FTSE 100: What does it all mean?

Written: Sunday, 26th March 2017 - 23:2

FTSE for the week ahead (FTSE:UKX)

Something truly peculiar happened on Friday 24th March, but unfortunately you needed to watch FTSE 100 futures to see it with perfect clarity.

Essentially, from 3pm onward the market behaved as if a decision had been made not to allow the FTSE to better a downtrend since 21st March.

As the evening session progressed, there were no less than seven bonks against this trend, culminating in a death plunge (and miracle recovery) in the final hours before the weekend.

Events of this nature are fairly common with AIM shares, common with the retail banks, but as for an entire index, it fell into the "You don't see that every day" category of movement.

What did it all mean?

Aside from the logical conclusion it made an entire stockmarket behave as if it were under manual control, we rather suspect all we witnessed was software lazily marching on the spot prior to the weekend, but it does suggest should the FTSE now better 7,346 during trades on Monday, the index should experience an 'up' day as it betters the blue downtrend on the chart.

A move such as this should prove capable of triggering slight growth toward 7,357 points. And, yes, we know this isn't interesting!

What is interesting is shown on the chart as it would propel the index into the fabled land of Higher Highs, suggesting 7,400 should make a guest appearance at some point soon, perhaps even 7,465 points if things get exciting in the run up to Mrs May delivering a suicide note to Brussels. Or is it a declaration of economic war?

Less solid on the chart is the 'red uptrend' since February, as a break below this - currently 7,307 points - apparently enters a phase toward 7,182 points with secondary, if broken, at 7,040 points.

If intending to inject some sanity into the doze of gloom, it may prove safer waiting to see if the Brexit Vote uptrend at 7,280 currently breaks.

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.