The FTSE continues to struggle above 6390, the 13-day BTI is still overbought and the next logical move is down. As I predicted mining and oil stocks are pulling back and dragging the FTSE lower. You must remember that when a sector is in a bear market and prices surge and the Top 20 Differential is overbought, the odds of a pullback in the FTSE increase significantly. We are in the midst of the US earnings season and a number of blue chip announcements disappointed investors. Less demand from China translates in lower earnings. Growth concerns remain, metal and crude oil continue to decline following the weak Chinese industrial production report. It’s not easy to boost growth with billion of dollars.
To receive regular analysis and trading signals on the FTSE 100 subscribe to Better Trader