A 'remarkable' FTSE 100 chart

FTSE 100 for the week (FTSE:UKX)

We've not published our Big Picture chart for the FTSE 100 for a while and it's starting to illustrate something quite remarkable. It's even worth stressing we've never seen this behaviour against the FTSE, but the Dow Jones did something similar back in November.

When we've seen shares exhibit this sort of recovery, solidly regaining prior trend, it invariably suggests strong growth is going to continue as an entirely new upward trend is about to develop.

When we boasted about our 7,358 target indeed provoking some volatility, we omitted to mention something the Big Picture has been suggesting as, it suggests 7,438 should be regarded as the next significant milestone on the current cycle. And if the market closes above such a point, we're supposed to mention 7,767 as possible.

If the market were a share, we'd be quite confident but, of course, the media constantly remind us of "their" opinion of politicians and this tends to influence our thinking.

Certainly, the "we're all doomed" attitude which prevailed following the Brexit vote appears to be comprehensively rubbished with the main victims doubtless being private investors who fear the worst.

The funny thing is, our outlook at the start of 2017 which gave really "Big Picture" stuff had, in addition to mentioning the 7,350 thing, also given a possibility of 8,200. At the time, we were only trying to grab a headline, but with the visit to 7,350, we're no longer quite as sceptical.

So, what's needed to derail this unbridled confidence for 2017?

Applying similar logic to that used against shares, we'd panic if the market now closed below the red line on the chart, the 2009 trend.

Currently, this would need the FTSE to actually close below 7,145 points. And this presents a potential problem near-term.

The index closed Friday at 7,195 points and movement now below 7,175 signals traffic toward 7,150 initially with secondary, if broken, at a trend-breaking 7,085 points.

In fact, unusually, we can project the potential of a further 100-point loss to 6,985 points, potentially challenging the post-Brexit-vote uptrend.

However, we shall be more interested this week if the market betters 7,260 as moves toward an initial 7,306 look sane. Secondary, if bettered, is at a longer term 7,430 points.

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