Jump to content

FTSE100 Out of sync with other indices?

Recommended Posts

While there is some divergence between the major indices in general recently the FTSE100 seems to have been much more reluctant to rally.  I don't see this as a material divergence however but merely a delay and maybe we will soon get a catch up rally on the FTSE?  The other indices seem intent of testing the next levels of resistance and, as I noted in my US indices thread, there are some unclosed gaps out there.  There is one on the FTSE as well, which I expect to be closed before any major Bearish move.

My reading of the FTSE is as follows:

  • Overall I remain biased towards all stock indices being in a retrace (or relief) rally rather than a motive wave that would see another ATH).
  • I think other indices (especially US) have put in an A-B and are currently in a strong wave C, which would - if true - end at a suitable resistance point yet to be determined)
  • FTSE100 however looks to be behind the curve, and may be posting a wave B turn at the Fib 50%.  There is also strong PMD on the 1 hour chart and Stochastic over sold on the Daily (a typical indicator for an interim wave ending such as a wave B - i.e. the longer term move is not yet complete, rally in this case).
  • The wave B looks like a straight forward 1-5 down ending with a Bullish pin bar that bounced off the Fib 50% and then put in a small 1-2 before the current rally away.
  • Watch out is that further bearishness in other markets could pull the FTSE back down to the Fib 60% so stops just below the Fib 50% make sense to me.    

For me this could be a nice short term trade before I resume my search for the next Bear, I am long off the small 1-2 rally. 

FTSE100-Daily_280119.thumb.png.c5fa3b8b8a5e7d17c9c0d95aaac220e5.pngFTSE100-hour_280119.thumb.png.03010fd9f79adbf6ddde4f04404d31d9.png

  • Like 1
  • Thought provoking 1

Share this post


Link to post

@elle,

Yes quite possibly. We have witnessed recently all the major indices moving together in a similar fashion from a chartist perspective. However, there is no given right for this to occur. We are possibly witnessing some divergence with the FTSE 100 as a result and maybe rightly so. One would expect the FTSE 100 to drop more than other major indices with the uncertainty around Brexit and the risks involved for the U.K. 

Markets hate uncertainty and tend to react accordingly to it.

Edited by TrendFollower

Share this post


Link to post

Ah Brexit!  The source of all mysterious and inexplicable market movements...

Share this post


Link to post

@Mercury

Not all but for U.K. indices Brexit uncertaintly may relate to capital allocation strategies changing and position sizes reducing.

Sound risk management!

Share this post


Link to post

Looks like the FTSE100 is off to close that Gap.  If it does let's see what happens next but I would expect a continuation of the rally once the gap is closed and perhaps the Fib 50% resistance zone is favourite for the next Bear attempt, although first we have the Fib 38% zone and need to keep an eye on other indices for clues.

I am Long off the channel breakout, stop protected just below the 6760 prior small low for a low loss risk trade with lots of upside potential.  As I am long term Bearish this is a swing trade off what I think is a wave B conclusion leading into a wave C, which should run fast if correct.

Medium term I don't know whether the FTSE100 is ahead of or behind the other indices but it seems out of sync and this could give some clues as to what the others are doing as the move progresses.  For now I am content to sit on my Long and let it play out. 

FTSE100-1-hour_290119.thumb.png.dd412b18f5cc943a795b03deef60aa90.png

  • Thought provoking 1

Share this post


Link to post

This was a great call and FTSE seems to be pushing up passed the 6850 mark - not much movement over the recent political landscape and discussions as expected so I'd likely leave brexit out of this. Especially seeing as we're talking about the 100 here, not mid caps UK. Especially when GBP is looking pretty flat as well. 

 

  • Like 1

Share this post


Link to post

Agree @cryptotrader, just now (almost 9pm UK time) GBP is pushing down but likely to be temporary angst over the Parliamentary vote, which as you know is non binding and anyway not in the gift of Parliament to give.  I expect things to stabalise and GBP to continue up in due course.  FTSE is just doing its own thing, it was interesting that US indices, especially the Nasdaq, were a bit off today but the FTSE just kept going.

As many people who comment on this forum constantly remind us, correctly, trade the price action.

  • Like 1

Share this post


Link to post

trying to get back "in sync" 

Capture ukx.PNG

Share this post


Link to post

Yep it's motoring now, which is what I was looking for, and that gap remains unclosed.  Similar picture on SP500 and Nikkei (see former below).  Dow is also now motoring up to the Fib 62% but the others still have some way to go.  I wonder whether the Dow will plough on up to the next resistance zone of diverged in consolidation for a while?  I would be reluctant to attempt a Short until these indices get their ducks in a row...  For now I will hold my tactical Longs a bit longer (now stop protected at BE).

