The FTSE 100 fell rather hard to kick off the trading session on Monday, reaching down towards the 6600 level just like we did on Friday. Furthermore, we also followed the attitude of Friday by turning around and forming a hammer, which is a very bullish sign. At this point, it certainly looks as if there are plenty of buyers underneath that are willing to pick up the FTSE 100 if we get an opportunity. The FTSE 100 continues to look at the 6800 level is a major barrier, but it certainly looks as if the market is going to try to get back to that area and take it out.
This market has formed three hammers in a row, so that is a very bullish sign, and I think that a lot of traders out there will be paying close attention to this market if we pull back towards the 6600 level as well. If we can break above the 6800 level, then the market is very likely to go back towards the highs at 6900, and then eventually the 7000 level over the longer term. That is my target, but it is going to take some time to get there to say the least.
The British economy of course is going to continue to be one that a lot of people have been paying close attention to for quite some time, as we have seen Brexit coming go, which of course was the only thing that people were talking about for three years. Now that we are beyond all of that, we are looking at the British economy through the lens of the recovery. The United Kingdom has vaccinated more of its population than a lot of its competitors, so therefore there will be a bit of built in strength in the economy, and then by extension the FTSE 100 itself. However, there are a lot of concerns about the reopening trade globally so that is working against the FTSE.
All things been equal though, we are very much in an uptrend and I do not have any interest in trying to short this market, but if we did break down, I would be looking to buy again somewhere closer to the 6500 level. After that, the 200 day EMA is just below, and it is not until we break down below that that I would be concerned.
