Last week’s efforts by the markets, and by the FTSE 100 in particular, leaves the impression that the index exhausted itself with its effort in bouncing up off of its 30wk Moving Average the week before. It is as though it felt it had done too much and used too much energy as last week’s efforts lacked any real signs of continuing strength.
An inconclusive week which, just to make life difficult, could be followed this coming week with either renewed energy and a rise up the scale or an absence of buying interest and a fall back towards another test of its (still rising) 30wk.MA.
So, it does look as though we are due for another inconclusive week of sideways movement and whipsawing tendencies as we have all experienced over the last few months (just look at the short term chart of the FTSE 250 index and note how long it has just meandered sideways).
But all of this will change, and probably soon. The market will not go sideways for ever. Our technical signals are far from fully positive, in fact there are several negative signals which hint at the growing potential for a sudden collapse of the markets.
But that will only happen if the FTSE 100 falls below the 5100 level (the equivalent for the FTSE 250 is the 8888 level) and whilst the indices stay above these level there remains the possibility of a return to upward moving share prices. But that will only become a real possibility if the S&P 500 index can get back up to, and stay above,above the 1122 level and that is not going to be easy for it to achieve as it too has a number of negative signals that suggest a sharp decline is still a danger.
So, the message remains one of ‘no change – but change coming soon’. It is a ‘Baden-Powell’ message – “Be Prepared”
Individual market commentary and illustrative charts are available at http://www.sharehunter.com/news/market-review/
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