UK markets still seem to be going through a will it won't it phase at the moment. The charts below show a smoothness about the rise since the 20/50 dma crossover, which looks pretty relentless but clouds the uncertainty that still prevails. For the FTSE100 5900-6000 still seems to present a major area of resistance. Multiple attempts have been made to break through and they all fail. Time will tell if this trend has the legs to get us through to Christmas with a Santa rally that hits new highs. The charts for the FTSE250 and TechMARK look much cleaner and more bullish in the way the upward move since June has played out. It is easier to see them reaching new highs, although such a relentless rise can be prone to a quicker, sharper fall if things turn bad.
Bottom line is that the general trend for the markets has been up and as each stage of the financial crisis gets priced in, there appears to be less likelihood of a big drop going forward. The US elections and the potential fiscal cliff is the probably the next big hurdle. Given that politicians in the US have a habit of pushing things close to the edge before a decision is made, big time volatility might be just around the corner again, although it could be next year before we see it. It's inevitable that there will be a correction, a sell off, a downward trend happening at some stage, the question, as always, will be the extent of it.
Charts:
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| FTSE100 |
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| FTSE250 |
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| TechMARK |
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