Tag Archive for 'Footsie'

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The FTSE could collapse in early 2011

Published on December 20, 2010 in Education, Market Reviews and ShareHunter News. 0 Comments Tags: Bear market, Footsie, FTSE, FTSE 100, FTSE 250, FTSE 350, market rally, market trend, momentum, Moving Average, share prices, share tips, sipp, SIPPS, stock market collapse, stock market crash, stock market trend, The hindenburg Omen.

The FTSE put in another positive week last week but, despite its growing strength and confidence, it still has not managed to breakout above the resistance of the 5800/5900 area.

The FTSE 100 – Click on the chart to enlarge.

If it can haul itself up above, and stay above, the 5900 level (the May ’10 high) then there is still a chance that it will hit the 6050 level by Christmas.

But our main worry this week is the danger signal being offered by our ‘Momentum Indicator’. Last week we commented that our Momentum Indicator (MI) was still showing as rather less than supportive of the FTSE’s recent climb. This week our concern has grown as the weakness displayed by the MI has increased -

Click on the chart to enlarge.

It is immediately obvious from the above chart that the FTSE has moved upwards during December without any support at all from the MI. This is likely to cause the FTSE to fall back again unless the MI shows a reversal and an increase next week.

Previous weakness indications of the kind we are now seeing from the MI have been followed by retracements of between 20% and 25% from the high.

Now, we cannot say that this is going to happen. It may not. Our MI is not an infallible messenger. And we cannot point to any accurate timing even if it is about to happen; it could be next month or up to six months before the rot sets in. But it is well to be aware that there is an underlying weakness to the FTSE – as well as to Wall Street.

Is the FTSE about to Crash?

Published on December 16, 2010 in Education and Market Reviews. 0 Comments Tags: bank shares, Footsie, FTSE, FTSE 100, market rally, market trend, Moving Average, share tips, SIPPS, stock market, stock market collapse, stock market crash, Stock Market indices, stock market trend, trading in stocks, UK Banks.

‘No’ is the immediate answer.

There are no signals that suggest that a crash is imminent.

However, the 5800/5900 resistance area on the FTSE 100 is still having its effect and keeping the index from rushing up to the 6050 level and this raises the question ‘Is the resistance that strong that it will soon push the FTSE hard back down or is it weakening and soon will allow the FTSE a rise to the 6050 area’?

We should soon have the answer. The current dominant trend is the uptrend so the odds favour a weakening of the 5800/5900 band of resistance and for a Christmas present of the FTSE at the 6050 area.

By carrying 25 open Long trades at the moment, we are concerned that with that degree of commitment to the continuing upside of the market we are increasingly vulnerable to the possibility of a sudden, sharp, reversal. We have to stay with the (up) trend and not try to outguess when the next correction will occur and its severity so we stay Long but, wherever we see it as possible, we are tightening the Stop levels so that any reversal would only have a marginal rather than a major impact

The FTSE’s Next Move

Published on November 29, 2010 in Education and Market Reviews. 0 Comments Tags: bank shares, Footsie, FTSE, FTSE 250, FTSE Sectors, FTSE100, market rally, market trend, share tips, stock market sectors, UK Banks, Wall Street.

The only good thing that we can find to say about last week is that the FTSE did not close on its low for the week. This does show that there is some support for the index and that it is still far from being a basket case.

Click on chart to enlarge.

The 5770/5970 area resistance is proving a problem and is preventing the FTSE from jumping ahead. If next week’s trading doesn’t show a positive result (i.e. a close that is a good bit higher than its open) then there can be little doubt that the index is likely to fall further, probably down to the 5400 level area.

Interestingly its sister, and more UK reflective index, the FTSE 250, is still showing a more positive outlook. However it must stay above 10580 during the coming week if it is to be able to pull upwards again rather than fall back towards the 10150 level area.

The current trend indicators show as follows -

Positive Neutral Negative

The FTSE 100 4 4 1

The FTSE 250 8 1 0

The S&P 500 3 6 0

The DJIA 6 3 0

The NASQ 100 9 0 0

You may draw your own conclusions but it says to us that nothing can be taken for granted; there are no strong signals to suggest that there is a crash in the offing but then there are not sufficient positive indicators to suggest that higher prices are a given certainty.

We conclude with the same observation as last week – the US markets (with the notable exception of a strong Nasd. 100) and the FTSE could go either way although with the current trends being slightly positive, even if a bit weak, the jury does look likely to vote 7:12 in favour of an upmove next week.

