Tag Archive for 'rising market'

The FTSE to Hit 6000?

Published on March 11, 2010 in Market Reviews and ShareHunter News. 0 Comments Tags: , , , , , , , .

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.

FTSE at 6000(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: , , , , , , , .

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.
FTSE + MIS&P + MI

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.

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