Looking at how DOW Futures opened after their two day holiday, the market has been forced up and risks becoming interesting should the DJI stumble above 13151. Hopefully, this will effect London as 5882 remains as an initial target with secondary at 5926. Of course, keeping an eye on the weather forecast remains part of a sensible trading strategy (a sentence I never expected to write as I usually blame the Euroshambles for mucking our charts up.)
A couple of our analysts are based in Scotland, neither of whom would raise an eyebrow unless wind speed exceeds 90mph. Thus, they don't get the stock market mood caused by storms in New York and for a while yesterday, neither did the FTSE until 3 minutes before the closing bell. Essentially, our outlook for the London index is completely unchanged - the risk of a breach of 5770 driving a drop toward 5700 remains, now with a stutter point around the 5750 level. There's a pretty big however.
We've been experimenting with our analysis and reporting software thanks to so many customer suggestions. During November, it is probable we shall expand this list to 150 shares, covering a greater number of useful FTSE's and 350's and substantially more AIM stocks. The initiative is under test currently and hopefully will yield results. As for the FTSE, the UK 'Recovery' news which appeared on Friday managed to avoid the worst of the dip. However, the market is not out of the woods just yet and would require to exceed 5842 before we'd be convinced.
Trying to make sense of the FTSE yesterday proved somewhat beyond logic. Even our initial target failed 10 points short which was a bit annoying and from where the index closed, a visit toward 5790 looks inevitable. Additionally, a scenario has developed which allows for a drop toward 5700 pretty swiftly should bad news occur capable of driving the FTSE below 5770. One odd thing about the DOW we notice. It made our target bottom in the futures but the real index hasn't. Which is a bit weird.
The DOW remains on a path with a potential bottom at 13015. We'd submit this suggests another pretty rubbish day for the FTSE unless some positive news breaks. The FTSE did indeed break a recovery trigger in the late half of the session yesterday with the result we'd not be surprised to see 5851 today with 5870 possible should the market decide to outperform.
Our drop triggers remain intact and untroubled for the FTSE. But they remain!
When we postulated a 300 point reversal on the Dow, we did not expect the greater part of the drop to occur during the following session! It remains with a bottom potential at 13015. What was of interest, the FTSE did not slavishly follow New Yorks plunge. It was a foul day but with nothing like the kamikaze conviction shown by the DJI. The big question is, will the DOW stage a fake recovery? If it exceeds 13151, slight recovery toward 13218 looks sensible and the problem is, this does not remove the index from the zone where the overall bottom potential lurks.
The DOW JONES was simply hilarious last night, A movement in the last ten minutes almost looked like a panic reaction, attempted to stop the index heading toward 13015. However, it's most emphatically not out of danger and further slump below 13235 will tend to give an air of inevitability to the drop potential. What this means for the FTSE remains as horribly true as it did yesterday morning - movement below 5865 risks a visit toward 5830 with ultimate at 5621.
This week risks getting a bit foul should the Dow Jones slink below 13300 as we calculate an initial drop target at 13197 with secondary a pretty nasty 13015. At time of writing, DJ futures are at 13320. As for the FTSE. movements late on Friday indicated a bottoming potential at 5865 which bothers us, 'cos that's exactly where the futures currently are sitting. As a result, we'll not be stunned should the FTSE open around such a level. The danger comes should the market did below such a level as the logical assumption will be for further relaxation toward the RED line.
Amazingly, the logic suggesting the FTSE is on a path toward 5975 with secondary at 6002 managed to survive Thursday. The market remains requiring to blip below 5888 to reduce the near term upper potentials (and suggest 5864) and 5820 to destroy them totally.
If the FTSE were a share, our primary logic suggests we should write, " now on a path to primary target 5975 with secondary at 6002 ". It would require to relax below 5888 to reduce these potentials in the near future and below 5820 to cancel them totally. Another logic we throw at it suggests a potential high of 6029 is now available. The market has certainly turned itself around and should the FTSE succeed in closing above 5921, we'd start to be quite confident of a some proper recovery making itself felt.