The FTSE has lived up to its billing this morning and as we write is up some 50 points

However there has been no real  "follow through" in terms of volumes traded in stocks with all the good news this morning.

For us to completely believe in this rally we would like to see rises that have conviction, this is best demonstrated by decent volumes .

That said we are cleanly above the 5900 level and have filled the gap in the chart that was left when the market sold off in May . 

We believe that the support on the FTSE is the 50% fib retarcement level of the May - June decline at 5846, that was also the low of yesterday. Yesterdays intraday high of 5878.7 is 1st support, whilst above that level we believe that the potential upside is 5957 the June resistance line projection.

Main features this morning have been Rolls Royce  who reported excellent numbers this morning and whose servicing division is going great guns they are up nearly 25p as we type.

On the flip side music group EMI  have been marked sharply lower on news that  it is not going to proceed with a bid for Warner Music Group  ,although to us, this mark down smacks of " shutting the stable door after the horse has bolted" given the EU ruling on the merger rivals Sony & Bertelsman.

Looking at yeserdays signals DSGI have stayed above resistance at 195.75p closing at 196p last night and this morning trading up to 198p  albeit on modest volume.

In todays  signals Standard Chartered catches our  eye the area around 1360p has been  resistance of late &  just above we find the  downtrend line  from the end of March 06- There is not much above here  until  1400p  beyond this 1480p looms large. we have seen reasonable volume here in last few days  and would look for a close above 1360 on good volume  befpore taking the plunge.

As we write it seems our "peak key day reversal" signal has worked well today in Glaxo with the stock currently trading down 17.5p after trading as high as 1515p,potential downside target would be around the 1450p level.

Our High conviction buy in Reuters had gone to plan and whilst our target was 410p is does not hurt to take some profits around the 395p to 400p levels and instigate a trailing stop philosophy.

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New Signals
UK P&F Breakouts: 26 Jul 2006

P&F breakouts identify medium-term trend changes. "Bull" breakouts occur when a stock reverses its downtrend by posting a "higher high". "Bear" breakouts are the inverse.
We scan a "universe" of the FTSE 350 on a daily basis to identify these formations.
Key Day Reversals: 26 Jul 2006

Key day reversals are technical signals formed by stocks posting an "outside day" of a higher high and a higher low. Sells occur on countertrend reversals from a bullish trend and buys occur on countertrend reversals from bearish trends. Signals are particularly powerful when occurring after a period of overextension.
MA Crossovers: 26 Jul 2006

Moving Average (MA) crossovers identify longer-term changes of trend. We scan for "Golden" (bullish) and "Dead" (bearish) signals occurring when an instrument's 20-day MA crosses its 50-day MA.
Volume Advances

Volume Advances scans for stocks exhibiting volumes over their 20-day moving average.
Index Summary

Index	Close	Volume	1 day Change		P&F Trend		Stop
FTSE 100	5877.1	1,720.2m	+25.90	+0.4%	Bull	30 Jun 2006	5650.00
FTSE 250	9285.6	626.0m	+37.10	+0.4%	Bear	18 Jul 2006	9550.00
Closing prices through Wed Jul 26, 2006

Data drawn from market close. Technical trend, date of initiation and stop based on 3-box Point & Figure chart methodology.
Market Breadth

Investors Intelligence breadth statistics are based on the P&F "bullish%" and determines the degree of participation of the underlying stocks for any given index move.
Industry Breadth

Investors Intelligence breadth statistics are based on the P&F "bullish%" and determines the degree of participation of the underlying stocks in any industry group move. Industry Group bullish% provides an important measure of medium-term overbought/oversold conditions and a guide to sector rotation.
Top 5 Gains.

Top 5 Losses.