Our Overall Market Ratings (‘OMRs’) for the FTSE 350 and the S&P 500 have hardly changed over the past few weeks. They continue to indicate a  progression towards a new ‘bull’ market. But the OMRs of both these major markets must, for the time being, still be considered as indicating only a potential ‘bull’ market trend rather than an actual ‘bull’ market because of the split between the Stage 1 and the Stage 2 proportions (the majority of stocks being in Stage 1 trends). Because of this split our concern remains the ever present possibility of a sharp retracement in prices as Stage 1 trends are always more volatile and susceptible to an increase of sellers over buyers on bad news.

FTSE 100 – The index continues to trade in a range between (above) its Moving Average (‘MA’) and the overhead resistance level at 4660. It is now falling towards a test for support on its MA at the 4160. Bulls must hope that it finds support there. If it doesn’t and it falls below its MA then this will presage a steep fall back down to the 3760 level and, probably, then on down to the important support level at 3475.
So it is vital that the index stays above 4160 if there is to be any hope at all of any continuation in the recent recovery.

FTSE 250 – The FTSE 250 continues in much better shape than its big sister (above) as its MA is still rising rather than just meandering sideways as is the case with the FTSE 100. The index itself is tending to tread water though and to trade in a range between 6840 and 8050. The upward moving MA will ‘meet’ the index price if the price continues to move sideways. This will be an important test as, at the meeting of the two, the price will either jump or drop. So this index needs to be carefully watched over the next few weeks with special attention being paid to the price/moving average relationship.