FTSE 100 index must do this to trigger further gains
Right now, predicting the market's next move is like guessing which direction a butterfly plans next.
17th July 2020 08:48
by Alistair Strang from Trends and Targets
Right now, predicting the market's next move is like guessing which direction a butterfly plans next.
FTSE Friday & bitcoin too (FTSE:UKX)
FTSE 100 for Friday. It's time for a deep breath and an admission we're pretty far from confident regarding the markets intentions for Friday.
At time of writing, it appears pretty certain London shall open and trade but, aside from that, in many ways it's like trying to decide which direction a butterfly plans next.
Of course, there's an excuse for market gains but we'd prefer to see the UK index trade above 6,297 to trigger them.
Moves next above 6,297 calculate with the potential of further recovery to an initial 6,363 points with secondary, if exceeded, at an unlikely sounding 6,470 points.
Visually, it just looks like an awful lot to expect in a single day, but who knows? Closure above the prior high will make it a pretty confident sounding ambition for sometime next week.
Unfortunately, for Friday we've a fairly solid argument suggesting some relaxation is possible.
Weakness below 6,225 risks reversal to an initial 6,129 points with secondary, if broken, at 6,085 points.
We're obliged to dust down this scenario, thanks to the market breaking the immediate 'blue' downtrend on Wednesday, then following this up by shuffling below the point of trend break on Thursday.
This is rarely an encouraging signal and forces us to expect the worst.
Source: Trends and Targets Past performance is not a guide to future performance
Bitcoin USD feels trapped, failing to make any conclusive move. In fact, it could be said we're 'waiting for the other shoe to drop!'.
The problem with bitcoin is highlighted by the blue line on the chart, as considerable effort has been employed since April to stop the crypto taking any advantage from the supposed Covid bounce.
Instead, the price has essentially stabilised at pre-Covid-19 levels, promoting suspicions it intends some reversal.
This being the case, we shall be interested should it drop below$ 8,810, as this looks capable of triggering reversal to an initial $7,853 with secondary, if broken, down at $7,063 and hopefully a bounce.
An alternate scenario questions what's possible, should the price exceed $9,750, presently the level of the blue downtrend.
Such a surprise calculates an initial ambition at $10,094 with secondary, if bettered, at $11,401.
Exceed this point, and it appears pretty certain $13,900 shall provide some sort of glass ceiling.
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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