Trading strategies for FTSE 100 and bitcoin
Our technical analyst's target for bitcoin has been reached, but what does he think about the FTSE 100?
10th May 2019 07:05
Our technical analyst's target for bitcoin has been reached, but what does he think about the FTSE 100?
We've some puzzlement about the price of gold – and bitcoin! Conventional wisdom used to suggest, when markets relax, gold would strengthen. However, weakness since late April has seen the price of gold essentially flatline. But bitcoin has reached our target, growing 20%! Is bitcoin the new gold?
It's funny but when searching for images relating to bitcoin, invariably graphic design people opt to make the fake coin look like a gold coin. And now, when we witness markets such as the DOW, Germany, FTSE 100 index, and even Japan relax, it's against a backdrop of bitcoin strengthening.
If this is the case, there's a pretty fair chance something interesting is about to happen.
Our last report against bitcoin postulated the $6,000 level as pretty important. In the last few weeks, the price has moved from the 5,000 mark to the 6,000 level and our usual logic suggests some hesitation in bitcoin at this point. At time of writing, it's at 6,065 and we'd been arguing for 6,034 – close enough! But the big question we're asking is simple;
If bitcoin hesitates, will the markets show recovery?
For this (potentially daft) theory to be correct, we need to see the FTSE 100 exceed 7,234 today, Friday. This triggering movement should permit recovery to an initial, utterly unimpressive, 7,244 points. Perhaps more useful, our secondary if such a level bettered, calculates at 7,272 points. If triggered, the tightest stop is 7,192 points – yesterday's low.
As always, we've a converse movement scenario.
Below 7,192 now allows for 7,180 points and hopefully a realistic bounce. There's a big problem awaiting if 7,180 breaks as our next calculation allows for a bottom at 7,085 points. If triggered, the tightest stop is at 7,244 points.
Have a good weekend. For us, it's paella time and the Spanish Grand Prix!
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.
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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