Market Overview: FTSE 100 Futures
FTSE 100 futures went higher with a bull bar in an expanding triangle. Tight trading ranges in trends are generally continuation patterns, so traders expect more up. But the bears have been scalping. So it will need a strong follow-through bar this week to convince traders it is back to buy the close.
FTSE 100 Futures
The Weekly FTSE chart
- The FTSE 100 futures went higher last week with a big bull bar closing near its high in an expanding triangle and above the 20-bar moving average.
- The bulls see another bull bar above the moving average and hope for trend resumption back to the all-time high.
- The bar has a small tail above, a sign of hesitation.
- Bulls had a strong bull spike, and traders bought one tick above the high of that bar and haven’t had a chance to get out break-even.
- Some of those bulls would’ve scaled-in buys at the lows of the trading range, hence the tail on the bar two weeks ago.
- Bears have been scaling in one-to-one and have been fortunate to sell above bars, but time might be running out for them.
- Bears must trigger this bull bar and reverse back down to close the gap.
- We are in an expanding triangle, a trading range with climactic reversals.
- The only gap still open was left by the bar two weeks ago, and the bulls would like to keep it open and go higher.
- As long as the gap is there, bears will aim for it.
- We are probably back to always-in long, so traders should be long or flat.
- Expect sideways to up movement next week.
- Because it’s breakout mode with more than five reversals, some traders will wait for a follow-through bar before buying, preferably above the high of the last bear bar, so both bears and bulls are buying.
- Bears will need a double top to reverse such a strong spike.
- The bulls had a strong breakout gap that the bears were able to close, which makes them believe that we’re still in a trending trading range.
- When gaps are open, limit bears could sell higher and not lose money.
- However, most traders should wait for a good entry, either above the bar’s high or below its low.
The Daily FTSE chart
- The FTSE 100 futures on Friday showed a small bear inside bar with a tail below.
- It is in a nine-bar bull microchannel after a strong bear spike.
- The bear spike tested the 200-bar moving average and created a micro-double bottom.
- The bulls bought strongly from the support area, leaving several open gaps in this spike, a sign of strength.
- A bull bought one tick above the high of the last bull bar but got trapped by that spike, so we should go back up and let them out.
- The prior spike reversed down and closed all the gaps above it, but a few below might remain open.
- Can you sell below the low of Friday? No.
- It’s an inside bar above the moving average in a bull spike, so the bulls should get a second leg up.
- Some of the bulls are waiting for a break above the high of that spike and a measured move up to a new all-time high.
- But trading ranges are disappointing. The bears didn’t get a good second leg, and perhaps the bulls won’t get one either.
- The market is always-in long, so traders should be long or flat.
- Expect sideways to up next week.
- Microchannels rarely last more than six bars, so traders will probably exit below the low of a prior bar instead of expecting more buyers.
- I think bears will sell above the high of that bear spike, betting they can at least make a scalp, so we might need to go sideways next week to see who’s in control above that price.
- If not trend resumption, a trending-up trading range is likely.
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