in the dust with "Lower Lows", I tend to expect my secondary to come into view. Bouncing 17 points above secondary is almost unheard of - UNLESS a bottom has been achieved.
(Click to enlarge)
The tell-tale is at 6,086
The tell-tale, unfortunately, is at 6,086 points. When I view the market's path since it achieved 6,018, there is an unspoken promise that movement above 6,060 near term should reach 6,086. If it doesn't, any further weakness below 6,043 is going to reach 6,001 in a blink, I'd expect.
If my suspicion is indeed correct and 6,001 is now achieved, if broken it appears the next point we should hope for a bounce is just before 5,890. It's one of these funny things where, if it intends go down, it almost must go up to gather sufficient oomph.
Now, as many other folks are doing, I'm going to watch "The Puddle" again. (hashtag #DrummondPuddleWatch on Twitter) It has even made Sky News which perhaps says more about the day than anything!
This article is for information and discussion purposes only and does not form a recommendation to invest or otherwise. The value of an investment may fall. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.
|Day Range||7411.36 / 7451.68|
|52Week Range||5,958.66 / 7,598.99|
|Last Update: 16:29:59 (27/06/17)|