FTSE 100 Big Triangle at 100-Week MA

Market Overview: FTSE 100 Futures

The FTSE futures market moved higher into the apex of a larger triangle pattern on the weekly chart. It is breakout mode (BOM). Traders can be long or short, but most should be flat right now. Bears want a break below and a MM down. Probably sellers above the doji. Bulls want a test of the LH and breakout above the DT for a MM up.

FTSE 100 Futures

The Weekly FTSE chart

• The FTSE 100 futures was a small bull doji at the apex of a triangle last week.
• We are sitting right between the 100-MA and the 20-MA as traders decide where we will go.
• It has been interesting lately as the bears got large bars with follow-through and hit 1:1 targets. The bulls have not been as successful – so it is more bearish still.
• One problem the bulls have is the lack of limit order buyers that can get into the moves – look at the last two bull spikes – no pullbacks.
• Generally, moves without pullbacks lack the support to move to new prices and can quickly reverse back down in a TR.
• The bears were able to sustain a decent move down and create layers of resistance all the way down – now the bulls need to get through them.
• The bulls see a DB HL, possible MTR, a HTF bull flag and bouncing off a trendline. Phew that’s a lot… so why haven’t we broken higher?
• The bears see a LH DT and want consecutive bars to close below the 200-week MA – it has been a year since they could do that.
• The bulls got a good reversal at the right place, but that FT was disappointing. They wanted last week to rocket up, but that will limit the stop order bulls above now.
• The bulls got a BO of an inside bar below and FT, so we should move back down next week. There are probably sellers above the high of this bull doji, at the MA and below the prior inside bar to the left.
• Bulls want a big surprise bar through it to trap bears there.
• Traders can be short or long – as we haven’t hit any stops yet. You could argue the bears got the bull stops below Aug 14^th, but the correct stop was below March 20^th I think…. only 10 points difference.
• Expect sideways to down next week.

The Daily FTSE chart

• The FTSE 100 futures was a bull breakout on Friday, a bull bar closing on its high, so we might gap up on Monday.
• It is confusing – you can be long or short here. It’s a triangle on the HTF.
• Trading range price action means bad bars get strong FT. Then those trapped traders get a chance as we test the gap.
• So the expectation is that if we shoot up or down, we will return to test. Until we don’t!
• The bulls see a bull BO, a strong first leg and want a second leg up to the August highs. But they need one more bar. They will likely get a second leg here before we go sideways.
• They want the 7516 target above where other bulls got stuck before, and it reversed down on them.
• A BO and FT with a close above the pullback would set it off nicely. They have a few tails to contend with.
• The bears see bad FT and want a DT bear flag – a lower high for a measured move down.
• We are probably in a smaller TR, so we could get fast bars that fade at the extremes.
• The bulls might be disappointed from the 3-bar bear microchannel pullback. There are now sellers above the highs, most likely.
• Bulls need a FT bar on Monday to convince traders we will go higher, if not, expect sideways next week.

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