Following the breakout above the key 5400 consolidation level of 2 weeks ago, the FTSE100 has continued its longer term bullish momentum over the last few days with Monday in particular ending as a wide spread up candle opening at 5508.45 and closing fractionally above the psychological 5602.55.  This was followed on Tuesday by a minor pullback with the FTSE100 managing to reach an intra day high of 5635.72, before closing on the day marginally lower at 5576.19.  Yesterday’s trading was characterised by the FTSE100 oscillating in a relatively narrow range between 5597 to the upside and 5516 to the downside before finally closing at the mid point of 5551.91.  As such neither of these two days should cause any alarm or signal that the recent bullish trend has come to an end and indeed with both the 20 and 50 day moving averages still pointing sharply higher the risk on appetite from investors still remains intact.  As such we can expect the trend to continue higher in the short term and in the longer term we are now looking towards a re-test of April’s high at 5832.34 in due course.  With the solid platform of support below, and continued strong support from the 20 day average in particular, there is no reason to suppose that the FTSE100 will not re-test this high.

The VIX sentiment indicator continues to trade in a relatively benign range between 21 to the downside and 25 to the upside, an area where it has remained for all of September so far.  This is well above the low of April where we saw the VIX fall and test a low of 15.58 which provided a clear sell signal for equities when markets were complacent and, as such, this adds further confirmation to our analysis that the bullish trend for the FTSE and equities has some way to run in the short term.

FTSE surges as analysts talk up 6000

With the strong platform of support now firmly established in the 5403 price region the FTSE 100 continues to climb higher in a series of positive steps, further extending the bullish breakout of last week which saw this key index finally climb above the recent sideways price consolidation.  Yesterday’s price action was relatively muted with the FTSE 100 index confined to a narrow range and ending as a small doji cross candle which may signal a pause point and temporary pullback in today’s trading following Monday’s strong performance and strong gains.  For FTSE betting today we may see a minor pullback in the index but for longer term trend traders the outlook is currently firmly bullish with both the 20 and 50 day moving averages now turning sharply higher and with the deep platform of support now below we are looking towards a price of 5825 which was last seen in April as our initial trading target.  As always FTSE spread betting trade should be fully protected with a stop loss and thereafter initiated as a trailing stop to lock in any profits turning the trade into a risk-less position.

Share volumes continue to fall

The FTSE100 index continues to remain firmly bullish on the daily chart following the break out and hold above the 5400 price handle which had become a critical technical level.  In particular, the failure to breach the 5411 price point of late July and early August had originally signalled the sell off during the latter part of the month which saw the index break below both the 20 and 50 moving averages ultimately to test support at the 5070 region.  A reversal from this level was duly signalled by a deep hammer candle on the 31st August which opened at 5201, re-tested a low of 5129, before closing the day higher at 5225.  This gave us a clear and obvious FTSE betting technical signal that the market was about to break higher which duly arrived on the 1st September with a wide spread up candle with no wicks to either top or bottom, taking the index back above the 20 day moving average as a result.  The final leg up of this rebound finally occurred on Thursday 9th September, following a further hammer candle the previous Wednesday, as the market opened at 5429 and closed as a wide spread up candle at 5494.  As such we now have a deep and sustained platform of support immediately below which should now provide a solid springboard for the index to continue higher with our next target being a re-test of the high of 16th April, at 5825 and this should be achieved in the next few weeks provided the clear risk on appetite remains across the broader financial market.

Basel III & China data cheers bulls

The FTSE100 has been trading sideways contained in a narrow range between the 5200 and 5400 price area of the index.  The index opened today at 5350.5 but closed the session lower at 5276 as fundamental news from the US weighed heavily across all the major indices.  Trading volume was extremely light, not surprising given the summer doldrums, and from a technical perspective today’s narrow spread down candle closed once again below both the 9 and 14 day moving averages.  To the downside the 40 day moving average continues to provide an excellent platform of support and provided this key indicator is not breached then we can expect some further sideways price action over the next few days and any break above 5410 to the upside should then signal a breakout and consequent move higher for the FTSE100 index in due course with a solid platform of support then in place.  As outlined earlier the US market jobless claims, which came in worse than expected at 500k for the week, coupled with a slump in the Philly Fed which reached its lowest level since July 2009, all conspired to push the FTSE100 lower in today’s trading session.  However, the longer term outlook remains firmly bullish provided we see a break and hold abofe 5410 with some clear water below.

For morning trades the FTSE100 is likely to open lower.

Wall Street tumbles spooked by shock jobless claims & a slump in Philly Fed