Market Overview: FTSE 100 Futures
The FTSE futures market traded sideways to down last week as traders mulled over a new push to the new all time highs. Bears don’t want to sell 5 consecutive bull bars but we are also at the top of two trading ranges which is a tough buy so bulls are exiting. Expect sideways to up next week.
FTSE 100 Futures
The Weekly FTSE chart
- The FTSE 100 futures index last week was a bear inside bar closing above it’s midpoint with a tail below. We are still always in long.
- We got a few things right last week. We said last week that bears won’t like to sell 5 consecutive bull bars, they didn’t.
- We said last week the FTSE hadn’t had 6 consecutive weekly bull bars for many years so we got that right. But even though it was bearish but didn’t close below the low of the prior week.
- We said the FTSE would struggle to close above 7700, that remains true.
- The bulls see a pullback in a 5-week tight bull channel. They will buy any pullbacks expecting another leg up. It is likely we will trade sideways to up next week at least initially to see if we can get buyers above.
- The bears see a pause at the top of a trading range, a possible wedge top with three pushes up and lower high major trend reversal. They will look to sell above – hence the sideways price action.
- With bulls buying below and bears selling above it is a lower timeframe trading range and we will continue to go sideways while traders decide.
- We spent 10 weeks in this tight trading range so it was a reasonable magnet. We might stay here until a reasonable catalyst – War, COVID, Inflation, Musk, Oil, Bitcoin – moves us out. Take your pick. Maybe all or none of the above.
- The bears want a decent sell signal, a bear bar closing on it’s low, preferably with a tail on top, a Low 1 to scale in, expecting a second leg, at least to the moving average and hopefully to the bottom of the channel.
- But the maths is not great on the swing.
- The bulls know we haven’t traded below a bar in 6 weeks and will buy any chance to get long. They have been paying above average prices so likely to scale in lower at a better price.
- We have the top of a several-year range above, the bulls need a Low 1 to be bought ready for a second leg up through that resistance.
- The bears know this so will scale in expecting another push up, hoping for it to end around the top of the range. A Low 2 at the top of trading range is a high probability trade.
- If bears get a sell, the first target would be the moving average for a scalp. They would see this as the next leg after the sell climax in March.
- The bulls would then look to get a double bottom and second leg up.
The Daily FTSE chart
- The FTSE 100 daily chart had a bull bar on Thursday (Public Holiday Friday.) It’s a High 1 buy above Wednesday but we closed at the entry so it hasn’t failed yet.
- We are still always in long but have been going sideways for 2 weeks now.
- For the first time in one month we had consecutive bear days. We are still always in long but we might transition into a trading range.
- For the bulls we broke out of a tight channel after a spike up from March 7th lows. We might be transitioning into a broader bull channel.
- For the bears, it’s a failed breakout above a tight channel at the top of a larger trading range so it’s reasonable to short. They want a second leg down but they know the best they can get is a bear leg in a trading range.
- The bulls want a chance to buy lower at the moving average for another move up to 7700. A double bottom bull flag at the moving average is a high probability buy.
- The bears are not likely to get a bear trend to start from here. If we get a Low 1 sell down to the moving average it’s likely going to be bought back up as we haven’t touched the moving average in over 20 bars.
- Considering the lack of buying pressure above bars in the last few weeks we will likely go sideways here
- Likely both sides will be disappointed. The bears might get a move down to the moving average where bulls will buy. And the bulls will get the move up to the top of the range where they will exit so expect sideways to up. Potentially to a scalp measured move up to the April 8th high.
- If next week we get another pair of bear days, either large or one closing on their low, we will get bears swinging for a move down to the bottom of the March lows.
Market analysis reports archive
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