The rise in the FTSE last week has taken the index to the same level that it was at 10 months ago. Nothing exceptional about that, you may say. But the point is that this is getting towards the end of the historical maximum period before the market ‘blows off’ – one way or the other.
Looking back over the last 9 years of the FTSE 100 index you can see from the chart below (click on it to enlarge it) that each time there has been a lengthy sideways period (of Consolidation or Distribution) it has been followed by a significant move -
It is during such follow-up moves, up or down, that significant profits can be made.
The current period is further enhanced by the extra compression that comes from the coming together of the two moving averages. These two are good trend identifiers but, when ‘mixing’ together they indicate a building compression which will, eventually, be released by a strong move. And, after 10 months of sidling along, such a move is due soon.
All of this tends to support our view that this Autumn will see the FTSE move decisively.
We are ready for it. Are you?
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