Well the spread betting weeks just come and go and it’s time for my weekly FTSE 100 analysis yet again. The main day for the FTSE this week was Tuesday when it rose over 100 points. The question is was it just a retracement of the falls from the previous week or will rise continue? Well looking at the chart it doesn’t look too promising for the bulls. The price action shows a recent down trend formation, lower lows and lower highs. The 20 EMA has firmly passed through the 50 EMA but seems to be levelling out with the FTSE ranging the last few days of the week. If the FTSE falls next week and passes through the most recent low of 5576 then I suspect the FTSE will be falling some more maybe to 5500 or lower. If this does happen the it will drag down the 20 & 50 day EMAs possibly poking through the 200 day EMA. It will take a while but if this does happen then the EMAs will start to confirm the down trend that could potentially be occurring.
Chart Copyright of SpreadCo ©2012
My outlook for the week is bearish but having said that it doesn’t mean I’ll pass up a long position if a good up trending stock should come along. My rule is trade short in a down trending market, trade long in an up trending market but when there is no real trend anything goes.
I have to say I am glad I started doing my weekly FTSE analysis again. People who have been reading this blog for some time will know that I have a pension that tracks the FTSE and although I cannot profit from the FTSE falling I can try and wait out the down trends to make the most of the up trends.