Here's when the FTSE 100 is due to surge to 'higher highs'

FTSE 100 for the week (FTSE:UKX)

Normal rules continue to suggest underlying strength is present in the FTSE 100, despite quite a few deliberate "slow down" movements recently.

The current cycle should, in normal circumstances, top out around 7,576 points. To cancel this prospect, the index requires to slip below 7,400 points.

Given the market closed the week at 7,453, this thankfully isn't the worst stop level given the upward potentials but, to be realistic and adhere to our higher highs mantra, awaiting the index bettering 7,515 would make a saner entry point. But a pretty rubbish width of stop.

The funny thing is we've a suspicion our 7,576 aspiration doesn't have a chance until later in the week. During July, we've noticed the FTSE seems to be trapping itself in a range for six or seven sessions, then moving up to the next trading level. If this pattern of misbehaviour continues, it'll perhaps be Thursday before the next surge happens.

We'd indicated the index requires below 7,400 to trash the immediate uptrend but realistically we'd want the index below 7,340 before expressing serious concern at any reversal as this takes the FTSE into territory where 7,200 must be mentioned as the first drop target with secondary calculating at a more scary 7,025 points.

Our inclination remains sceptical at these potentials until such time we see the S&P 500 at 2,500 and the Dow Jones messing around at the 22,000 level. This will create a perfect storm of reversal potentials with the risk of a need for a drop (if only to feed a rise) creating a domino effect across various indices.

As usual, we'll issue an update if the FTSE moves out with these parameters.

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.

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