FTSE
We broke 7346 yesterday, but only managed to get to 7350 before the sellers came charging back into the market driving us lower...After the close we went even further down to 7288 and we are currently below 7300, only just, but below there....
The divergence we have been seeing on the charts is still there....and the rejection of the higher levels does make you question is this the top now before the fall...I think these current market conditions are going to push FTSE lower...The question is where to...Now if this is to be a sustained uptrend the move lower should be quite small..I would think 7261 to 7244...This is from the previous yearly high and obviously the 200 day M/A...The last time that FTSE made a move lower it did not take very much for the indicators to get to oversold conditions...we moved from 7261 to 7042...a total of 218 pts...this time we have moved up 308 pts...so we have had a very good rally...
Now we need to see if this divergence can bring us lower...The market obviously did not like it past 7346 and this is where we need to concentrate....If we are to carry on higher...we have to hold the designated support...we lose that 200 day M/A on a close basis and we are looking to be in trouble....There would be a case of the market losing more ground to 7190 possibly the 7168 area...Given we are so overbought and diverging I would suggest selling into rallies... and holding shorts unless we take out 7360...
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