FTSE for Friday: can markets end the week on positive note?
17th December 2021 07:43
by Alistair Strang from Trends and Targets
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After another eventful few days, independent analyst Alistair Strang hunts for clues as to possible outcomes on Friday.
There's something quite important happening with the FTSE 100, along with wider markets. On Wednesday, quite a few markets made serious triggering movements which pointed to the potential of serious drops.
For the FTSE, we’d marked 7,189 as a danger point for clients and the UK index stumbled below the trigger, eventually deciding to bottom at 7,166 points. But once the FTSE closed, and we enjoyed the realms of after-hours futures, after 7pm there was a distinct mood change and it almost felt like the markets had noticed they’d opened the doors for some serious drop potentials.
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With miracle movements, the next two hours saw German futures gain 200 points, the Nasdaq 550 points, Wall Street 500 points and the FTSE recovering 60 points. It was all very mysterious but sent a pretty firm message that the markets, despite earlier triggering events, could not be expected to suffer on Thursday.
This belief proved completely correct, aside from the Nasdaq which, alone, managed to unwind all the previous days movements. We’ve absolutely no idea what the Nasdaq is playing at, the behaviour akin to a Golden Retriever after getting its ears cleaned.
Source: Trends and Targets. Past performance is not a guide to future performance
Despite Thursday's positive behaviour on the FTSE, we’re a little concerned as the index has failed to show similar exuberance to other markets. From a near-term perspective, the market requires to exceed 7,275 points to bring movement to an initial 7,305 points.
Our secondary, if exceeded, calculates at a less believable 7,372 points, but it’s worth noting, in passing, such an ambition collides with the Blue downtrend since the start of 2020. If triggered, the tightest stop looks like 7,225 points and always remember, never trust a triggering movement in the opening seconds of the day. Unlike our wayward dog, this sort of thing often bites.
Our alternate scenario suggests weakness below 7,225 risks bringing reversal to an initial 7,207 points. If broken, hopefully the market shall choose to bounce at 7,186 points.
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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