The FTSE 100 has gone back and forth during the course of the trading session on Thursday as we are sitting just above the 7000 handle. The fact that the market has simply done nothing suggests that we have nowhere to be. Nonetheless, it is worth noting that we have been in an uptrend and of course the United Kingdom is in the process of reopening. The 50 day EMA is sitting just below the 6900 level and has offered quite a bit of dynamic support. Furthermore, when you look at the trendline of the ascending triangle, it extends out right along with the 50 day EMA.
If we were to break down below the 50 day EMA, it could open up a move down to the 1600 level, which is roughly where the top of the ascending triangle sits. Breaking down below that level could open up the possibility of a move down to the 200 day EMA, which is currently at the 6600 level. On the other hand, the market is likely to go looking towards the gap above, perhaps even the 7200 level based upon the fact that the ascending triangle measured for that type of move.
Ultimately, this is a market that has been in an uptrend and as a result it does suggest that buyers will continue to come back in on dips, as they find value. After all, the market certainly shows a lot of positivity and therefore I do not have any interest in trying to short this market. If we were to break down below the 200 day EMA, then it is likely that we would see a significant selloff longer term. Nonetheless, I do not think that it is anywhere near a scenario where we need to be cautious at this point. I like the idea of finding value as it occurs, but I would not be jumping in with both feet considering that the fact that it is choppy but given enough time I do think that it is only a matter of time before we reach to the all-time highs, and beyond. In general, I think that you will probably be better served to simply build up a position over time, as we have seen a lot of noise, but the natural proclivity overall is higher.