The FTSE turned down yesterday without reaching the top of a resistance line near 6850. The S&P declined too but after the FOMC announcement the US index rallied to close unchanged. Earlier US GDP beat estimates, gross domestic product grew at a 4 percent annualised rate. Initially the market rallied on the news but the rally did not last and the FTSE closed down.
Sentiment has turned bearish, odds favour a stock market decline in the short term. With regard to the FOMC statement, the Fed was bullish on the US economy and reaffirmed that it is in no hurry to raise rates. Today we could see a small bounce after 8am, but I believe that the trend has turned down because prices completed five waves up to 6833.
|FTSE 100||Today||Next few days||Next few weeks|
|Key Reversal Levels|
|FTSE 100 cash||above 6833.5||above 6833.5||below 6643|
|FTSE 100 Future||above 6788||above 6788||below 6597|
The trend is likely to reverse when the trend reversal is 75%. A breach of a key reversal level implies a neutral position.
Research provided by e-Yield