The FTSE 100 – Where to Next?

Published on November 8, 2010 in Education and Market Reviews. 0 Comments Tags: bank shares, Banks, Barclays, BP, Bull market, crash, Footsie, FTSE, FTSE 100, FTSE 250, FTSE 350, FTSE index, Lloyds, market rally, market trend, momentum, rally, RBS, share prices, share tips, sipp, SIPPS, stock market, stock market collapse, stock market sectors, stock market trend, stock prices, trading in stocks, UK Banks.

Last week the FTSE managed to close above 5770 (at 5875) after quite a strong performance over the week. So what is now needed is for the index to close this coming week at or above 5875.

If it can do that then there is no doubt that it is on its way up to the 5970/6050 area (where it is likely to meet more resistance).

The fact that the FTSE will have re-entered a ‘Stage2’ Uptrend with a strong close at the end of this week means that the 5970/6050 resistance area may not cause anything more serious than a short term sideways move before the index continues to rise up the scale. And that means that the FTSE could be on its way up towards an eventual test of the resistance created by the all-time-high of 6750 created in June, July and October 2007.

But, there is a deal of resistance to overcome before we can look forward to that. And we continue with our worry that the current rally is not receiving sufficient ‘pit-prop’ support to sustain it.

Both the FTSE and the S&P 500 indices are failing to achieve much apparent support from the Momentum Indicator and this is a worrying feature. Note how the recent rises on both indices is not matched by anything like the same rise on the MI. The MI is a longer term indicator and it can take some months before its signals have an effect – so you might understand our concern that not everything in the stock market’s garden is pointing to the sunny uplands -

and that there is a risk of a sharp, and possibly severe, correction building, unseen in the background. So don’t get carried away with the upside potential of this stock market. Not yet anyway.

The FTSE 250 – Going Up or Down?

Published on August 4, 2010 in Education, Market Reviews and ShareHunter News. 0 Comments Tags: bank shares, Barclays, Bull market, Footsie, FTSE, FTSE 250, FTSE 350, FTSE index, Market bottom, market rally, market trend, Moving Average, RBS, Royal Bank of Scotland, share tips, SIPPS, trading in stocks.

A Technical Analysis of the FTSE 250 – as at 4^th August 2010

The FTSE 250 is in a consolidation mode. This could result in one of two ways. If accumulation (of stock holdings) is taking place then the index is likely to start to quicken the pace of the recent rally and so move quickly up to a test of the 10500 level and then, probably, on up to 11000.

Or, if distribution (reduction of stock holdings) is taking place (advantage of the recent rally being taken by the professional ‘in-the-know’ money) then the index is due to relapse and to fall back to the 9610 support level and then, probably, on down to the important 8888 level before support may reappear.

Of these two scenarios, the first is the more likely outcome on present signals -

(Click on the chart to enlarge).

The reasons being that the index’s 30wk MA is still slanting upwards and the index value is maintaining its position above it. Also the 13 and 34 wk exponential MAs (not shown on the chart) are still confirming the continuance of the Uptrend. Volumes are average or relatively low which indicates that not a lot of supply (selling) is coming onto the market which is a positive sign.

Conclusion: the bias is to the upside but caution is required as 10500 resistance is overhead which could send the index back down

THE STOCK MARKET TO FOLLOW ENGLAND?

Published on June 28, 2010 in Education and Market Reviews. 0 Comments Tags: BP, crash, England, Footsie, FTSE, FTSE100, is the stock market going to crash, is the stock market going up, stock market analysis, stock market crash, stock market index.

Last week the FTSE wiped off the previous two week’s gains. In so doing it fell back, yet again, to the important 5000-5100 level area to seek support. If support (in the form of active buyers) does not materialise then the FTSE is destined to follow England’s World Cup performance and to ‘bomb out’.

Our latest ‘FTSE FORECAST’ is available and explains in detail where the FTSE may now be heading.

A Review of the FTSE – as at 18 April

Published on April 18, 2010 in Uncategorized. 0 Comments Tags: Footsie, FTSE, FTSE 100, Goldman Sachs, SIPPS, stock market.

On Friday morning 16th April we were anticipating a comment along the lines of ‘the 5770 level resistance has been broken and all that is now needed is another week of the same or higher prices to confirm the breakout’!

