Market Overview: FTSE 100 Futures
FTSE 100 futures went higher last week, setting up a possible High 2 and trend resumption. Bears needed to do more below bear bars, and the tails showed eager bulls. They could still attempt the second leg down, but the traders equation is not very good, better to be long or flat right now waiting for the bulls to take over.
FTSE 100 Futures
The Weekly FTSE chart
- The FTSE 100 futures last week went higher, setting up a possible High 2 and trend resumption.
- It was a small bull doji just above the moving average which is sloping up. It’s a reasonable buy in a bull trend.
- It overlaps completely with the bar before it; it is an inside bar. So, it is in breakout mode and 50/50 either way.
- Inside bars are also small triangles on a lower time frame (daily.)
- Breakouts of inside bars often fail and come back and test the breakout point.
- The bulls see a High 2 setup near the MA, and the trigger is above a bull bar. Stop below the bull spike, and it has a good probability.
- Some traders will wait and see what happens next week and will buy on a test back to the inside bar instead.
- Bears see the 5 bars down as leg one and want the second leg under the MA. The breakout point and the TTR are magnets in a trading range. They have a wide stop and small target, so the trader’s equation is not great.
- I think the bears need a double top to reverse this.
- The monthly chart (HTF) is a bull microchannel, so traders expect a larger second leg, which could take many weeks, so sideways to up is more likely.
- Always in long? 5 bear bars are enough to agree on the trading range. However, a trading range is mostly a continuation pattern on a higher time frame. The bulls see it as a pullback.
- It is a bull bar, so bad sell below, and no limit sell above because there is not enough momentum or probability.
- Expect sideways to up next week.
The Daily FTSE chart
- The FTSE 100 futures went higher on Friday with a bear bar with a large tail above it.
- It is the third consecutive bull bar. Two of them are above the MA.
- The bulls have not yet taken out the bear swing point from June. If they can break that, a measured move-up is likely.
- The bears want this to be a wedge bear flag and get a measured move down to the 200 MA.
- It has consecutive wedge bottoms, so there is a high probability of a reversal setup back to the MA.
- But five or more reversals mean breakout mode (BOM), so it’s better for most traders to wait for more information.
- Bears have put a lot of bars below the MA. So they can argue the first reversal might fail and come back and test. A higher low major trend reversal. Thats reasonable.
- I would argue they didn’t trigger enough Low 1s under the MA. Look at how few bear bars got triggered with FT.
- Yet the bulls had nearly all of their bull bars triggered. To me, buying and buying lower looks better right now.
- The targets below are looking further away now, so a return to a test of the highs is more likely for a double top or breakout.
- Bull microchannel, so likely a second leg sideways to up
- A trading range, so it is more likely sideways next week.
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