Bearish signals for FTSE on the week and in each of the last 2 days have been confirmed, investors selling futures to initiate October with a loss of 200 Pts from Wednesday’s 6594.0 top. A near 500 Pt sell-off since September’s 6875.0 high (6907.5 on Sep) has left daily signals for sentiment oversold and trading towards the 2014 base posted in February at 6344.5, so bounces have to be expected and realistic intraday stops are becoming increasingly difficult to place.
However, although a bounce into the close is probably temporary, it has improved shorter term signals, so with this in mind, but with the call clearly counter-trend, the outlook for Friday is to buy cautiously on the open and at 6420.0, with a stop loss at 6397.5, yesterday’s low. Targets are to 6487.5, a 38% recovery to the last 3 day losses, 6515.0, a deeper 50% correction and 6531.0, yesterday’s high trade. 