FTSE 100 breakout confirmed

What a difference a week makes. Seven days ago, and after a 300-point rally, the FTSE 100 began a three-day losing streak. Re-checking the charts, we identified a triangular pattern developing. We said a breakout by mid-October "is inevitable" and "could mean fireworks". It has.

Within 90 minutes of the first opening bell of the fourth quarter, the blue-chip index has added 80 points, hitting a 16-month high at 6,979. That smashed the upper resistance trendline of the triangle chart pattern at around 6,940. Aggressive buying typically follows such a breakout, although a market close above the line would increase confidence.

Colleague and technical analyst Alistair Strang also re-ran his software overnight, predicting a break above 6,940 this morning would open the door to around 6,975. Great call. Better that and the index could hit 7,102, just 20 points shy of a new record high. Let's see.

A surge in the price of oil has certainly helped the oil majors. Despite doubts about the ability of OPEC to actually follow through on promises to cut production, demand for the black stuff is on the up. Brent crude has just hit $50.90 a barrel, its highest in over six weeks.

That's why Royal Dutch Shell is among the leading pack Monday, trading at late-July prices and up 8% since the OPEC meeting in Algiers last week. BP's higher, too, along with a whole host of commodity plays, including Anglo American and BHP Billiton. Among mid-cap plays benefiting from dearer oil are services firm Hunting, up 4%, and Tullow Oil, only slightly behind mid-morning.

And at the Tory party conference this weekend, PM Theresa May confirmed Article 50, which sets the clock running on our exit from the EU, would be triggered by March at the very latest.

That adds a bit of certainty to the whole Brexit thing, and caused the pound to lurch lower again. Predictably, the big overseas earners are in demand Monday. Check out US-focused plumbing supplies giant Wolseley bouncing back strongly after warning last week its smaller UK business was struggling.

We also heard from chancellor Philip Hammond that he's not now targeting a budget surplus by the end of this parliament. And hopes are high that we'll get positive news on fiscal loosening at the Autumn Statement late next month.

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