FTSE 100: What now as Brexit confusion reigns?

As Brexit Day looks likely to shift again, our chartist discusses implications for the blue-chip index.

Thursday appears to have produced a fairly important milestone in the Brexit saga, an episode of UK history which deserves its own theme tune. Perhaps a smart producer will hijack the "Jaws" tune and introduce real drama.

The milestone? For me, it was the day I completely lost any understanding of what's going on politically. In doing so, it's possible I joined an entire parliament full of politicians in the land of clueless!

On Thursday, the FTSE 100 index should have reached 7,333 and no higher. We'd a fairly big rule demanding some hesitation at the 7,333 level, but the market decided it had better ideas. It peaked at 7,338 before a very slight fall back. In doing so, it introduced an argument which favours movement now above 7,339 as being capable of 7,358 next. If exceeded, our secondary calculation comes in at a less likely 7,394 points.

To be honest, if anyone figures out what the politicians are up to and decides it's good news, the index could easily accelerate to 7,474 points, a point where once again we'd expect some serious hesitation.

Assuming the market nudges beyond 7,339 points, the index would need slip below 7,292 points to give the first indication it's all going wrong. This makes for a reasonable stop loss level, given the potential collection of points.

If the index does slip below 7,292, this risks triggering weakness down to an initial 7,252 points. If broken, secondary calculates at a trend testing 7,195 points.

This week, every single session has been prefixed with market movements suggesting the next day "almost must" move in a specific direction. As a result, the following day generally enacts the precise opposite of anything demanded by logic. It all leads to Friday, a day which clearly suggests another 'up' day is in store for the FTSE. Therefore, we shall not be surprised to witness relaxation to 7,195 commence. Idiots appear to have taken over the asylum – or Westminster.

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.

Alistair Strang is a freelance contributor and not a direct employee of Interactive Investor. All correspondence is with Alistair Strang, who for these purposes is deemed a third-party supplier. Buying, selling and investing in shares is not without risk. Market and company movement will affect your performance and you may get back less than you invest. Neither Alistair Strang, or interactive investor will be responsible for any losses that may be incurred as a result of following a trading idea.