So, it took the return of Berlusconi and the rise of another comedian in Italy's election, Beppe Grillo, to put the jitters under the markets to start this week. It had to happen, risk on having been a popular phrase for so long with the traders that you would be forgiven for thinking that markets had forgot how to fall. The FTSE survived without a whimper the UK ratings downgrade over the weekend, with talk of it being "priced in", but Italy reminds the markets of the bigger picture of Euro problems and the fact that democracy doesn't always produce what the markets would like.
However, the daily chart on the FTSE100 has been showing for a little while MACD divergence. For most of this month the MACD indicator has been suggesting weakness although it is yet to fall below the zero line and price on the chart continued to test new highs. It will be interesting to see if the FTSE can hold the lower trend line on the chart below at around 6200, but if this is finally the beginning of a bigger sell off then we shall have to see if the support points on the chart holds at around 6100 and then 5900-6000.
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| FTSE100 - Daily |
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