FTSE for Friday: chart analysis and a theory
Independent analyst Alistair Strang discusses a stock market conspiracy theory before looking at potential for the blue-chip index ahead of the Bank Holiday weekend.
23rd May 2025 08:07
by Alistair Strang from Trends and Targets
This month, May, is proving quite boring for the FTSE 100. The first two weeks produced a rise of just 34 points, along with an overall trading range of around 140 points. Week three started with a surge into the 8,700 range, then the market opted to go to sleep again with this week giving movement of a staggering 39 points. All things considered, despite plenty of world and political events, the market is proving pretty dire, though the retail bank sector is still looking interesting.
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We've a theory, one which we are uncomfortable with and freely admit is probably daft, kicking open the conspiracy theory doors!
Our theory revolves around a problem number of 9,700 points. According to conventional logic, the FTSE is now trading in a zone with a target at 9,700 points or so. It's certainly a pretty massive jump from current levels and market behaviour tends suggest the 'gods in charge' may have noticed what will happen, if "they" opt to let things run free.
As we said, it's an absurd suggestion, one which accepts there may be a controlling influence working on the UK index. Obviously, this isn't the case as shown by the Covid-19 drop during late February/early March 2020, with complete independence and absolute coincidence, markets everywhere decided to relax by around 35%. This was a remarkable show of agreement among institutions and traders worldwide, all reaching the same conclusions, at the same time, in their own country.
Usually, we've noticed the market gods react in utter panic when they stumble across a respectable share with a price about to head down the toilet. In these instances, there's typically a panic direction reversal which is usually presaged by a surprise Gap Up in a share price, followed by a period of remorseless rises to get a share price out of the lemming zone.
In the case of the FTSE 100, we're genuinely not sure of what to propose. Unlike US and European markets, in 2023 the FTSE opted not to follow other G5 trends, instead trading in a fairly flat fashion until the start of 2025, when the market gods decided it was now time for the FTSE to join the rest if the civilised world in heading upward.
If it is indeed the case these mythical market gods are in a panic, the next phase should be a contrived excuse for sharp market reversals to seriously slow things down.
More immediately, the FTSE 100 index apparently needs below 8,688 points to trigger imminent reversal to an initial useless 8,673 points with our secondary, when broken, at 8,632 points and a hopeful rebound.
However, one of our big rules suggest we should anticipate some gains as above just 8,740 should now trigger gains to an initial 8,787 points with our secondary, if beaten, at 8,812. This secondary level is liable to push a panic button, should our silly theory that the market is trying to inhibit positive index movement.
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.
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