FTSE Forecast October 15, 2014, Technical Analysis

The FTSE as you can see fell during the course of the day on Tuesday initially, but found enough support near the 6300 level to turn things back around and form a hammer. This is the second hammer in a row, and as a result it appears the market is going to find plenty of support in this region. If we can break out and above the top of the hammer, we would be willing to buy the market anticipating a move to the 6560 region first, and then possibly move higher than that. The market is certainly oversold at this point in time, but we also recognize that a move below 6300 house the FTSE breaking down to the 6000 area.

Keep in mind that the Claimant Count Change numbers come out of the UK today, and that of course can have an effect on stocks as well as the British pound itself. Because of that, it appears that sooner or later the market will have to come to grips with whatever the British economy actually is doing, but right now it seems to be more or less just a “sell everything” attitude that we’ve seen around the world that has affected the FTSE itself.

If we do break down, the 6000 level should be rather supportive, but quite frankly it’s only a matter of time before the buyers would step been based upon value as well, and with that we feel that the market should eventually get its footing again. After all, the British economy is better than the European economy, so by a simple proximity we feel that Europeans will put money into the FTSE instead of risking it on the continent as long as things look this poorly.

On the other hand, we break above the 6580 level, we feel that this market will go much higher, probably the 6900 level, possibly even higher than that. It’s almost impossible to tell what’s going, but we certainly seem to be seeing little glimmers of hope when it comes to the FTSE going higher.