Then, on Friday afternoon, the US SEC dropped its ‘fraud’ bombshell on Goldman Sachs; Wall Street fell off and, of course, the FTSE had to follow.

So we are back to noting that the 5770 on the FTSE 100 is still playing its resistance role. Friday’s sell off looks to have been something of a knee jerk reaction and was not of major proportion. The dominant trend is still the Uptrend so there is every chance that the markets will resume their slow upward course during the coming week or the next and this should take the FTSE on up towards a test of the 6160 level area.

The alternative scenario is that last week could form the top of the recovery rally and could be the start of a longish retracement in share prices but there is really no solid evidence that this might be the case and so, on current evidence, we expect no more than a shallow correction at worst.

The FTSE 100 –

Individual market commentary and illustrative charts are available at http://www.sharehunter.com/news/market-review/

The FTSE 100 Index

Published on April 8, 2010 in Education, Market Reviews and ShareHunter News. 0 Comments Tags: Downturn, Footsie, FTSE index, FTSE100, isa, market top, recovery, SIPPS, stock market.

As we suggested some weeks ago the 5770 level for the FTSE 100 is acting as a level of resistance. The index has spent all of this week testing this level and trying to get above it but is has failed. And today the stock market has seen a substantial retracement.

WE doubt that this will be the start of a longer and stepper decline – not yet anyway. It is likely that the index will recover over the next few days and have another bash at getting above 5770 but the amount of resistance being met does increase the risk of a steeper decline so it will be best not to overcommit to this market at least until 5770 is left behind!

The FTSE to Hit 6000?

Published on March 11, 2010 in Market Reviews and ShareHunter News. 0 Comments Tags: 6000, Bull market, correction due, Footsie, FTSE, FTSE 100, rising market, rising trend.

The 4 week correction in the FTSE 100 index from mid Jan to early Feb looked as though it was the big turning point and the end of the recovery rally that started from the 3500 low back in March ‘09. But the index’s 30wk moving average came to the rescue and (as often happens) caused the index to change direction again and to such an effect that, this week, it has made a new high for this remarkable recovery rally.

(Click on chart to enlarge)

There appears little immediate resistance on the short term horizon to suggest anything other than a short and minor correction so there can be little doubt that the FTSE will reach our target of 5770 soon and it looks likely to do so within the next two weeks. The dominant trend reamins the Uptrend and with this continuing it looks likely that the FTSE will in fact overshoot and try for the 6000 level.

However, even the 5900 area would take the index a bit too far ahead of its 30wk moving average for comfort and this is likely to be the point at which it decides that enough (exhuberance) is enough. A correction back to the 5200 level is then likely.

Will the FTSE go much higher?

Published on March 8, 2010 in Education and Market Reviews. 0 Comments Tags: Footsie, FTSE, FTSE 100, FTSE 100 index, FTSE index, rising market, S&P, share tips.

The FTSE 100 moved ahead strongly last week, confirming an underlying strength.

The ‘change direction’ effect of meeting with its 30wk Moving Average continued to work for all the major indices last week and particularly for the FTSE 100.

With the S&P 500 in process of a (so far successful) test of its important support/resistance level at 1122 all looks to be well with the uptrends of the various markets.

But – and it is a worrying ‘but’ – whereas most of the technical signals for the S&P, the FTSE 100 and 250 and the Dow and Nasdaq 100 are nearly all positive we do have one worrying niggle; a signal that is just not producing the same positive vibes. It is our Momentum Indicator (“MI”).

In the past the MI has been a reliable early indicator of a looming market top and so we do take cognisance of it. Our concern is that this indicator is just not partying in anything like the same way as the indices. In fact, at present, it is travelling in a different direction when it should, if all was well, be moving in the same direction as the indices. The MI is suggesting to mus that the indices may well be putting in a top by reversing direction soon.

From the two charts below you can quickly see how both the FTSE and the S&P have moved upwards during the last week or two whereas the MI has continued to drift sideways or downwards.

If the markets are to continue upwards we would expect to see the MI also moving upwards. But it is refusing so to do. The indices and the MI are moving in different directions. Not a good sign.

Of course all of this could change anfd the MI join the ‘buying’ party but it could also be the case that the party is nearly over.

So, what to do?

Answer; Do not get carried away with the current level of enthusiasm and overcommit to this market. And, where you are committed, keep a close eye on your exit stop prices and keep them up to date.