FTSE 100: the clue in the trend is to look at the US
The market feels a bit odd, with the FTSE down and US markets up. Our chartist looks for a catalyst.
21st August 2020 10:31
by Alistair Strang from Trends and Targets
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The market feels a bit odd, with the FTSE down and US markets up. Our chartist looks for a catalyst.
FTSE for Friday & GB v Canadian dollar
The day after we discussed trading internationally, the need arose to purchase something from Canada. hence GBPCAD.
The initial urge, just to pay, was somehow suppressed to give time for a look at the currency pairing.
Presently trading around $1.74 CAD (£0.9), the relationship needs to strengthen above $1.77 CAD to confirm the potential of recovery to an initial $1.783 CAD with secondary, if exceeded, up at $1.85 CAD.
Visually, each ambition makes a degree of sense with the secondary, if achieved, taking the pair into a zone with longer-term possibilities at $1.97 CAD.
Needless to say, the option ‘buy it now’ was quickly chosen, realising the probable potential of $1.85 CAD made little difference when considering spending $270 CAD on an obscure electronic item!
Source: Trends and Targets Past performance is not a guide to future performance
FTSE for Friday
The market feels a bit odd, as the FTSE 100’s ending on Thursday really felt like it wanted to reverse a bit further.
This is quite at odds with US markets, all of which feel they want to strengthen a bit.
Friday should prove interesting as surely one shall influence the other, giving a clue as to where the underlying trend presently lies.
Near-term, the FTSE (and please remember we are talking about the London market during trading hours only) calculates as capable of some reversal, should the index wander below 6,008 points.
A movement such as this risks triggering reversals to an initial 5,949 points with secondary, if broken, working out at 5,900 points.
In fairness, we need to mention this sort of calamity takes the market into a position where, in the absence of miracles, ongoing travel to a hopeful bottom of 5,770 points is possible eventually.
The converse side should be if the FTSE somehow manages to rise above 6,046 points.
Such a scenario allows for slightly useless recovery to an initial 6,058 points with secondary, if exceeded, calculating at a rather more useful-looking 6,098 points.
This would certainly undo the poison of the last few sessions, leaving the FTSE poised for 6,140 and beyond.
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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