FTSE Technical Highlights:
- FTSE bounce short-lived, probing March lows
- Macro-top still in effect, important level here
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FTSE bounce short-lived, probing March lows
In last week’s commentary, I looked at the oversold bounce developing in the FTSE with the expectation that it would be just that, a bounce before more selling. Monday’s key-reversal turned momentum lower and has the March low coming under fire.
It’s a big level given the macro-topping pattern in play since last year. The pattern picked up steam back in early August when a lower-high was cemented, bringing in the prospects of a drop to the bottom of the price sequence, or March low. But now that we are there, if it is broken, then even more bearish implications will be brought to light.
Based on the height of the pattern, a break points to a move all the way down to around 5800. But for now, in the short-run we may see a bounce develop off the March low. As has been the case, though, it’s not playing the bounces that holds appeal, rather selling them once momentum stalls.
Continue to monitor global markets as things are beginning to turn ‘macro’. The S&P 500, which has been the lone standout among major global markets, is coming under serious pressure and breaking long-term trend support levels.
FTSE Daily Chart (Testing March low)
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FTSE Weekly Chart (‘RST’ pattern)
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—Written by Paul Robinson, Market Analyst
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