Friday was a quiet day in terms of news, the US markets were closed so today we could see some action as US traders return to their desks. Meanwhile the IMF has warned that it could cut global growth forecast later this month, citing weak investment spending and risks to the US economy.
The US economy has been in focus recently, investor have been pushing the S&P to new highs on the back of improving fundamentals. But today we could see some profit taking in the US, the S&P 500 has completed a five-wave rally and prices are just below an important resistance line drawn from the highs in May 2013 and December 2013.
The FTSE 100 is in the midst of a decline that started on 15 May. The index does not look like it is in a decline because it has rallied strongly in the last ten days. But it is still trading below the high on 15 May so technically, the index is still in a decline. The high on 15 May [6895] marks the start of a complex correction currently in progress.
The BTI (sentiment indicator) turned up on 3 July and is still rising. The second timing indicator, 34-day BTI, is still declining (non confirmation). When the two indicators are not confirming each other, sentiment is neutral.