A FTSE forecast for uncertain times

With global markets proving hard to read, our chartist attempts to find a direction for the FTSE 100.

FTSE for Friday

Approaching the final week of a grotty month, the FTSE 100 currently behaves like a driver in slow traffic with a police car behind. Exquisite caution is being exercised and we feel it's justified.

Too many things are piling up, suggesting some reversal is almost upon us. This, obviously, would be silly for the driver of the car in traffic!

Thursday proved a bit of a puzzle, literally worldwide. 

Many markets (aside from the Dow Jones Industrial Average) experienced upward triggers yet failed to move. Equally, a few hit downward triggers yet failed to move.

The Dow - desperate to please - hit an upward trigger, achieving initial target. It later hit a downward trigger, also achieving target.

In plain English, it left us painfully aware the market isn't giving away any immediate direction hints.

For Friday, the FTSE is interesting. Weakness now below 7,103 points suggests coming reversal to an initial 7,084 points. If broken, secondary calculates at 7,010 points and hopefully some sort of near-term bounce.

If triggered, the tightest stop looks like 7,149 points. What happens if 7,149 is exceeded?

Initially, a surprise recovery to an initial 7,168 makes some sense. If exceeded, our longer term secondary is at 7,189 points.

In both scenarios, we'd remind the market is proving cautious and we shall not be aghast if the FTSE mimics everywhere else by only chasing initial targets.

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.