It is satisfying that our analysis was correct in that the 30wk Moving Average of each of the main indices performed as we said it should and had the effect of changing the direction of the index. Each index fell and then reversed back up the scale from the meeting point with its MA and created new trend lows in so doing (but, significantly, not higher lows).
We would tempting fate to say that worst of the danger (of a collapse of share prices) has now passed; at best all we can say now is that it has been deferred! The markets are not out of the woods yet; there are still too many potentially negative signals for us to be able to feel confident that another test of the moving averages support levels will not be made soon.
For the FTSE 100 the situation is that it must climb to and break above the January high at 5600 before a climb to test 5770 becomes a real prospect. Whilst the FTSE remains below 5600 there remains the probability of a fall back to the 5100 area.
So, as the Uptrends are still in place – although weaker than in the July/December ’09 period – we are back to eschewing all but the very occasional ( and only very obvious) ‘short’ trade alert and will stay with identifying the ‘long’ side of potential trades.
Individual market commentary and illustrative charts are available at http://www.sharehunter.com/news/market-review/
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