FTSE 100 falls significantly during the week only to find buyers

The FTSE 100 fell significantly during the week, reaching down towards the 7600 level only to turn around and form a hammer. The hammer of course is a bullish sign but the shooting star from the previous week offers significant resistance. I think that the shooting star followed by a suggests that we are going to go back and forth, and that short-term range bound trading might be what we see initially, at least until we can break out in continue the longer-term uptrend. When you look at the weekly chart, you can see that we have clearly rallied very significantly and have gotten a bit overextended.

If we break down below the bottom of the hammer, then we could go to the 7500 level, perhaps even lower than that. I think that overall, this is a market that continues to find buyers on dips, and eventually we could break out and go looking towards the 8000 handle. We obviously have a lot of concerns around the world, but eventually I think that people will continue to look at the cheap British pound as an opportunity for exports to continue to strengthen in the United Kingdom. Beyond that, it’s a simple uptrend and I think that we have recently made a “higher high”, signifying that we are in fact still in that uptrend, probably the most important thing to pay attention to. Shorting isn’t something I’m interested in.

FTSE 100 Video 04.06.18