Market Overview: FTSE 100 Futures
The FTSE futures market moved higher last month, with buyers at the MA in a bull channel. But it was not a strong close. The bears want a little more down and might get it to the 100-month EMA. But the tail in March shows buying pressure. There would always be some buyers at the midpoint of that wick and at the MA, so if we go down, it might also have tails below.
FTSE 100 Futures
The Monthly FTSE chart
- The FTSE 100 futures went higher last month in the middle of a bull channel.
- Last month was a bull doji with a big tail on top, so it was a pause bar and a weak entry above and below
- Because the bar closed in its lower half, some computers will see it as a bear bar.
- The bar mostly overlaps with the prior month and is a small trading range.
- The bar touched and then closed above the 20-month MA, theoretically a buy signal for next month.
- Though most traders should wait to buy above a strong bull bar moving up and away from the MA in a bull channel.
- The bulls see a tight bull channel, and the MA acts as support. They know that even if the middle of the channel breaks, the target for the bears is the trendline.
- They expected two legs sideways to down after a bull break of the all-time high.
- The bears see a trading range, and we are reversing down from the top. A reasonable 2nd entry sell signal in the top third of the trading range is a Low 2 or a High 2 (expecting failure.)
- March was a disappointing bar for the bulls, they bought the close and could exit with a profit on their second entry in April.
- You can see they exited in May. We said they would find buyers at the MA, and there were.
- Bears did the opposite – they sold in December. They got stuck and sold higher once they saw the weak bull bar in February and made money when it came back to their entry.
- So if limit bulls and limit bears are making money, we are likely in a trading range or a weak channel.
- Bulls want a bear breakout to fail below and trap the bears under the MA. A wedge reversal and two legs sideways to up.
- The bears see this month as a weak stop entry buy, so it is a better limit order short above.
- The 100-month MA is a bit below, and one more bear month would get us there. That has been a magnet, and we probably need to get back there to pick up long-term buyers.
- Traders should expect sideways to up next month.
The Weekly FTSE chart
- The FTSE 100 futures moved higher last week with a bull bar closing on its high, so we might gap up on Monday.
- It is a High 2 buy signal at the 100-week MA and possible HL DB.
- The bears see a tight bear leg down and a LH DT.
- It is forming a triangle which is BO mode (BOM), and traders are deciding whether the BO above the all-time high needs to be tested again.
- The bears see we formed a lower-high, and the sell-off disappointed the bulls.
- The legs look like legs in a trading range, so disappointment is common.
- It is a better buy, than sell next month – a Micro DB with May and a HL DB with March.
- But it follows a bear climax bar. That kind of bear surprise topically has a second leg – even if it is only one more bar.
- If you bought three weeks ago and you were disappointed with the sell climax – you could get out breakeven.
- If you sold the bear climax, you are disappointed last week. They will probably sell and sell higher to get out.
- If you look at the legs down – this leg is not as steep as the last one – the selling pressure down here is not as strong – that is a problem for bears selling down here.
- They want a breakout below and a MM down to the last October low.
- Expect sideways to up next week, with buyers above the High of last week.
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