FTSE for Friday: more surprises in holiday season?
Much lower trading volumes can increase volatility, as we've seen already this month. Independent analyst Alistair Strang searches the charts for clues about future movement.
16th August 2024 08:01
by Alistair Strang from Trends and Targets
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August certainly isn’t going as expected. Our conventionally belief “the B Team” are running the markets during the holiday month certainly isn’t looking very concise this year and final confirmation shall come if the FTSE 100 closes above 8,400 points and the immediate downtrend.
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Volumes in London are certainly as low as expected at roughly two-thirds of that experienced during June/July, but regardless of this detail, dribbles of positive news are serving to push the FTSE upward.
One interesting facet about very recent index value movements in Europe and the USA is a fairly strong suggestion we should anticipate some upward movement of some strength.
While this shall doubtless be due to relaxation of interest rates, our inclination is to expect such a miracle in September rather than for central banks to unleash such an occasion before “the A Team” come back and resume control of the markets.
For the FTSE 100, we’re inclined to view movement below 8,300 points as holding some danger, perhaps capable of kicking off reversals to an initial 8,246 points with our secondary, if broken, calculating at 8,203 points and the hope of a bottom.
While such a level of movement isn’t particularly tragic, we’ve a suspicion some effort shall be made for the UK market to avoid troubling the Blue downtrend on the chart – for the time being. If triggered, the tightest stop loss level looks like 8,355 points.
Alternately, if things intend to move positively for the FTSE, above 8,368 points looks capable of triggering gains to an initial 8,428 points, along with a chance of the index actually closing above Blue at 8,400 points. Our secondary, should 8,428 be exceeded, works out at an astounding 8,645 points. For this reason alone, we strongly expect 8,428 to provoke some reversals, if achieved.
Have a good weekend.
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.
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