Tag Archive for 'support'

The FTSE – Up or Down? Is it going to Crash?

Published on May 24, 2010 in Market Reviews and ShareHunter News. 0 Comments Tags: , , , , , , , , .

Despite the doom and gloom in the press and all of the dire warnings of Armageddon to come (although there is no denying that is a possibility) all that has happened to the FTSE so far is that it has retraced back to its important support area of 5100/5000. Nothing new in that as it has been there 3 times in the last 3 months and, on each of those occasions, it has found support and rallied.

But this time it could be different, for the following (technical) reasons:

1. This time the FTSE has fallen below the level of its 30wk. moving average – a negative signal indicating a lack of support and

2. This is the 4th occasion that is has sought support at the 5100/5000 area – and historical records show that the 4th occasion at the same level usually results in a break of that level; (not only that but, after a 4th occasion, the following action can be fast and steep).

So, there is the possibility that the FTSE is going to plummet down to the 4747 level and, possibly, then a lot further (down to 3500) but, for the moment, we must wait to see if support is forthcoming because if it is – on this 4th occasion – then the FTSE could rally back up to the 5400 area.This scenario does not make for easy trading; ‘shorts’ look to be the order of the day but would be stopped out if a rally does ensue. ‘Longs’ are perhaps even more dangerous just now as a price rally may be very short lived as there is a real danger of a price collapse.

Of the other markets, the S&P 500 has tumbled back down to its important support level at 1100 and it is displaying signals of weakness so the danger is that it could, soon, take a nose dive down to the 940 level area if support is not forthcoming this week. Much the same dismal picture applies to the DJIA where increasing weakness is suggesting the index might collapse by over 1000 points, down to mthe 8860 area. The Nasdaq 100 is currently resting and testing for support at the level of its 30wk. moving average. If it breaks below this it is likely to slip all the way down to the 1629 level area.

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

Stock Market Armaggedon Deferred Not Cancelled

Published on February 21, 2010 in Uncategorized. 1 Comment Tags: , , , , , , , .

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/