Market Video Overview: FTSE 100 Futures
Tim Fairweather’s weekly report on the FTSE 100 futures market.
FTSE 100 report transcript
Hi everyone, my name is Tim Fairweather, and welcome to another FTSE 100 Market Report. So last week was a bull inside bar with a small tail above it. And you can see when we opened, we immediately went up. No one wanted to sell below that bar. And in my report last week, I said there was a high probability.
We would gap down after this big bear bar. And what happened? It immediately reversed at the moving average. And what that’s saying to me is that we’re in a tight trading range, reversals are common, and this is probably not a good place for a stop entry. There’s a small gap that’s still open above that bull bar, and I think we’ll probably go and close it next week.
I think we’re forming a triangle, which is a type of breakout mode as traders decide on what the next direction is. If we were to go up a time frame to the monthly chart, we would see a broad bull channel. And you can see that here. Breakout and then we’ve crossed over with the tails. But if we were looking at a line chart, there’d be a small gap above that breakout point.
So small bull inside bar, not a great buy signal for next week, but it’s probably better than a sell above the high of that bar. If you’re a bear and you sold above those highs, you had a profit, you didn’t come all the way back to your entry. So if you look at that sell signal and you sold one tick below it, you didn’t quite get back to it.
So you might’ve had to sell and then exit on that big bar, happy that you’ve got your profit anyway. So small loss, but larger profit, happy days, you’re out. And that’s the kind of trading in this environment. So if I’m a bull, what do I want? Well, I don’t think there’s going to be a lot of bulls buying above the high of that bar.
So they probably want a follow through bar to attract more stop entry bulls. Uh, of course the alternative is it’s a huge bull bar breaking above the high of these bears and then probably pull back and then break out. But I think that’s low probability. If I’m a bear, what do I want to see? I want to see a tail closing this gap and then another inside bar.
I started another small bar and that’s going to keep it in breakout mode and prevent bulls from placing an order one tick above the high of that bar. Are we always in long or always in short? Well, I think we’re still always in long. We never went always in short here. This is the high. Where’s the higher low down here?
We never broke it. And I think that’s the issue for the bears is that they’ve got a big distance to cover to get down there. And in the interim traders are buying the moving average. The most common way to trade a channel is to buy and buy lower sell and sell higher. So you keep. a potentially larger size of that position to buy at a favorable price.
Uh, so I still think we’re always in long. It’s obviously breakout mode in a tight trading range, not very good for stop and shoot traders on the weekly chart. On the FTSE 100 daily chart, you can see what that breakout mode on a higher time frame looks like on the lower time frame. We’re basically oscillating around this price, around 8, 200.
And I’ve got an indicator here showing always in long and always in short, just to show the moment we go always in short, we reverse. Always in long reverse, always in short reverse. And it’s just using the classic Albrook’s principle of consecutive bars, closing above or below the moving average. So here we’ve got a bare spike, a pullback and another leg.
So one leg down, pause on the inside bar, two legs. Pull back. So that could be three legs. That could be done now. So even though it looks like it’s always in short, every time it went always in short down here, the market reversed. We’re right in the middle of the trading range, and now you’ve got a bull inside bar on Friday.
So once again, not great for stop entry trades. Now, what are the bulls see? Well, the bulls see a bull breakout. But we didn’t break strongly above that high. So traders bought in here and exited at that high. So any traders that are long in here are probably going to do the same thing. I think they need to see a break pullback and then look for a swing entry up.
The bears were able to create a gap here, uh, which is pretty good. So that’s more likely to get filled. So if I had to be long or short above these bars, I prefer to be long to close that gap. I wouldn’t sell here. I think they’ve had too many legs down. Uh, the alternative is Monday is a sell signal. That cell signal gets followed through on the Tuesday and a pullback.
And then that could create a cell into the, uh, end of the week. But, you know, in terms of the distance for that trade, the stops wide, the target’s small, you’re really just squeezing a trade out on a timeframe on an instrument that’s probably not conducive to it. Uh, so, um, because we’re always in long, we’re above the 20 bar moving average and the 200 sideways to up more likely.
Okay. Can you, uh, buy above the high of that bar? Probably not great. Can you sell above the high of that bar? Well, I usually won’t sell above a bull bar in a bull channel, the same as I won’t buy below a bear bar in a bear channel. Okay. Because the expectation is it’s going to continue in that direction.
There’s usually a better trade. There is a small gap for the bulls down here, which is pretty common in a bull channel. So, uh, if anything, it’s 55 percent more to the bulls. We’re in a trading range. I think we’re, uh, we’re waiting to get out of breakout mode. So, uh, so I think next week will be sideways to up with an emphasis on the sideways.
And, we’re still waiting for stock entry trades to set up correctly on the weekly chart. Thanks very much for watching. My name is Tim Fairweather. See you later.
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