Sunday, 4 January 2015

Fib Observations in the FTSE100

I have uploaded a chart of the cash daily FTSE100. On the chart there are 2 fibs systems drawn on it. What I see is weakness in the FTSE. First the US indices (SP500 and DOW) have gone to new highs after the flash retracement but the FTSE100 has not which indicates divergence with those indices

Secondly the 78.6% fib seems to be a problem for the FTSE 100 as shown on the chart. That level stopped the upmoves in their tracks. Will the FTSE100 track lower from here?. That is one to watch out for.

The mention of QE by Draghi throws a spanner in the works as the markets may start to factor that in and move higher which is why I downgraded this from a trade idea to observation. If there is any news that attempts to cancel or postpone the possible start of the proposed QE price could go down hard.