FTSE 100: The 'correct' trend

Written: 17 April at 23:46

FTSE for the week (FTSE:UKX)

Marketing is, perhaps, not a strong point for Trends & Targets. We're rubbish at blowing our own trumpet. Just last week, someone apparently commented that "if they were any good they'd shout it from the rooftops". Were we to point out it took Sirius Minerals just two days to reach our 26p target - heck, it gets boring.

As for the FTSE 100, we've been wavering about which uptrend is actually correct. Our inclination had been to ridicule any trend starting from the post-Brexit-vote manipulated drop, and it increasingly appears the market agrees with us.

There can be little doubt the 'red' uptrend on the chart is important and it results in the situation where the market now needs to trade below roughly 7,298.556 points currently to remove itself from a trend which promises 7,520 on the immediate cycle.

The FTSE closes pre-Easter at 7,327 and so, theoretically, we're presenting a stonker of a long position with a super tight stop!

Lurking in the ointment is a fly. While the FTSE chart does indeed offer a useful position, when we review FTSE futures quite a different number appears due to futures currently demanding the market roll below 7,240 before we eradicate 7,520 as a realistic ambition.

This week, should the market stumble above 7,410, it certainly appears growth to 7,463 makes sense with secondary 7,520 remaining realistic.

On the flip-side, below 7,298 would bother us as it suggests 7,266 initially with secondary, if broken, at a pretty shocking 7,115 points.

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.