FTSE for Friday: strong end to a great week for Top 100?
12th November 2021 07:38
by Alistair Strang from Trends and Targets
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The immediate situation for the FTSE 100 is quite exciting, believes independent analyst Alistair Strang. He also looks at prospects for the gold price.
The FTSE 100 has enjoyed an extraordinary week, often experiencing gains while other markets floundered. Perhaps the days of the FTSE catching flu, when everyone else has a mild cold, shall be a distant memory.
London is certainly very close to challenging the downtrend (blue) since 2018, also gathering sufficient ammunition to make an attempt at the pre-pandemic drop level around the 7,500 point mark.
We do anticipate some market hesitation, should such a level be challenged, as this has tended to be the case with other markets. The FTSE will require to actually close a session above 7,535 to convince us it’s intending break for new highs.
The immediate situation is quite exciting, suggesting above 7,395 should make an attempt at 7,475 points next. If bettered, our secondary calculates at 7,558 points. If triggered, the tightest stop is slightly ridiculous at 7,356 points, almost ensuring we’re cynical as the Risk/Reward balance is uncommonly generous.
Source: Trends and Targets. Past performance is not a guide to future performance
Visually, we prefer advocating 7,320 points as a stop level, along with a strong warning to be extremely careful, if any upward movement is an upward spike in the opening second of trade. After so saying, Thursday pulled such a stunt, the market actually gapped up, then spiked thereafter.
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Our favourite rule of thumb is to utterly distrust an opening spike unless it is exceeded within the first 90 minutes of a session.
If things intend to go a little wrong, below 7,356 points suggests the potential of weakness to an initial 7,340 points. If broken, our secondary calculation works out at 7,261 points and hopefully a proper rebound.
Gold
Just over a month ago, we advanced a scenario for weakness on gold, the chart also highlighting gain potentials. The weakness didn’t happen, instead the metal has strengthened to our initial target of $1,862.
Our analysis focussed on the drop scenario, only the chart giving recovery potentials. Now that the metal has exceeded our initial target, we need to run the numbers again.
We’ve established a new trigger level for further growth at $1,873. The immediate situation suggests growth above such a level should expect further strength to an initial $1,900. If bettered, we expect some hesitation at the $1,947 level.
We’ve shown some potentials from the Big Picture on the chart below, arguments demanding that $2,100 should be possible eventually. In this instance, our intention is to revisit gold should $1,947 make an appearance.
Source: Trends and Targets. Past performance is not a guide to future performance
If gold now intends a bit of a meltdown, the price needs below $1,813 to suggest concern, allowing weakness to an initial $1,794 with secondary, if (when) broken at $1,770 and hopefully a proper bounce.
However, for now we fear the narrator for ‘Gold Rush’ on telly shall once again, be patiently explaining how the price of the metal is making mining profitable.
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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