Written: 14/12/2017 at 23:43
FTSE for Friday (FTSE:UKX)
Sometimes we wonder at our logic. For instance, the FTSE 100 (UKX) is now regarded as probably going up, but from the point at which it closed Thursday, it’ll probably go down a bit first. Closing the day at 7,448 points, we’ll not be aghast to witness weakness toward 7,431 points, then a bounce.
Visually, it seems the 7,431 level shall prove important, one of these “must bounce” levels if only due to a developing risk of trades below such a point allowing a potential 90-point droop. In itself, this is not entirely calamitous, the red line on the chart below currently indicating the FTSE needs below 7,270 to justify full scale panic.
In an ideal world, we’ll expect the FTSE to therefore open Friday around 7,445 points, perhaps dribble down to 7,431 or so, then bounce. This, in theory, allows a long position to be taken with a stop loss point placed a tad below the 7,431 point.
This is where we need get all “Mystic Meg”, due to projecting growth from a point not yet achieved. Any bounce capable of bettering 7,485 calculates as being taken very seriously, movement toward 7,497 being our initial ambition. Secondary, if bettered, comes along at 7,514 points and places the market in a hellishly strong position in the run up to Christmas.
Of course, they say not plan survives contact with real life, so what happens if the FTSE does not drop at the open?
If we play with the scenario of the FTSE being opened slightly up at 7,485 points, our inclination will be to go back to bed. Unless the index is willing to better ‘blue’ on the chart, the day is liable to be a waste of time, fluttering between the 7,431 point and the blue downtrend.
Have a good weekend.
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.
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