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FTSE 100 Strong Reversal Up From Triangle Apex

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Market Overview: FTSE 100 Futures

FTSE 100 futures moved higher last week with a two-bar strong reversal, closing above the 20-MA. The bulls need a good follow-through bar here to convince traders it is always in long. But the bears got 3 bars in a row, so they probably need one more bar themselves. We should go sideways to up next week.

FTSE 100 Futures

The Weekly FTSE chart

FTSE 100 Strong Reversal Up From Triangle Apex
FTSE 100 Strong Reversal Up From Triangle Apex
  • The FTSE 100 futures last week was a big bull bar closing on its high, a strong reversal.
  • The bar also went above the high of last week’s big bear bar but did not close above it. So, it is not as bullish as it could be.
  • The bears see 3 consecutive bear bars, one big and closing on its low below the MA. But traders needed to see one more bar to conclude it would be always in short.
  • It was also a bear microchannel with a micro gap between the first and third bars.
  • It is a High 1 sell signal – but the reversal was so strong I would not take it here.
  • The bulls see a strong bull spike, a BO of a triangle and a test back down to the apex. They expect a second leg, so its unlikely this bar is the completion.
  • If you look left, you can see we are in a trading range – so who has the market control? Big sets of consecutive bull and bear bars.
  • It is a disappointing environment, so traders will likely BLSHS and take quick profits.
  • The bulls want a follow-through bar to get always in long and start a three-push move up to the ATH. But it probably won’t go straight up.
  • The bears want a lower high for a head and shoulders reversal.
  • The problem for bearsis the 200-MA which has been support for so long, it limits the downside.
  • Expect sideways to up next week if the strong reversal gets follow-through.

The Daily FTSE chart

FTSE 100 Sell Climax Low in TR, Bull Spike, Test BO Point
FTSE 100 Sell Climax Low in TR, Bull Spike, Test BO Point
  • The FTSE 100 futures on Friday was a big bull bar closing near its high, so we might gap up on Monday.
  • It is the seventh consecutive bar in a bull microchannel, so a spike, and will likely we followed by a channel up.
  • The bulls see a break above a bull channel and now a test below it. But we were in the lower third of a trading range, which is a reasonable buy zone for the bulls.
  • It was also a High 2 buy, the High 1 was the Friday before with the big tail.
  • The bears see a sell climax after a strong bear spike. They wanted another leg down.
  • Bears might have sold the highs of the last 2 strong bear bars – they are all trapped right now.
  • But it was a deep pullback for them, after a deep pullback for the bulls – so TR price action.
  • Bears see the big bear bar as a fade setup. It is climactic as is unlikely to get follow-through without a pullback.
  • Thursday was a weak signal bar, so some traders might expect us to go back and test it.
  • But the HTF context is good for a swing up, so if the bulls get FT, then those bears will have to panic out.
  • The bulls are testing those traders who bought the MA in a bull channel and it failed. They bought lower and now can get out breakeven on their first trade and a profit on the second.
  • Expect sideways to up next week.

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