The FTSE 100 continues to see a lot of choppiness going back and forth as we have been trying to decide what to do about the 6600 level. Furthermore, the 50 day EMA has turned to the upside and still offer support. That being said, I think the market is simply trying to find its footing so that we can go higher. After all, the FTSE 100 is of course highly levered to the UK economy itself, which of course is been boosted by the idea of more vaccinations in that country than many of the other G-10 peers. That being said, the market also has to worry about whether or not the global growth is going to pick up later on this year.
The UK economy was bashed due to Brexit, but it now appears that the United Kingdom may have accidentally walked into the lead when it comes to that part of the world, because quite frankly the European Union has not been able to vaccinate large portions of its population, while the UK has been able to do so should send this stock market higher based upon relative value.
I do believe that eventually this market will go higher, but we have seen a lot of noise due to bond yields rally around the world. Gilts in the United Kingdom have been showing higher rates as of late, so just like in the United States, we have seen stock markets get a bit of bearish pressure as traders will have to rebalance portfolios. Ultimately, the market is in a bullish run though, and I think if we can break the highs from the previous week, it is likely that the FTSE 100 will continue to go higher. The size of the candlestick is somewhat telling, but it is also worth noting that the last couple of candlesticks have not been violated, so it still looks as if there are buyers underneath. Because of this, I do think it is only a matter of time before we see a bit of a turnaround. In general, I think this is a market that is going to be very difficult to deal with, but the only real trade will be to be buying short-term pullbacks as we have plenty of bullish momentum over the longer term. I think that we are eventually going to go looking towards the 7000 handle.
