- The FTSE 100 has slipped a bit, testing the 50 Day EMA indicator.
- The 50 Day EMA indicator of course is important for a lot of technical traders, but it is also flat at the moment, suggesting that we are essentially killing time and going back and forth.
- All things being equal, this is a situation where I think a lot of traders are just trying to figure out what to do next.
Bank of England
Keep in mind that the Bank of England has an interest rate decision on Thursday and that will be the next major mover in this market. In general, I think a lot of people are waiting to see whether or not the Bank of England does anything, and according to many of the places I have looked at, it is expected to hold firm at 5%. If that’s the case, we could see a little bit of sideways and nonsensical behavior in this market.
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Ultimately, this is a market that I think is paying close attention to the 8100 level, as it is a major support level, as well as the 8400 level, as it is a major resistance barrier. If we can break above that level, then it’s likely that the market could go looking to the 8700 level, but I also recognize that the situation where we are right now is that we are sitting in the middle of this range, so I don’t know what we are going to do next, and I don’t necessarily think that the FTSE 100 breaks out in the short term, unless of course the Bank of England changes his tune and cut rates, which could cause the market to go higher, but quite frankly what the Federal Reserve cutting 50 basis points, it’s probably not too awfully long before traders around the world start to ask questions as to whether or not the global economy is in worse shape than they thought. In other words, hang on, it’s a situation that is fluid but hopefully stable.
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