The support levels (5100 for the FTSE 100 and 8888 for the FTSE 250) held during a severe testing of them last week. This is a positive signal that the Uptrend is in reasonable shape and it confirms that higher share prices should continue.
However, there are three worries that cause concern and, until they are resolved, the continuance of the uptrend and of higher share prices cannot be taken for granted:
Worry 1 – To provide confirmation that all is well with the Uptrend we need these two indices to stay above those support levels again next week. If the sellers gain the upper hand then the market could take a tumble if the 5100 and 8888 levels are broken.
Worry 2 – Despite the positive moves on all the major markets last week our Momentum Index has contued to suggest that the indices may not go much higher and that a longer correction in share prices may be in the offing.
Worry 3 – The US S&P 500 is not yet displaying any real sense of positivity and, whilst it remains below the important resistance level at 1122 (it closed last week at 1069) it will be prone to weakness and at risk of sudden falls. And no matter what we would like to believe about the independence of the London market when Wall Street says “jump” the London stock market says “how high”! It is the S&P 500 index that we must watch and be mindful of.
Individual market commentary and illustrative charts are available at http://www.sharehunter.com/news/market-review/
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