- The FTSE 100 has been stagnant during the trading session on Wednesday, but it also looks like it’s a bit tired.
- I would point out that the Bank of England has an interest rate decision on Thursday, and that obviously has a major influence on how the stock markets behave in London.
- With this, I think it makes quite a bit of sense that we see a little bit of a drop, but the 8500 level underneath should offer support, right along with the 50 Day EMA which sits just below there.
On the other hand, if we were to break above the 8700 level, that could open up a move to the 8900 level above, which was a major swing high. All things being equal, I think the FTSE 100 will probably move right along with most other indices, and most indices at this point in time are looking for some type of good news when it comes to the trade wars out there, because that’s the only thing people seem to be paying attention to. However, it’s also worth noting that we have taken out the high of the vicious candles on the way down, so I think at this point in time we are starting to see a little bit more in the way of “normalcy.”
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Exhaustion? Probably.
This is probably more exhaustion than anything else, due to the fact that we are heading into a central bank meeting, and the fact that we had shot straight up in the air over the last couple of weeks. Granted, it is not as momentum driven as the bride lower was, but that is typically the case anyway.
Volume has been dropping a bit over the last couple of days, so I would be concerned about that as well. However, I write that off more or less to the central bank meeting, which makes quite a bit of sense because most people will be willing to give up massive gains over the last 3 weeks just to gamble on the latest statement coming out of the Bank of England. All things being equal, I suspect this is probably a “buy on the dip” opportunity after the central bank meeting gets out of the way.
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