Archive for February, 2013

A slight change of plan…

Thu, 28th Feb 2013 Leave a comment

Chart of FTSE-100 at 27th February 2013

The FTSE is still going sideways, but a pattern has just emerged in the chart which suggests that it is likely to break through 6400 temporarily before we get the dip I was looking for in my last post. The three small dips (one just above the 20-day moving average followed by two just below) in the last two weeks form a pattern which indicates that the next upward movement on the index will be the last for this rally. I have seen this pattern about eight times in the last twenty-five years and it has been one-hundred percent reliable in that time. I cannot say how big the last move will be, but I am betting that with the Dow so close to its all-time high of 14,165, it will break through it and take the FTSE above 6400 in doing so. Then we should see the downturn that I predicted previously.

Categories: Stock Market

FTSE to drop by 8 per cent?

Sat, 16th Feb 2013 Leave a comment

Chart of FTSE-100 at 15th February 2013

Well, the FTSE hasn’t followed the script I set out in my last post, so I think I’ll have to write that one off as a failure. It has actually risen around 200 points from where I suggested it was due a small drop, but, undeterred, I am now looking for a much larger drop (back to the 200 day moving average – the red line) from here. I think the index has got ahead of itself after taking off so strongly from the sideways movement around 5800 and seems to have met strong resistance just below 6400. The Dow is also displaying uncharacteristic hesitancy in breaking through for a new all-time high just above 14000 and I suspect this resistance will prevail and the indices drop back to a more comfortable level before progressing further.

There is also the fiscal cliff spending cuts to reconsider at the end of the month, but I am not sure they will have that much of an effect this time. I think it is likely that the market will assume that another fudge will be made to resolve the issue, just like last time.

Categories: Fiscal Cliff, Stock Market