After an extended time trading sideways the FTSE 100 broke lower last week and as I predicted in my last report to you the index ran a decline towards the 6,030 points’ so I hope you made a good profit out of this opportunity. However what is interesting is that the FTSE reversed its flows immediately after reaching this target and today being a week later we find it trading sideways again.
It is interesting to note that excluding the radical volatility on the day of the ECB meeting that drove the FTSE to the 6,030 points’ area and back up again the London index seems to be trading within the same 6,100 to 6,200 points’ area. So again we need to lay out our scenarios for when the index breaks out again given that we have plenty of important events ahead of us.
The Fed meeting on monetary policy, the BoE meeting, the release of the US Retail Sales and UK employment data are all important events that are bound to attract traders’ attention and spark some volatility in the markets. We need to be ready then with our scenarios at hand to jump into the markets and take advantage of any opportunities as they might be over before we know it, like last week’s drop and reversal.
So to the downside again I need to see a clear break below the 6,100 points’ support and again I am going to look towards the 6,050 points’ area with the possibility to extend my secondary targets to the 6,000 points’ support. Pretty much the same scenario we had in our hands last week and hopefully it will work as well as it did last time.
To the upside now I need to see the FTSE making fresh highs above the 6,200 points’ resistance and should the index manage to clear this area then I am looking to follow it towards the 6,250 to 6,270 points’ levels where my targets will be placed. I need to advise you here to be vigilant and quick in your trades as they can run into profits quickly and then reverse back again before the end of the day.
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