Something interesting is due with the FTSE
6th August 2021 09:39
by Alistair Strang from Trends and Targets
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Our charts expert takes a look at the where the FTSE 100 stands as the week comes to a close.
Absolutely nothing to do with the markets; anyone who's ever read 'Bike' magazine will doubtless notice a 50th Anniversary edition in newsagents.
For years, the first component read of "Bike" was the Ogri cartoon on the back page. This "Anniversary***" edition completely omits any mention of their best bit!
Traditionally, we always enjoy a moan at the start of August, thanks to the markets taking a mental holiday in addition to a literal one. This year feels a little different, the FTSE 100 Index proving well behaved with a trading range, so far this month, of just 80 points.
Some days, there would be a burst of sudden excitement, a mood which quickly waned with the realisation a movement of just 5 points can look pretty major on a chart, when the market had spent a few hours exploring a 10 point range.
A five point jump or drop obviously paints a vivid 50% picture until you zoom out to view the entire day. The now familiar reality of nothing actually happening once again hits home... Sometimes, we suspect the markets do this, just to lull folk into a sense of false security, perhaps encouraging us all to turn our backs and miss some real excitement?
We're pretty comfortable something interesting is due with the FTSE. The only problem is, will the market take all of August to make the movement or shall it occur when a fit of boredom has driven us all outdoors to count the wheels on the car!
Perhaps it shall be the case the US Payrolls Numbers, due on Friday 6th August, will be sufficient to force an irrational movement from the FTSE, making it essential we watch Bloomberg or CNN at 1.30pm.
Regardless, the immediate situation is pretty straightforward. Above just 7143 points should harbour ambitions of a visit to 7198 points.
If bettered, we'd hope for a visit to 7235 points which will represent a new "high" for the index, following the market being trashed at the start of 2020. If triggered, the tightest stop is suspiciously attractive at just 7100 points.
What are the threats, if 7100 points breaks?
Initially, we suspect reversal to a pretty tame 7077 points with secondary, if broken, our secondary is at 7055. This represents a level we'd suspect a bounce, doubtless due to the FTSE intending remain within its soporific journey through the month.
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.