FTSE 100 – The rises in the FTSE 100 over the past two weeks are nothing more than a short rally within the main downtrend. The index is likely to fall back down to the important 3475 level (but not necessarily during this coming week).
FTSE 250 – This market index remains in a congestion (sideways) trend; the main trend – which is a downtrend – being temporarily in abeyance. From the chart, you can see the recent decreases and increases in the trading volume; these suggest that, as buyers jump in (thinking, yet again, that the market has bottomed) there are others (more sanguine) who are taking advantage and selling out to them. Hence the price/index moves within a narrow, ‘congestion’ range. Our analysis suggests that the index might take a steep fall soon.
S&P 500 – As expected the market has rallied back up to the 790 level area (an important suport/resistance level). The lower close for this last week suggests that thsi rally may be very short lived. Again, look (on the chart) at the level of the volume and note how big ; was last week’s. It was just slightly less than the big volume spike last September that preceded the steep fall in the index. So, is this about to happen again? Well, it is an indicator of one of two scenarios – Either – the low of 667 three weeks ago is to be the final low and the market might now continue to climb gently and end its downtrend – Or – the professionals took advantage of hopeful buyers and sold more stock to them – in anticipation that the slide in prices is set to continue, probably taking the index down to the 600 level and, probably, then on to the 400 area. And that, dear reader, will have traumatic reflection on the FTSe’s and other European markets!
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