Interactive Investor

FTSE 100: The right trend

26th June 2017 11:15

Alistair Strang from Trends and Targets

FTSE this week (FTSE:UKX)

As we rush headlong toward the mental fog which usually signifies July and August, the FTSE 100 appeared take a deep breath in preparation for its summer hiatus.

Or, in other words, it feels like the market is about to experience some relaxation unless somehow it manages to better 7,551 points.

On Friday, we'd given what proved a rather clever prediction if the market moved below 7,417 points. Our initial proposal of weakness to 7,396 was met pretty accurately with the day bottoming at 7,396.75 points.

The crucial suggestion from this piece of self-aggrandising is that we're watching the correct trend - always something of a relief.

Now, the situation if the FTSE shuffles below 7,396 is a calculation of 7,346 perhaps being capable of generating some sort of bounce but, realistically, when we take a hard look at where the day closed, we should expect 7,262 points to make an appearance.

The FTSE closed Friday 23 May at 7,431 points, so we're now calculating a drop of 170 points being probable fairly soon.

To utterly nonsense this, above 7,551 is required.

If wanting to be brave, we've an emerging theory which demands the FTSE need only better 7,494 points to "prove" our 7,396 was a bottom as this allegedly will provoke near-term growth to 7,536 points.

If such a miracle were to occur later in the week, the market would beat the immediate 'blue' downtrend and enter a zone with 7,680 looking filled with self-importance.

Our preference is to judge a market by the point at which it closes a session. This being the case, Friday 23rd May created a scenario where weakness to 7,262 is expected.

 

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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