FTSE - Mind The Gap

FTSE - Mind The Gap 

FTSE opened weak this morning due to the overnight sell off in Oil which put pressure on all equity markets. On the cash open it was sitting just above Volume support in the 6220-5 region and was instantly sold. Most (myself included) would have been expecting and playing for a gap close from Tuesday at 6204 or 6212.5 depending on whether you used the day’s high or days close. It got so close but twice failed to fill it which of course leads to a lot of shorts in the hole. As you can see the move after was pretty straight line into Friday's gap where it has so far stalled. When a market gets so close to important levels but can't tag them it often leads to a violet move in the opposite direction as traders will be holding on looking for that level to trade. Keep this in mind in the future. Going forward I would only want to hold longs if we can hold above 6290.
 

Stoxx at key area 

The Stoxx got to a key area last week before falling back slightly and of course today's gap has seen it lower still. So far though it has made a decent recovery but as we all know it's where the market closes that matters. I think going forward things are pretty simple; if we can get back above and stay above last week’s highs then the immediate term outlook is bullish, failure to hold above here and shorts seem the better play. Initial targets on shorts would be 2905-25 which was decent support throughout March. 

Spoo weekly all about the trend lines baby 

Hard to make a bear case for the Spoo on a weekly scenario at the moment (other than the obvious 'it's come too far too quickly' arguments). However the down trend from the all-time highs marks a key line in the sand for me. Any close back below here marks a false break in my book and we should then start to roll over finally. That's still a big 'if' at the moment but something to keep an eye on. 2026-34 still marks very key support below which will need to see a close below if we are to have a much more protracted pull back.