Another turbulent week for the FTSE 100 index and by the look of the chart(see below) I suspect it may be more of the same for the week ahead. The 20 day EMA has now successfully crossed the 50 day EMA and they are both making there way down towards the 200 day EMA. Price has also crossed the 200 day EMA quite significantly last Tuesday before finding some support at 5535. This is well below the level I suggested last week of 5600 but as always there is no exact science when you’re trying to predict markets. That’s why I prefer to try and look at what is happening and trade accordingly.
I would think this week will see the FTSE testing out support levels again with the lowest low of last week being a key level to watch this week. If this level is broken I suspect the downwards move will continue. Testing of this level could occur this week as markets generally fall much quicker than they rise. Usually some world event will happen that triggers the fall so we’ll wait and see if anything major happens this week.
Chart Copyright of SpreadCo ©2012
With the absence of any clear trend in the FTSE 100 any thing goes(short or long). However I will be taking a cautious view on any new trades that I make this week. I’ll be keeping a close eye on them and if they fail to react as expected within a reasonable timeframe then I will cut them quickly and without emotion. More FTSE analysis next week.
