Interactive Investor

FTSE 100: Where the real danger lies

After another rollercoaster week for the City index, our chartist has a new forecast.

6th March 2020 08:39

Alistair Strang from Trends and Targets

After another rollercoaster week for the City index, our chartist has a new forecast.

FTSE for Friday (FTSE:UKX) 

At present, financial volumes through London are pretty useful, broadly speaking up 50% from the same period last year. The Brexit hiatus shall forever be ingrained in memory and we've been seeing levels of trade increase, since last December's election brought what passes for clarity.

To focus on dangers, the other day the FTSE 100 hit 6,460 and bounced.

We're tending to regard this as pretty significant as the real danger now points at weakness below this level now calculating with an initial 6,243 points with secondary, when (not if) broken at 5,858 points.

These "big picture" numbers are broadly similar to our last set of calculations, suggesting the pace of movement has stabilised over the last few sessions - despite some utterly mad swings.

Another detail, one we're not comfortable with, has been the behaviour of the FTSE in relation to red on the chart.

Last Friday, the index closed below the trend, a faux pas rapidly corrected. We shall be extremely alarmed now with closure below this level, presently at 6,685 (roughly).

Source: Trends and Targets      Past performance is not a guide to future performance

Nearer term, the FTSE is as complicated as usual. Weakness now below 6,656 looks capable of reversal to an initial 6,615 points.

If broken, secondary calculates down at 6,533 points.

The other side of the coin comes with movement now above 6,724 computing with an initial ambition at a useless 6,743 points.

In the event its exceeded, our secondary works out at a more interesting 6,818 points.

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. 

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. 

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