Market Overview: FTSE 100 Futures
FTSE 100 futures moved lower last week, triggering a sell signal. The bulls got a streak out of the apex of a triangle, and we expected a test back down to the BO point. We touched the channel line again, and bulls need to create buying pressure here again to get a swing up.
FTSE 100 Futures
The Weekly FTSE chart
- The FTSE 100 futures moved lower last week, triggering a sell signal.
- It was a big bear bar with a tail above and below. So its a trading range bar.
- The bar did not quite reach the MA, so it is not as bearish as possible.
- It was a 5-bar bull microchannel, and bulls expected to buy below the last two bars. But because of the distance to the MA, some limit order traders wanted to buy lower down.
- The bulls see a BO after a triangle. It was BOM for a long-time, but we are above both MA.
- The bears see another DT. For the bears it was also an implied Low 2 short after the big tail four weeks ago.
- Bulls want a bar with a big tail below touching the MA so they can buy. But after two bear bars, some might wait for a small second leg sideways to down.
- The bears want a weak buy signal, like an inside bar, to trap bulls above. Or a FT bar below.
- It’s another weak sell signal, so there are probably more sellers above.
- It is around about a 50% pullback of the leg. Trading ranges have a habit of deep pullbacks, so we might have to go down and test the last bear inside bar in November.
- If you sold the week before, you got your scalp profit, so you’re probably not holding.
- If you’re a swing bear, you expect a pullback and can add on above.
- Swing bulls might have exited below the prior week – so exited this week.
- Bull scalpers, who already got their profit might have got back in this week near the MA so they want one more bar up and will exit if they get one bar against them.
- Most traders should be long or flat, expecting a second leg up.
The Daily FTSE chart
- The FTSE 100 futures on Friday printed a big bull reversal bar with a reasonable tail above.
- It follows a bear surprise bar that closed below the MA.
- The bulls see the first time the bears had done something bearish in more than 20 bars. They might see this Friday as a 20-Bar MA Gap Buy signal.
- The bears see a bear surprise and a pullback. They probably expect one more bar down.
- But Friday reversed immediately, showing few stop-entry sellers below the bar. Those bears might be above Friday and higher.
- So bulls can probably buy this bar and lower betting on a test up.
- Most bulls should wait for a follow-through bar and a good stop-entry buy.
- For some bears, it is always in short – three consecutive bear bars and one large one closing on its low and below the moving average. but the context is not great yet.
- Stop-entry bears might wait for a lower high and then a higher probability short.
- It was a late bull leg in a bull channel, and there is a bear BO 75% of the time so it was reasonable for bulls to exit.
- It is an inside bar, so it is a 50/50 signal. We might have entered a smaller trading range inside the larger one.
- Bears want to try and swing it back down to the lows of the range. But the small pullback bull trend was quite strong. There is also many open gaps, so that might prevent it from going straight down.
- Traders should be short or flat.
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