Here's where FTSE 100 can 'bounce convincingly'

The election and the FTSE (FTSE:UKX)

Having spent the afternoon fitting snow wheels to a lawnmower, it's with some surprise we note a plethora of emails expecting us to know what's coming next on the market.

Kidding aside, the weight of expectation is quite overwhelming given our prior success with calculations during previous UK political shenanigans (more on the snow wheels later).

As the FTSE 100 closed on Wednesday, we panicked a little due to the market slithering below 7,478 points. This was quite a big deal, opening the door to 7,368 points next, maybe even 7,270 if everything goes wrong.

A couple of things worth bearing in mind if expecting us to replicate our success prior to the Brexit vote.

Firstly, the underlying uptrend currently is to around 8,000 points. We've not been making much noise about this, but it's certainly worth remembering any reversal capable of hitting the red post-Brexit vote uptrend is liable to bounce quite convincingly.

As a result, if the wrong (or right) dweller in troughs is elected and the market opts to celebrate with a sharp reversal at the open on Friday, opening below 7,368 effectively allows a further 100-point leak downward before a bounce is hoped.

Surprisingly, the exact level of the red line currently is 7,280.786 points, so perhaps our calculation of 7,270 is liable to be out by a few points. This would be unusual if a Big Picture reversal is enacted.

Secondly, the market is trading in a period of Higher Highs and this was not the case at the time of the Brexit vote. The current situation on the FTSE had the market attempting to reach a near-term 7,686, but the index has so far refused to better 7,600 points.

We smell a bit of rodent with Wednesday’s reversal and shall pay close attention should the index better 7,530 on Thursday as there's a pretty good chance the drop to 7,478 will prove to be fakery.

Given it came with an implosion on the price of Brent crude, perhaps we're being far too cynical.

Long story short, if the FTSE shows anywhere around 7,270 on Friday morning, there's a pretty good reason to go long and wait. Who knows, maybe the 8,000 level will prove accurate!

As for snow wheels on a lawnmower, long-term readers will remember our Benny Hill moment with a runaway self-propelled beast.

That particular nightmare is apparently now trying for Formula One success, rebadged as McLaren. But the replacement mower has been struggling with a gentle slope and if the grass is damp, it sideslips.

A memory of a Norwegian trick, placing studs in tyres, inspired an afternoon spent drilling the tyres and forcing screws through.

We've now got a lawnmower that wheelies! Good luck on Friday morning.

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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