Major trigger points for FTSE 100

Created 19/03/2017 at 22:20

FTSE for the week (FTSE:UKX)

It gets boring writing about the doomsayers always being proven wrong by the UK market, but apparently we continue to go to "hell in a handcart" while the index continues to sing from a different songbook.

The odd thing is that a disturbing number of FTSE 100 components should be going up, but are failing to do so and, worse, some seem intent on lemming behaviour.

However, the law of higher, higher, highs seems to prevail with the index, and now movements above 7,448 point at growth coming to 7,511 next, with secondary, if bettered, somewhere around 7,582 points.

Once again, though, we've issued at the 7,520 level as this is a big picture ambition where the market "almost must" pause for breath, if only to gather sufficient oomph for a further push upward.

Currently the index needs to fail below 7,312 points to break the red line on the chart and risk spoiling the party.

Where does the party end?

We're currently about to calculate a ridiculous looking 8,094 somewhere down the line and, amazingly, the situation still remains of the index needing below 7,312 to shatter such an illusion.

Please note, our track record of injecting common sense to balance silly sounding ambitions historically leaves us with egg on our faces, essentially "the computer" tending to be right.

In this instance, "the computer" still points out 7,520 as capable of some stutters.

Near-term, if it's all going a bit wrong, the FTSE needs to fail below 7,410 to drip out the immediate uptrend and enter a cycle toward 7,357 apparently. Secondary, if broken, is allegedly 7,270 points, but given the 'red' uptrend, we'd suspect a bounce before such a point.

As always, the problem remains of short positions underperforming due to the strength of an uptrend. Only once 'red' breaks dare we suspect trouble ahead.

This week, we shall cover the retail banks as we suspect their lack of performance may yet be the harbinger of trouble for the FTSE - essentially if they ain't goin' up, they risk goin' down!

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.

Alistair Strang has led high-profile and "top secret" software projects since the late 1970s and won the original John Logie Baird Award for inventors and innovators. After the financial crash, he wanted to know "how it worked" with a view to mimicking existing trading formulas and predicting what was coming next. His results speak for themselves as he continually refines the methodology.