- During my daily analysis of European indices, the FTSE 100 has caught my attention as it looks like we are still stuck in a massive consolidation area.
- The 8500 level underneath has been important, and it has proven itself to be supportive as we had seen during the Monday session.
- Now that we are going back and forth, it looks as if the buyers could very well come back into this picture and try to take advantage of cheap contracts, but ultimately this is an uptrend, and you need to respect that.
On pullbacks, I think we have a very likely buying opportunity, and I think that extends all the way down to the 8350 level underneath. The 50 Day EMA is racing toward that area, and I think that will continue to be a technical indicator that a lot of people would be paying close attention to. On the other hand, if we were to break above the 8600 level, the market could go to the 10,000 level over the longer term. After all, we have seen the FTSE 100 scream to the upside before going sideways as we have over the last couple of days. I think we are just simply digesting some of the momentum, which is something that you could probably say about most indices.
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The technical analysis is obviously bullish, and it’s possible that we could see a move to the 9000 level based on the “measured move” of the potential bullish flag that we are forming. Either way, I don’t have any interest in shorting the FTSE 100, and with the British pound weakening the way it has, I think we have a situation where it’s likely that stocks in the United Kingdom may pick up on the idea of exports being cheaper. I don’t know that I like that idea, but ultimately it is a real possibility the traders will start to think along those lines, because quite frankly that’s how they been conditioned to think over the last 15 years or so.
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