Archive for April, 2013

Could the FTSE be shaping up for a crash?

Sat, 20th Apr 2013 Leave a comment

Chart of FTSE-100 at 19th April 2013I had said that I expected the FTSE to fall along the lines of the Aug 1991 or Jan 1994 declines after it peaked at the beginning of March, but it hasn’t really followed those instances closely enough for me to feel comfortable that that is what is happening. Although I have made money trading the down legs, I am now out of the market as I was looking for an upturn of 5 or 10 points on Thursday which didn’t happen. A kink like that is common about halfway down a down leg, but when the FTSE closed half a point down I decided to close my positions as that was more suggestive of a bottom. I have been looking for an alternative analysis and am now viewing the lead up to the 1987 crash as a more likely scenario for the current chart:

Chart of FTSE-100 crash in October 1987If the FTSE continues to rise to the 20 day moving average (the green line), goes sideways for a while, then bounces back to 6490 I think there will be a good case to make for another crash. Meanwhile, across the pond, the Dow has declined this week, but this is its first pullback for two months, so it is due one, and I still think it is on course for 15,000. This would probably drag the FTSE back to the level I have suggested. I remain of the view that the Western world is bankrupt and when the market wakes up to this fact it will be time to retire to my bunker!

Categories: Stock Market, The Economy

Will the Dow join in the decline?

Wed, 10th Apr 2013 Leave a comment

Chart of FTSE-100 at 9th April 2013Since the peak at the start of March, the FTSE has declined nearly 300 points, though it is bouncing back now. The Dow has continued to make new highs though and looks like it is headed for 15000:

Chart of the Dow Jones at 9th April 2013

A rise to this level would probably drag the FTSE back to 6500 and I am hoping to see a turn at these psychologically important points. Then the fall in the FTSE should begin in earnest. There has been talk in the media of this rally being on its last legs for a while now and so a turn at a significant milestone is a reasonable expectation. Sentiment in Europe and the UK has been affected by the Cyprus bailout including a tax on savers which could cause bank runs elsewhere in Europe when other countries hit trouble, but the USĀ  remains unconcerned about this. There was a strong dip there on Friday after the disappointing job numbers, but, even then, the Dow recovered most of its losses before the close and has continued to climb since. I cannot foresee what will change sentiment in the US, but I think something will turn up!

Categories: Stock Market