FTSE 100: Key levels for election week

FTSE for this week (FTSE:UKX)

Given the UK faces a general election in the coming week, any form of accurate near-term projection is liable to face repeated mincing with each opinion poll result published.

Our suspicion remains, almost regardless of who actually wins on Friday morning, the market will experience some sort of slump. The "only" problem is calculating how bad it could be. And there's another major problem.

With the FTSE repeatedly achieving higher highs, there have been a few nudges to our big picture calculations and the (absurd-looking) scenario now is of above 7,600 facing some stutters at 7,686 but, realistically, we're being asked to accept 8,000 points is now making itself known.

Before rushing out to open a long position, it's worth pointing out the index needs to slip below 6,500 to cancel these prospects - rather a wide stop loss position!

There's a further bit of oddness going on. Despite the FTSE Index itself showing untrammelled optimism for the future, when we run analysis against shares, quite a few are suggesting they want to relax in the near future.

As this will obviously impact the FTSE, we're pretty far from comfortable now mentioning 8,000 points as a major level of turbulence.

Near-term, it appears 7,520 shall prove pretty key in the coming week and, if the FTSE weakens below such a point, we suspect some weakness toward 7,470 is coming.

Secondary, if broken, comes in at 7,270 points and a probable bump against the immediate uptrend for 2017.

The - somewhat confusing - conclusion is simple; despite the threat of the market going down, it's probably still going to go up longer term!

However, if it makes below 7,270, ideally with closure below such a point, the pace of acceleration weakens substantially, as does the prospect of 8,000 makes a guest (guessed) appearance...

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.

Alistair Strang is a freelance contributor and not a direct employee of Interactive Investor. All correspondence is with Alistair Strang, who for these purposes is deemed a third-party supplier. Buying, selling and investing in shares is not without risk. Market and company movement will affect your performance and you may get back less than you invest. Neither Alistair Strang, Shareprice, or Interactive Investor will be responsible for any losses that may be incurred as a result of following a trading idea. 

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