Important FTSE 100 levels to watch on 4 June 2018

The FTSE, and talk of gold too. (FTSE:UKX)

We do not often discuss gold in our headline section, other than the odd big picture update due to the price doing something stupid or confusing. Well guess what, it’s proving stupid, confusing, and frustrating currently!

The problem is the downtrend since 2011. In December last year the US dollar price of gold bettered this downtrend, apparently launching the metal into a region where $1,472 was possible.

Unfortunately, the rise fizzled out at $1,365 with the shiny stuff now needed actually better $1,375 before we dare feel a long position to be a bit of a ‘no brainer’.

In fact, since December last year, the price of the metal has dribbled down the trend line, almost with the manic control exerted against some AIM shares prior to them receiving a final stuffing.

Of course, some AIM’s miss the final ‘coup de grace’ and instead will abruptly accelerate higher. We would stress, quite firmly, in the case of gold we cannot risk trusting it until the price betters $1,375.

So, will gold bounce and if so where?

Currently trading around $1,292, it’s regarded as being on a path toward $1,259 where a bounce can be hoped. A major issue appears should $1,259 break as it’s easy to calculate a further 100 dollars of misery.

As for the FTSE (UKX), the market continues to respect the red uptrend since March and now requires to break 7,660 to suggest some trouble’s ahead.

Such an event remains pointing at coming weakness to around 7,600 but this is where is gets a little dodgy.

We’ve a problem if 7,609 breaks as we shall view a cycle to 7,500 as commencing. And then, we shall need re-run the numbers.

Of course, it’s easy to attach misery to expectations, simple due to the media only broadcasting negative news – or a negative spin on any news. A glance at the gold chart above tends to suggest any suspicion of money heading to gold from equities is currently misplaced.

The FTSE closed the first day of June at 7,701, only needing above 7,747 to enter a cycle toward an initial 7,820 points. If bettered, we can calculate 7,875 as our next ambition. And then, we will also re-run the numbers!

Source: interactive investor         Past performance is not a guide to future performance

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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