Market Overview: FTSE 100 Futures
The FTSE futures market went always in short on the weekly chart, so we might pull back briefly next week. We have competing trend lines. Which will win? Currently, it is better to be short or flat. Some traders will be buying below the low of the bull spike and scaling in lower. Other bears are waiting for a pullback to the MA to sell again. It is still a triangle and a BOM pattern – 5 reversals – so most traders should wait for something clearer.
FTSE 100 Futures
The Weekly FTSE chart
- The FTSE 100 futures on the weekly chart went always in short with a bear bar closing on its low, so we might gap own on Monday
- It is the second consecutive bear bar closing below the MA, so that will encourage stop-entry bears to take a shot at 7000.
- The market reacts to clarity – usually by pulling back, so next week, we should reverse back to the low of the prior week’s bar to let counter-trend traders out.
- The bulls see a wedge bottom, a High 3 buy setup at a longer-term trendline.
- The bulls might see a higher low major trend reversal after breaking the bear trend line, and they expected two legs sideways to down to correct.
- But the bear move is surprisingly strong. It might need another leg itself.
- The bulls want the leg to be a failed breakout and reverse for a triple bottom. We are still in a triangle.
- The bears want one more bar to seal the deal closing below the range. The problem is this triangle, which makes swinging difficult to do. Most traders will BLSHS and take quick profits.
- The bulls needed to do more above the MA on Oct 9th. We didn’t trigger the buy signal, a sign of strong bears.
- Some traders will see the trading range and decide it is too low to buy. That makes me believe it has more down to go.
- There were 4 bull bars in the bull spike, so expect buyers below the lows at 7200.
- If we break out of this range, it could mean a test of 7000.
- We are always in short – so traders should be short or flat. Expect sideways to down next week after a pullback.
The Daily FTSE chart
- The FTSE 100 futures was a big bear bar closing on its low on Friday so we might gap down on Monday.
- It is a pair of good bear bars after a set of 3 of them. Strong bear spike and channel and has a shot at breaking below the TR.
- We closed the open gap, a sign of trading range price action. It leaves only one gap above – bearish.
- Bulls will argue about it being a trading range, and that it was a vacuum test of support.
- But look at the chart – how directional are the bear moves vs the bull moves? They are faster and more aggressive.
- The bull bars at the top of the range have tails. The bear bars at the low of the range close on their lows.
- It was a bear microchannel until the Tue and Wed. There was a high probability sell above the high of those bars. But large risk.
- Bulls want a High 2 buy setup low in the range after triggering a High 1 last week. It was a good close for them above the high of a prior bull day.
- Bears might expect a MM of the prior bull spike, but before drawing it in, let us see if we can get out of the TR – as 80% of breakouts fail in TR. That is inertia.
- Expect sideways to down next week or at least another leg after such a strong breakout and FT
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