FTSE100 index . . . the laggard - Neutral to LONG
I may be a little foolhardy putting this chart up with CBs out in force this week, Omicron grabbing the headlines and the end of year fast approaching.
FTSE100 . . . the laggard index.
EMAs:
Black = 10
RED = 20
BLUE = 100
Fuchsia - 200
The GREEN and ORANGE are the daily 100 and 200 EMAs . . . always good to keep an eye on them.
MACD: A repetition of above with the 100/200/90 histogram showing.
Main Chart: Regression Chanel in RED from LOW to HIGH and then stretched to maximum Pearson's R. Second RC on the downward slope, stretched as before.
Horizontal BLUE box = SUPPORT
Horizontal BLACK arrow = NPOC . . . no, not a naked point of control but a Naked Previous OPEN/CLOSE that was just revisited yesterday. NPOCs are more relevant on currency pairs but that's another story.
FIB from L to H
Horizontal dotted RED and GREEN = daily range bands at 30 day average.
GREEN boxes = Previous STRONG Signals to trade. There are MEDIUM Signals there too but I've omitted because they need the accompanying charts to describe.
Good news = Price hit confluence of FIB at at 38, SUPPORT and NPOC and is bouncing up from downward RC
More Good news = 100 EMA is still above 200 EMA and just beginning to curve . . . this will be confirmed when the Histogram curves back up and turns GREEN.
Bad news = Price out of main RC . . . not all is lost so don't panic just yet !!
There are three scenarios to look out for:
1. A retest of the Low before a bounce.
2. No retest and a bounce . . . as I write it seems to prefer this scenario but it's testing both the 10 and 20 EMAs ATM so it could turn out to be option 1 if it rolls over . . . there's never just one option :)
3. Complete failure of the above and I start all over . . . it's all part of the job.
In either case (refer to previous GREEN boxes), it's only a BUY trade in this instance when the 10 EMA is above the 20 EMA and the 10EMA is above the 200 EMA . . . and I stress, PRICE will have broken out of the short RC to the upside (possibly/probably followed by a quick retest before resuming upward). Further visual confirmation will come from the MACD above zero and the histogram GREEN.
Targets are arbitrary to the individual . . . but if successful then PRICE has to surpass the previous high and aim for 7400 minimum. I can tell when to make a trade but it's entirely up to the individual when to close it.
I normally trade currencies and it's rare that I'll trade an index but this one has me interested, so I've been keeping an eye on it for the last month or two and have made a few successful trades on the way. I follow three charts of everything 60m/15m/5m with dual time frame analysis on all. PRIMARY/MAJOR/MINOR with 99% of analysis in the PRIMARY and MAJOR.
NB. I'm not trying to convince anyone of my methodology . . . each to their own but it works for me and if you have any questions just drop me a message as it's very difficult to explain everything in one chart and a few notes.
All the best TS
Comment:
Final Post with charts and conclusion.
Analysis is never point or pattern perfect . . . it is a continuous and ever evolving process.
In this instance although I’m aware that PRICE dropped to the 50 FIB and major S/R (look to the left), the analysis remained valid throughout even if it was rather foolhardy of me to put the charts up before the CBs. However, PRICE did remain in the extended RC and there were a couple of SELL trades to be had on the way for good measure and a couple of BUY trades post RC breakout although I can’t take any credit for the overnight one because I’m fast asleep but I’ve plotted it on the 15m chart (my trading chart) for reference.
PRICE finally broke out of the RC at the former S/R and 38 FIB (blue box/ellipses) and has been shaking out the weak hands with a flip-flop action retesting the breakout as referred to in my first post. For pattern lovers, it has now formed an inverted H&S on the hourly chart.
The 100 and 200 EMAs on the hourly are currently bunched along with the 10 and 20 EMAs, BB is squeezing. For the moment there is indecision and equilibrium between BUYERS and SELLERS but one side will win out eventually and a break will happen. The Bears have to push PRICE to previous S/R below at 50 FIB to gain traction, the BULLS above former S/R at 23 FIB.
TP at various levels North to watch out for all plotted with a final destination for BULLS at circa 7500 . . . ambitious maybe but those are my calculations given current data. PRICE rarely goes in straight lines so it will zig-zag.
I wish you good fortune and all the best in 2022.
Thomas Selby
Final Post with charts and conclusion.
Analysis is never point or pattern perfect . . . it is a continuous and ever evolving process.
In this instance although I’m aware that PRICE dropped to the 50 FIB and major S/R (look to the left), the analysis remained valid throughout even if it was rather foolhardy of me to put the charts up before the CBs. However, PRICE did remain in the extended RC and there were a couple of SELL trades to be had on the way for good measure and a couple of BUY trades post RC breakout although I can’t take any credit for the overnight one because I’m fast asleep but I’ve plotted it on the 15m chart (my trading chart) for reference.
PRICE finally broke out of the RC at the former S/R and 38 FIB (blue box/ellipses) and has been shaking out the weak hands with a flip-flop action retesting the breakout as referred to in my first post. For pattern lovers, it has now formed an inverted H&S on the hourly chart.
The 100 and 200 EMAs on the hourly are currently bunched along with the 10 and 20 EMAs, BB is squeezing. For the moment there is indecision and equilibrium between BUYERS and SELLERS but one side will win out eventually and a break will happen. The Bears have to push PRICE to previous S/R below at 50 FIB to gain traction, the BULLS above former S/R at 23 FIB.
TP at various levels North to watch out for all plotted with a final destination for BULLS at circa 7500 . . . ambitious maybe but those are my calculations given current data. PRICE rarely goes in straight lines so it will zig-zag.
I wish you good fortune and all the best in 2022.
Thomas Selby
Comment:
Update 17.34 - Price rolled over and is currently trying to base. Static chart uploads don't take account any indicator movements but after stretching out the RC, Price is hanging in there and the original analysis is still valid on the hourly as I write.
Analysis is analysis but not a bias . . . my main chart for trading is the 15m and there was plenty opportunity to SHORT this today regardless of the hourly chart analysis. I've popped up a copy of the 15m chart and it's really quite academic where the STRONG day trade was.
10<20EMA 40<80EMA (equivalent to hourly 10/20) . . . duplicated in the MACD and easy to see with 35 + points to be had for very little risk. Price now basing and 30 day ADR target just below.