Interactive Investor

FTSE for Friday: what's in store after election result?

Independent analyst Alistair Strang talks through his experience of election night and how it might impact the FTSE 100 index today.

5th July 2024 07:41

by Alistair Strang from Trends and Targets

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We tried something new on Thursday evening, watching FTSE futures in conjunction with results being released in the General Election. So far (early hours of Friday morning), the exercise has been quite fascinating, currently with glimpses of panic at the rate Futures were climbing. While writing this, FTSE futures were just gapped down by 15 points in what looks like a visible attempt to slow things down.

Of course, this isn’t a real problem, probably quite the opposite, as it reduces the chances of the FTSE being spiked up massively at the open on Friday morning. This usually creates a situation where within 90 minutes or so, the market starts to rewind the effects of the spike unless the index is gapped up at the start of the spike.

For instance, should the opening second of trade gap from 8,241 points to 8,255 points, immediately followed by gains to around 8,265 points, there shall be a very good chance of the day being quite positive. But should the market opt to show the first seconds of trade with trades to 8,265, our confidence for a good day will be quite damaged. It can be assumed we expect the FTSE to open the day around 8,265.

For the FTSE, it looks like above 8,265 points could trigger movement to an initial 8,301 points with our secondary, if beaten, calculating at 8,367 points.

If triggered, the tightest stop loss level looks reasonable at 8,225 and, given movement such as this shall place the UK index in a region where a long term cycle to 8,465 should commence, that’s a reasonable number for a stop.

Our converse scenario, if things decide to go wrong, needs the index to fall below 8,207 to ring alarm bells, risking triggering reversal to 8,158 with secondary, if broken, at 8,086 points.

Have a good weekend. 

ukx

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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