FTSE 100 Bull Channel, Failed High 1 Buy

Market Overview: FTSE 100 Futures

The FTSE futures market moved sideways in the late stage of a broad FTSE 100 bull channel. It was a failed High 1 buy above a bear micro channel, and the bears should get a little more down. The bulls want to get a second leg after a strong move up from the 200-Week MA, but it is a lower high. Next week is important as traders decide if we will get up to the all-time high (ATH) like the DAX market did last week.

FTSE 100 Futures

The Weekly FTSE chart

• The FTSE 100 futures was a small bull doji (2 points!) with tails above and below.
• It traded above the prior bar’s high, so it is a High 1 buy – although the context is a better sell because it follows a 3-bar bear micro channel.
• It’s a doji, so neither a great buy nor a sell. Low in a trading range, there are probably more buyers below.
• The bulls see a bull channel, a micro double bottom (DB), a pause at the moving average (MA) after a strong first leg from the 200-week MA.
• You can see open bull gaps on the chart, and around the midpoint of these gaps was the ideal entry point long.
• But the bears see we are not strongly moving away from it. They see a Lower High Double Top and no tails above the bars.
• The bulls want a good weekly buy signal, a bull bar closing above its midpoint for a reasonable buy signal, and a High 2 at the MA for a test of the high.
• The bears want the High 1 to fail (it might already have) and get another leg sideways to down.
• The last strong event on the chart is the sell-climax in March. This was disappointing for the bulls, and you can see as soon as we got back to the top of the sell-climax, the bulls sold also.
• The bears sold above the doji on March 20^th and also got trapped.
• If a second leg gets down there, buyers will be waiting – stuck bears and the bulls looking to get a good entry low in a trading range.
• The bulls know we have only a few bars below the MA, so they can buy and scale in lower as a reasonable trade, better above a good bull bar.
• Bulls bought below the pullback on the bull spike on April 24^th, so we also need to get up there to let them out.
• Expect sideways to up next week. The bears want an outside down and a small second leg.

The Daily FTSE chart

• The FTSE 100 futures was a small bull doji closing near its low on Friday with a large tail above.
• Some computers will read it as a bear bar because it closed near the low and had no tail below.
• It is the second consecutive bull doji, so it is a pause in a trading range or the late stage of a broad bull channel.
• The bulls see a strong leg up to the bear breakout (BO) point and a pullback. We are about 50% of the move up from the bull breakout where the MAs crossover.
• The bears see a failed buy at the 20-bar MA, an outside down bar and then a second leg sideways to down.
• Because a reasonable buy failed above, it is now resistance above – that’s why we have tails here.
• It is a bull doji, so it is a bad buy above, and it is not a great sell below, either.
• Monday will likely trade above the high, and we will see what is up there – I’m expecting sellers.
• The sell is a scalp, not a swing, as we are between both MAs, and they are flat to up.
• We have had 2 inside bars in the last 2 weeks – it might be forming a triangle. The first breakout of a triangle fails 50% of the time.
• The bulls want a failed bear BO and then strong bull follow-through above for a move back up. The buy at the MA was reasonable, so we should get back up there.
• But as long as that gap is open, bears will sell there. The bears want that bull bar to fail and then close below.
• They want to close strongly below and get a measured move down to the original bull BO point below- where the bears got trapped.
• We are getting bear bars below the MA, so another good bear bar might force bulls to give up.

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