FTSE 100: Pinch, punch, first bounce of the month?

Created 30/11/2017 at 21:59FTSE for Friday (FTSE:UKX)

After all these years, we’ve yet to decide if “after hours” futures movements give any indication whatsoever to expect on the FTSE (UKX) the next day.

Our rule of thumb relates to the Japan and Australian markets. If they’ve moved by more than 1.5% in any direction, the FTSE will doubtless follow suit.

Few folk can remain ignorant of the disconnect between the US markets and the UK. In the last five years, we’ve seen a tenuous relationship stretch, then finally break and, nowadays, relying on the Dow Jones to give a clue as to FTSE behaviour is like relying on Boris to give an indication of correct UK policy.

Our reason for this diatribe comes from a plunge in the futures market during the evening of the 30th.

We’re currently indicating weakness below 7,326 on the FTSE should bring a bottom of 7,308 points.

The given threat, if 7,308 breaks significantly, is for continued weakness coming toward 7,233 points as best hope for a real bounce.

The real problem arises in the event of 7,233 breaking as there’s a sodding great chance of the index opting to challenge the bottom of this years rotten trading range, just above 7,100 points.

We’ve a fairly massive “however” regarding the 7,308 thing. This number repeats worse the courgette and we hate being spoonfed the obvious, due to the markets sense of humour.

During November, there were repeated small indications the FTSE intended some growth, along with repeated efforts to drive the index down.

Often, it feels like the market “gives up” this behaviour producing a completely surprise surge in the opposite direction. As a result…

Above 7,410 should prove capable of growth fairly sharply toward 7,470 points. Secondary, if bettered, makes itself known at 7,525 points.

For now, it’s fingers crossed time, along with the hope that any break below 7,308 happens in the opening seconds of the FTSE on Friday 1st December. Generally, our inclination with this behaviour will be to expect near-term growth.

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. 

This article is for information and discussion purposes only and does not form a recommendation to invest or otherwise. The value of an investment may fall. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.

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