Market Overview: FTSE 100 Futures
FTSE 100 futures went sideways last week again, with a tight trading range in BO mode. The bears had a chance to pull back the market, but the buying has been relentless. You don’t want to trading countertrend with open breakout gaps below, the probability isn’t worth it. But the bulls need to do more next week to bring the team back again long. I expect the next volatility expansion to be up, but TTR are 50/50.
FTSE 100 Futures
The Weekly FTSE chart
- The FTSE 100 futures went sideways in a tight trading range above support.
- It was a bull doji bar following a bear sell signal, a Low 2 or Low 3, depending on how you count it.
- For the bulls, it is two or three legs down after a strong bull spike, and they expect a second leg sideways to up. That is highly probable.
- The bears saw 5 bear bars in a row and wanted their second leg down. They might have just had it.
- So, what do you do in a tight trading range? As a stop-entry trader, you wait.
- If a bear sold below last week, how are they feeling with their entry bar? Disappointed. If it goes above this week, they will sell more to exit breakeven if they haven’t already.
- We said last week that bulls were more likely to take over around the MA after such a strong spike.
- We could still test the breakout point and breakout gap below.
- But as the best sell signal in this pullback has not got 2:1, not the stop entry 1:1, the best choice is to wait for bears to finish/exit what they are doing and look to buy.
- The bears never took out a swing point, so it’s always in long for me. The pullback is about 50% of the leg up, so it’s reasonable to buy with a limit order.
- Buying below the bull bar was okay, but most traders should wait for a good stop entry before buying above it.
- Buying below the low of the second-last bull bar in a microchannel was also a cracking buy last week.
- Expect sideways to up next week as the bulls take over.
The Daily FTSE chart
- The FTSE 100 futures triggered a wedge bottom and a buy signal with good follow-through last week.
- Bears see a spike and channel down from the all-time high. They are two or three legs down, so they are probably due for a BOM or a correction.
- Bears failed a few times to break the strong bull spike and you can see the urgency in the buy signals last week.
- Bulls see that the bears couldn’t trigger stop entries below strong bars and get follow-through. Too many tails below.
- Bulls must do a little more to convince most traders to get long. I think it’s better to wait to see what happens Monday below that bear bar—I think it’s a bear trap, and we will reverse up.
- I would be out of shorts above that bar.
- See how Friday closed on the MA in the middle of the range? It’s saying TR price action in an overall HTF bull spike.
- What would I need to sell? I’m not interested in selling here at the MA. I think its a buy below those big bull bars.
- Now that bulls have triggered a High 3 buy signal on Thursday, I would need to see those traders trapped long, as we reverse strongly to even consider it.
- Better to be long or flat, but ok to wait for more evidence.
- Wedge Bottom pullback towards the 200 is a reasonable long entry for a test of the high.
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