The FTSE 100 initially tried to rally during the week but found enough resistance above the turn things back around and form a massive shooting star. That of course is a very negative sign, and I think that the market is ready to start falling again. I anticipate a move to at least 7500, and perhaps even lower than that. This is a market that has been overbought, so it makes sense that we get this pullback. I don’t necessarily think that it’s time to get in with both feet to the downside, I just think that the market has gotten far ahead of itself and it would make sense for return to lower levels. I think that if we break above the top of the shooting star, then the market would test the 8000 level, and clearing that level would send this market much higher.
I believe that the market continues to show bullish pressure longer-term, but every once in a while we need to pullback to offer value to get more people involved. Ultimately, this is a market that I think continues to find plenty of buyers, especially as the British pound has fallen drastically. The idea of cheap British exports should continue to be a main driver of this market to the upside and I think it’s only a matter time before that resumes. Short-term selling opportunities to present themselves though.