A break above this FTSE 100 level opens door to new high

FTSE for Friday (FTSE:UKX)

Sometimes, the utter boredom inflicted by the market leads one down a strange path. Thursday was a case in point, the morning session used productively by figuring out the lead guitar bit of Girls Aloud tune, “Love Machine”.

Only once note perfect did the “why” question rear its head?

After all, in this day and age, there’s Twitter if needing an excuse to waste a morning. Or Reddit, if wanting a smile and a black hole several hours deep.

But playing Girls Aloud defined an all new level of idiocy, especially when several tons of logs await being chopped into firewood. Of course, it’s all to do with grandchildren, a pending Xmas invasion, and their dodgy taste in music.

But yes, the FTSE (UKX) was seriously boring on Thursday. The funny thing was, we’d been speculating a bounce from 7,292 points, but the lowest achieved was 7,314.

Perhaps this indicates some strength, perhaps they day ran out of time. If the markets behaviour this week remains true to form, should the FTSE open down around the 7,300 point level, it would make some visual sense to anticipate a bounce.

Key shall be the market bettering 7,360 points as this opens the door for 7,385 and an new December high. This will actually be pretty important, allowing a secondary of 7,412 points along with a stumble of some sort.

What happens should the index make it below 7,292 points?

Reversal to 7,235 makes a lot of sense and hopefully a proper bounce. The consequence of 7,235 breaking is quite grim as we can calculate a further 100 point drop.

If triggered, the sanest stop above 7,292 comes in at 7,360 but it’s worth remembering the market did not drop to this level on Thursday and if our suspicion of strength is correct, short positions are liable to underperform.

Finally, it’s US Payrolls day, perfectly capable of screwing everything up at 1:30pm. Be warned.

 

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, Shareprice, 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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