FTSE Bears Stare Down To The October Low

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Bears appear unconcerned with the prospects of a Santa’s rally this year, who instead appear set to drive it to the October lows.

Since the all-time high in May, the FTSE has shed over -11% by yesterdays close (or by -13.6% at the October low). Whilst we’ve seen a recovery from 6851.59, the trend structure remains bearish with a series of lower swing highs and lows. Furthermore, the leg from 7552.02 down to 6851.59 saw a pickup of bearish momentum to suggest the down trend is accelerating. There’s also a suggestion that the end of a correction may have been seen.

Since the October low, the FTSE has rebounded in an almost haphazard style. Crucially, this retracement has stopped just shy of a 50% retracement and 50-day MA, a bearish pinbar and bearish outside day which suggests strong resistance sits around 7200.

Our bias remains bearish below the resistance cluster around 7200. Yet given it closed at the low of a wide-ranging sell-off yesterday, a break beneath 7027.45 may not be far off to bring the October lows into focus.

 

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