FTSE 100 analysis and bitcoin's path to $16,000
After falling from recent highs, our chartist predicts future movement. He has a FTSE 100 forecast, too.
28th June 2019 09:03
by Alistair Strang from Trends and Targets
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After falling from recent highs, our chartist predicts future movement. He has a FTSE 100 forecast, too.
FTSE for Friday and a bit of bitcoin
We started this week proposing a scenario where bitcoin could soar to 13,286 dollars. The scenario triggered, the phony currency actually achieving $13,800 before hitting a bit of turbulence. Perhaps turbulence is a bit of understatement, given the -20% thrashing it received. In fact, it may fall further.
Continued bitcoin weakness below $10,330 calculates with the potential of a further 1,000 dollar drop. It "should" bounce by $9,330, especially due to it exceeding our earlier upward target. The implication given is of further strength in the future now calculating with 16,000 dollars and beyond.
Current behaviour highlights one of our great dislikes with bitcoin. Traditionally, we give primary and secondary targets, our thinking being of turbulence at each target level. In the case of bitcoin, it often vaguely follows "the rules", but with price swings more reminiscent of AIM shares 10 years ago.
When ramping groups would seek to substantially enhance investor expectations, creating a buying frenzy for dodgy AIM companies, invariably this would leave a majority of investors "walking funny".
Thankfully, this is one area where market authorities tend to exert some control and 'pump and dumps', while still present, are less frequent. Of course, there's now bitcoin available to damage traders wealth as its price swings can defy logic.
FTSE 100
As for the FTSE 100 for Friday (it closed Thursday at 7,402), we've a ruling expectation of the index heading to 7,328 points and hopefully a bottom.
The market needs better than 7,437 to escape the immediate downtrend, giving a pretty easy visual level for a stop loss. Anything near term below 7,375 should promote the final downhill drag to target.
There is a problem, if 7,328 breaks. We obviously can calculate a secondary and it's at 7,302 points, a level where a real rebound can be hoped.
Importantly, if we opt to review the upward potentials for the index, the market presently needs better than 7,432 points to trigger a near-term rise toward 7,464 points.
We have some doubts about this, given it would exceed the market downtrend since May 2018!
In the unlikely basis this proves correct, our secondary calculates at 7,464 and, rather amazingly, takes the UK market into a longer-term region, with 7,630 as a major ambition.
Have a good weekend.
Source: Trends and Targets Past performance is not a guide to future performance
Alistair Strang has led high-profile and "top secret" software projects since the late 1970s and won the original John Logie Baird Award for inventors and innovators. After the financial crash, he wanted to know "how it worked" with a view to mimicking existing trading formulas and predicting what was coming next. His results speak for themselves as he continually refines the methodology.
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