SPTRD-1-hour_300119.thumb.png.24a40240805313b02a0a8f95e63cbae3.png

Share this post


Link to post

I don't worry much about Brexit shenanigans @Kodiak, except for short term volatility from an entry and stop placement perspective.  To me Brexit has not changed the long term trajectory of key markets it might reasonable be expected to influence (e.g. FTSE100, GBPUSD, EURUSD).  As a long term swing trader I am less concerned with short term volatility.  My long term Fundamentals assessment has not changed post Brexit referendum nor as a result of the pantomime that is the leaving process (see posts elsewhere on the Euro and stock indices for details), in summary though I see the Euro as a doomed currency, at least in the current structure, and the "United States of Europe" dream of the so-called elites as just that, a dream.  When the global economic realities bite the valuations of many assets and currencies will unravel and this will have little to do with Brexit.

The only area where I do see it a relevant is as the beginnings of a groundswell of protest votes against the status quo.  We then saw Trump elected a change in leadership in France, Merkel's popularity and support base plummet (she won't survive to the next election), multiple alternative political groups gaining ground across the World and several independence movements making noise.  Add to that the China/US thing; US and everyone on trade negotiations; US apparent return to politics stopping at the waters edge footing (now including at the "wall"), meltdowns in countries like Venezuela, economic reversals in key BRICs (Brazil in particular but China is not looking too rosy right now) and so on.  Brexit may have been one of the first major status quo changes but in and of itself it is small, insignificant, next to the backdrop of political and economic uncertainty that may and to a fundamental shift in the geopolitical and geo-economic status quo.  This is the basic set of fundamentals that underpins my long term assessment of financial markets direction driven by depressionary forces, which can be summed up as follows:

  1. Stocks down (big time!)
  2. USD up
  3. Gold/Silver up
  4. Industrial commodities down (at least initially) - based on economic activity contraction

Happy days...

 

Share this post


Link to post

This weeks action feels like a short squeeze to me ( Lunar New Year week) 

Capture FTSE.PNG

Share this post


Link to post

Agree @elle @ProjengENG, I closed all my tactical Longs on Friday, not wishing to carry short term trades over the weekend.  I am watching for a reversal signal as the case is building across the indices.  All of the Gaps (except Nikkei) have been closed now and FTSE100 as, it appears, returned to the pack in terms of correlation.  With key many markets at or near key resistance zones a direction change seems on cards in the next few days.  At a minimum caution is indicated for Long holders and for Bears we just need to see those triggering price action signals.

Medium term I am not sure yet if any direction change is a completion of a retrace as part of the long term Bear or an intermediate phase in a more complex and drawn out retrace.  The market will reveal itself on this in due course.

Share this post


Link to post
On ‎05‎/‎02‎/‎2019 at 11:48, elle said:

This weeks action feels like a short squeeze to me ( Lunar New Year week) 

Capture FTSE.PNG

done

Capture zxz.PNG

Share this post


Link to post

Join the conversation

You are posting as a guest. If you have an account, sign in now to post with your account.
Note: Your post will require moderator approval before it will be visible.

Guest
You are posting as a guest. If you have an account, please sign in.
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.


  • Member Statistics

    • Total Topics
      7,424
    • Total Posts
      37,754
    • Total Members
      47,723
    Newest Member
    Smallbear
    Joined 18/09/19 20:46
  • Posts

    • Wow. Just look at the volatility. The price action is erratic to say the least. This has happened before on quite a few occasions in the past.  In one hour from my initial post to this post the price action has reversed. It is all about waiting for a clear signal for which direction these indices are going to go in. 
    • So you have to admit this S&P chart is as bullish as you could get, traders have been waiting for the Fed who haven't disappointed, have refused to break lower during that wait and are just staring at that ATH just a short reach away. Barring a war there seems nothing to hold back the continued march onward and upward. Daily chart; 
    • I think we now have the potential and it is potential shorting opportunity on Dow Jones (Wall Street), S&P 500 (US 500) and Nasdaq (US Tech 100) as well as other indices. The FTSE 100 is not looking too good in advance of Brexit. The 'daily' chart is looking rather bearish. The price action is looking bearish. However the price has not breached any of the key moving average indicators as of yet for the US 500. Hence why I am using the word potential in terms of trading opportunity. Some of the ultra aggressive traders will already be short the S&P 500 and other similar indices but if they are wrong the price does not continue downwards then they will be out quickly. 
×
×