Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

FTSE 100 Is Struggling Above 7530

Published 01/11/2017, 11:08
Updated 17/03/2024, 07:38

The FTSE 100 was going sideways until today, the rally today could be the final wave up. But getting the right level to go short won’t be easy because the pound could be volatile between today and the end of the week. This will affect the FTSE which means and depending which way the pound goes, the decline in the FTSE could start early or from higher levels.

Tonight at 6pm we have the FOMC statement and interest rate decision. Tomorrow at 12:00 we have the UK interest rate decision, finally we have the US nonfarm payrolls Friday at 12.30. As you can see all these events are major news for the pound, we could see some sharp moves up or down in GBP/USD until the end of the week.

GBP/USD has rallied since last week, it’s not clear what the pattern is. But the fact that it has rallied above the 26th October high increases the odds that we have a larger upward corrective wave. This means we are in wave C up and this move will end above 1.3338 which is the top of wave A. As you know my long term forecast is down, so if GBP/USD is in a larger upward corrective wave, the decline will resume from an area near 1.3380.

US markets remained strong during October, usually October is not a bullish month, but this year’s earnings reports beat estimates and the index rallied. We are now entering a bullish seasonal period, the last two months of the year are generally bullish for stocks. This does not mean markets won’t decline, we have seen some sharp declines in November/December in the past. After the strong run in the US markets since the summer, there is a good chance markets will decline in November/December this year.

The S&P 500 is completing the final move up of the bull market while the FTSE already peaked in June and is unlikely to make a new high, unless the pound collapses. I can’t be 100% sure the June high at 7599 marks the top of the bull market because the decline from that level to 7437 is an expanding diagonal, this pattern normally is a pause in the uptrend. The reason I assume 7599 is the top is because the S&P is about to top out. If the S&P turns down the FTSE is unlikely to rally above 7599. The recent high at 7565 was probably the top of a second wave, the next move will be a third wave down.

FTSE 100

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.