FTSE 100 index still not in safe territory
The blue-chip index ended January on a high, but our chartist thinks the downtrend remains valid for now.
1st February 2019 08:59
by Alistair Strang from Trends and Targets
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The blue-chip index ended January on a high, but our chartist thinks the downtrend remains valid for now.
FTSE for FRIDAY (FTSE:UKX)
The FTSE 100 index is driving us a bit crazy. For the market to successfully escape the immediate downtrend since last August, it required to close in January above 6,977.225 points. The index closed the month at 6,968 points, close but no banana.
However, during the trading day, the market did exceed the trend, creating the situation where movement now above 6,995 points allows continued recovery to an initial 7,060 points. If exceeded, our secondary computes at a longer-term 7,235 points.
What happened on the final day of January is liable to prove significant.
Essentially, the UK index confirmed the downtrend we've been keeping an eye on is actually valid, if we judge the unwillingness to close the month in "safe" territory as important.
On the chart below, we've shown an inset with market moves literally minute by minute during the session, these confirming the close attention paid to the immediate blue downtrend since August last year.
Essentially, it means our fabulous UK government is not yet free and clear - something most people already suspect.
For an enhanced chance of any near-term relaxation being viable, the index requires to weaken below 6,930 points, this making traffic down to a tame looking 6,907 possible. Our secondary, should such a level break, calculates at 6,856 points.
Neither drop ambition is particularly spectacular, the market requiring below 6,770 presently to break red, once again kicking its way into a zone where the 5,800's awaits on the immediate cycle.
Even then, there's the important matter of the uptrend since 2009 which a present is lurking at 6,380 points and we'd be amazed if it were not to intrude were anything to provoke a severe drop.
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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