Source: Blackwell Trader (FTSE 100, D1)
The FTSE 100 has started to turn again, and if history is anything to go by, it’s important to watch this one.
Markets have looked to push the FTSE higher in an effort to see gains on the ceiling that has been in place for some time now. It looks like they may have made some gains but overall, it looks more like markets are looking to turn back.
The FTSE has an accurate history of solid wave patterns which provide markets with ample opportunities. With a strong ranging motion and a solid bullish trend line in play, markets have gorged themselves in the past, and last night’s turn should not be taken lightly at all.
One of the major reasons for such movements lower was pointed out last night when we had worse than expected PPI data which will have an impact on the various sectors in the UK economy. At the same time, CPI y/y was at 1.8% (Core CPI 2%), this part bodes well for the UK economy in a sense that it fits roughly within the current inflation targets.
Current levels of support are at 6769 and 6702; any break lower than 6769 would be a bearish signal for most market participants.
With markets looking bearish at the present moment and the stoch looking to drift lower, I am certainly bearish on the index and will be looking for further lows in the coming week.