The FTSE 100 initially gapped higher to kick off the trading session on Monday, but then spent most of the day falling before finally turning around and bouncing near the 6725 handle. The FTSE 100 of course has been trying very hard to go to the upside, perhaps taking out the 6850 level, maybe even the 6900 level. That being said, the market is likely to see a lot of buying pressure every time we dip, just as we have seen of the last week or so. Furthermore, we had a particularly bullish candlestick form last week in the form of a hammer, and therefore it suggests that there are plenty of buyers near the 6600 level.
The FTSE 100 of course is going to trying to convey the potential bullish as of the United Kingdom economy, as the United Kingdom has vaccinated more of its population than most of its European peers, and therefore one would assume that the economy opens up much quicker than its neighbors. Furthermore, the UK economy was hammered by Brexit, which is starting to get worked out albeit very slowly. Now that the negotiations are over, the reality of life has stepped back into the picture, which of course was nowhere near as bleak as the news media and the traders were acting like.
We are getting very close to the recent highs near 6900, and I think eventually we do break above there. If and when we do, then it is likely that we go looking towards the 7000 level which of course is a large, round, psychologically significant figure. Because of this, I think it will act as a bit of a magnet for price, and I would not be surprised to see us get there in the next month or two. I do not necessarily think that it is going to be easy to trade this market every day, because I anticipate more choppiness than anything else. However, even beyond the choppiness I expect more bullish pressure than bearish, so I continue to look at this as a “buy on the dips” type of market. I have no interest in shorting the FTSE 100 until we break down below the 6400 level at the very least, and quite frankly I think it is probably going to be closer to the 6285 level that would have me shorting.
