- The FTSE 100 pulled back just a bit during the early session on Tuesday, losing about half a percent.
- All things being equal, this is a market that has been a little bit overstretched during the last week, as the 8,300 level offers quite a bit of trouble.
- This is an area where we have been quite sideways and stagnant, and therefore, the fact that we ended up at the 8,300 level should not be a huge surprise. After all, it's been like a magnet for price.
I do believe that there is a significant amount of support below near the 8,000 level. So, the fact that the Stochastic Oscillator has crossed over to show signs of exhaustion right at this area of extreme pressure in the market is not a huge surprise. With that being said, I think you've got a scenario where you're basically at fair value. 8,500 above seems to be the ceiling, with 8,000 being the floor. The fact that we are near the 8,250 to 8,300 range suggests that we're at fair value.
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We Might Roll Over for a Minute Here
This market looks like it's trying to roll over a bit, and if it does, I anticipate that there should be plenty of buyers underneath. We are in a massive consolidation phase, and consolidation typically means continuation. But there are a lot of questions to ask about the UK economy, social unrest, as things are getting a little bit ugly for the Labour Party, and a whole host of other issues.
At this point, I think we're in a holding pattern. I think dips should be bought by short-term traders, and if we can ever get above 8,500, then we'll have our next shot higher over the longer term.
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