FTSE 100: A really important number

FTSE for Friday (FTSE:UKX)

This is probably the scariest item we produce every week, 'cos it's a near-term outlook, which a heck of a lot of people pay attention to. There's nothing like the added frisson, heading into a weekend and looking like an idiot.

And so, here we go again with a Friday which looks like an up day on the market but, as always, we shall examine both sides of the argument.

But before continuing, we've been looking hard at the datasets for both the real FTSE 100 and FTSE Futures over the last five years, noticing something quite surprising in the process. 

Currently, we are to accept 7,450 is a really important number on the index as, should the market now trade above this point, we're supposed to eschew our Big Picture 7,520 ambition and now mention 8,022 points assumes some reality in the distance.

Rather amazingly, to cancel this surprising number, the index only need drip below 7,275 points currently. Given it's only trading 90 points north of this stop-loss position, it's one heck of a long position for the gullible, insane, or those who trust our software implicitly.

Last year, we produced just one report which suggested printing it out and sticking it on the wall. We're reticent suggesting the same with the foregoing, if only due to the plethora of reports suggesting everything is really stuffed. But if the FTSE gets above 7,450, we'll revisit this scenario.

Rather uncomfortably, we're aware Saturday is April Politicians Day and we stress the above is not a joke. Too many folk take us seriously and this suggestion involves real money, never a laughing matter for the 1st April.

The reason for this preface to our near-term scenario is we must now take 7,450 extremely seriously. If bettered... 

Near-term, above 7,372 points signals coming growth toward 7,387 points. As the market closed at 7,369, hopefully "they" don't opt to open Friday 31st up above 7,387 as this will tend foul the immediate growth potential unless the opening high is bettered within the first 90 minutes. Better still should 7387 be exceeded, rather more useful oomph toward 7,430 looks very possible.

We obviously have a number written down above 7,430 and, hopefully, clients who subscribe to our mid-day missive will be appraised of it. Suffice to say, it betters the 7,450 thing in earlier paragraphs.

The flip side of the coin comes with any weakness now below 7,340 as apparently 7,312 can be expected with secondary, if broken, at 7,295 points - and a probable bonk against the red uptrend since last year.

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.