FTSE 100 still on track for 8,000, just

FTSE 100 for the week (FTSE:UKX)

As we crawl toward the end of August, and the realisation some git is about to start counting down the days until Christmas anytime soon, the market generally experiences a bit of flat behaviour.

Worse, all the proper journalists are on holiday, with newsrooms stuffed with an unsupervised 'z-squad' eager to prove their worth by pumping out ridiculous panic stories in an effort to be noticed.

Often, the effect of this last gasp by the z-squad is to provoke a final dip on the markets prior to the grown-ups returning from their August break. As a result, any final dip around the end of August is often corrected by some surprise strength during September.

Therefore, the coming week is liable to prove interesting, with the additional caveat - remembering the foregoing - any drop is not likely to last.

Unless, of course, it does!

The immediate situation is fairly interesting, as the FTSE 100 appears on a track toward 8,000 points as the next major point of interest. It needs to dribble below 6,750 to utterly trash such a positive notion, though, in fairness, below 7,300 would panic us a little.

On the immediate movement cycle, it appears anything now above 7,550 should prove capable of challenging an initial 7,715 points with secondary 8,020 points.

But as we're approaching end-August, below 7,300 would present an issue and prove capable of weakness toward 7,150 initially, perhaps even around 7,000 points.

We'd suspect the 7,150 thing to be viable, but the secondary, becoming possible longer term if such a level is broken, is a real "lower low" nuisance as the FTSE would enter a region with 6,600 as a bottom.

As the chart below highlights, hitting 6,600 would stink as it breaks the red uptrend that permits 8,000 currently.

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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