We countenance several reasons why and which indicate the fragility of the FTSE’s current position:
1. It is not managing to reach up to test the 6055/6100 resistance area. Whilst it hangs below it is displaying weakness and a vulnerability to a sudden downturn.
2.If/once the level selling should outweigh the level of buying, causing the index to fall even just slightly, that fall is likely to quicken in pace and extent as selling orders are progressively triggered on the way down.
3.It is approaching its 5th attempt at the 6055 resistance area. 5th attempts are usually followed by fast, sometimes excessive, moves whether it is a successful breakout or a failure to breakout. In the present case, a failure to breakout above 6055/6100 would reflect the current weakness and so exacerbate the resulting adverse reaction.
On a brighter note the FTSE did manage a small increase last week (just +30 points). It continues to hang around the 5900 area as the market makers wait for some good news as a reason mark up prices to get the ‘bulls’ to buy (with the ‘bears’ waiting for bad news as they wait to sell).
Volumes last week were at, or even slightly above, the average level and with little gain or loss over the week it shows how evenly divided are the bulls and bears. It also suggests that some of them are betting quite heavily – so ‘something’ is likely to happen soon.
Given that what happens on Wall Street largely dictates how the FTSE will react we should now add a 4th reason to our ‘dangerous place for the FTSE to be’ list -
4. The major US indices (DJIA and S&P 500) have not yet managed to overcome overhead resistance and, if they fail so to do, they will fall back and take the FTSE down with them.
Full details and analysis of other markets (Germany, France, China, India, Russia,Brazil etc) are available from ShareHunter’ s latest ‘ FTSE Forecast’ report.











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