The FTSE 100 rally started on 14 April, from the low of the range to the top of the range below 6867, the rally has been driven by positive sentiment. Investors have ignored the slowdown in China and the crisis in Ukraine. Instead they have focussed on the good economic numbers and the earnings reports.
Even the latest number from China are improving. Yesterday's Chinese trade balance was better than expected but German industrial production was lower than expected. Initial jobless claims were lower than expected and this gave a boost to the market. But the real driver was the prospect of lower interest rates in Europe after comments from Mario Draghi at the ECB press conference.
Despite all this, there is a sense that the bull market is tired. The US indexes have yet to break to new highs and in the UK the FTSE is still in a long sideways range. The 13-day BTI is near overbought, current reading is 298, a move above 400 is overbought and this should coincide with a top.
