A brighter forecast for FTSE 100

FTSE Futures (FTSE:UKX)

We always try and find ridiculous analogies to weave some of our local Argyll stories in with market movements. But this weekend, watching a pod of Killer Whales 'playing' with the local, lazy, fat, seal population is proving difficult to integrate.

To be fair, it does provide a fairly interesting and unusual opening sentence, permitting us to warn of the dangers of complacency. Our local seals were reminded, vividly, they are not the #1 predator. A few of them shall not be competing with swans this year in trying to mug food from tourists. As for the FTSE...

The index triggered a movement to 7,395 on Friday, managing to reach 7,369 before deciding it was all too much work. However, the situation remains of movement above 7,369 ideally provoking 7,395 in the near future. To utterly scrub the potential, the index needs to now wither below 7,242 points.

What happens should 7,395 be exceeded?

We shall regard the FTSE as entering a cycle to 7,511 next with secondary, if bettered, at 7,675 points. As the chart shows, there was some sort of hesitation around the 7,675 points during January, common sense along suggesting some stutters at such a point.

There's something peculiar about the red uptrend. This line relates to the uptrend since the Brexit vote, rather clearly showing the market reacting against this trend during the recent plunge and recovery.

Experience has taught, just because a trend line breaks it should not be immediately discarded. In this instance, we can see the market regarded red as important both before and following the trend break it. This sort of behaviour tends suggest any future break of red is liable to prove pretty serious.

If we take this logic seriously, currently, the FTSE requires below 7,193 to advise the recovery is probably fake and a trip to 6,800 is on the cards. Visually, this appears pretty unlikely, instead giving every indication travel to the 7,500 level is on the cards.

Source: interactive investor               Past performance is not a guide to future performance

And here's a photo of a local Killer Whale, posing. (Yes, forgot to take a charged camera!)

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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