As Friday saw the FTSE100 and FTSE350 pushing above the 5800 and 3030 sideways resistance that has held the market back since May.
As Friday saw the FTSE100 and FTSE350 pushing above the 5800 and 3030 sideways resistance that has held the market back since May.
This is undoubtedly a technical improvement, and enough to flip our 50-box P&F chart back to ‘Bull’ status, a condition that the FTSE had enjoyed unbroken through spring 2003 to summer 2006, barring the recent setback.
Standing back from the situation, we continue to subscribe to our theory that the summer will see extended ranging action. The sharp 10% correction in May (on both FTSE100 and 350) was severe enough to put a fair dent in investor sentiment, and thus, the overhead resistance may take a little more time to be absorbed.
More of a lacklustre environment on the mid-cap FTSE250 Index, as bulls continue to hold below the range highs, near 9500. A decisive break above here is needed to secure upside recovery.
BREADTH: Comfortably above 40%
Our bullish% indicators moved up in line with the improvement in sentiment seen in the UKX’s break of the 5,800 resistance.
Breadth for the blue chips gained around 9% to 53.5%, and is now comfortably above the 40% "floor" that this indicator displayed over the 2003-06 period.
Over the month of June, this sideways level had converted into resistance, and we would ideally like to see a pullback (and subsequent demonstration of support) to confirm that we are back on track for positive breadth characteristics.
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