The FTSE 100 seems to be summing up all the major stock markets at moment as it drifts all day from the opening bell until the close of the trading session.
Once again the FTSE 100 appears to be on the front foot with buyers looking to come in at the low 5,300’s. However the extreme bullishness of the last mini-bull market seems to have somehow evaporated.
5,290/5300 remains the price support level and 5,340/50 is now the price resistance level (having been support until only very recently). This slip back into the old trading ranges below 5,340 is not what the bulls wanted to see, they will have to fight their way higher again. Contra-traders in the online CFDs markets are once more having a field day as merely opposing any previous ‘major’ session move is proving profitable.
The US markets have also stalled and like the UK’s FTSE 100 they are still within striking distance of new levels. 10,590/10,600 for the Dow Jones is now looking like a very important marker. A number of recent trading sessions have failed at 10,580 - a definite worry if you are pip trading.
It looks like investors in the financial spread trading futures markets have been shorting anything above 10,550 for quick profits. So far they have been successful but it’s a dangerous game to play and there is a high price to pay if the market breaks higher.
Strangely the US S+P 500 is rather less positive and, at the 1,110 level, the stock market index is some way from the recent high of 1,133. This is rather more concerning than the Dow Jones’s progress as it is built on 500 major US company numbers not just the 30 as per the Dow Jones. The DJIA can be heavily swayed by one constituent.
At the moment the S+P 500 and Dow Jones seem unable to break away from the psychological levels of 1,100 and 10,500 respectively. We may just find that throughout the summer these levels continue to exert a fascination for the stock markets.
