The FTSE 100 rallied a bit during the trading session on Tuesday to break above the most recent high before pulling back ever so slightly. The candlestick from the Monday session was a bit of a hammer, which suggests that there are a lot of buyers sitting just below. I believe that the 6600 level is an area that a lot of people will continue to pay attention to, and the 50-day EMA sitting just below there does not exactly hurt the scenario for support either.
Pay attention to the top of the candlestick for the trading session on Tuesday, because if we can break above there, then it is likely that we will go looking towards the 6900 level after that. If we can break above there, then it is almost certainly going to see buyers try to reach towards the 7000 handle which has been my longer-term target for a while. I have no interest in shorting this market based upon what we have seen as of late, and there are a lot of things that you need to keep in mind when trading the FTSE.
The very first thing is the fact that the UK has vaccinated 25 million people, at least with the first dose, so at this point a lot of traders are banking on the UK economy taking off quicker than some of the others. Another thing to keep an eye on is the fact that the British pound has shown strength, mainly due to the fact that Brexit is behind us, and that will be reflected in the overall economy as well. At this juncture, I think we will get a lot of noise, but I do believe that the buyers are going to continue to press the issue and eventually send this market higher. I have no interest in shorting, at least not until we break down below the 6285 handle. If we can do that, then I think the market will go looking towards the 6000 handle where we have seen a little bit of a gap just below back in November. I like this market overall, but I recognize that it tends to be more of a grind than anything else.
