Technical Analysis - FTSE 100

Monday, December 2, 2013, Marketing Communication FTSE 100, Daily The FTSE 100 has continued in its near term bearish trading range, red region. This is of interest as the S&P 500 over the past week has posted fresh all time highs. The FTSE 100 graph by itself has turned more bearish on the break under the 38.2% retracement level at 6627. The recent bearish phase on the FTSE has been posted while the S&P 500 has powered upwards. On any profit taking in the S&P 500 the selling momentum could accelerate on the FTSE 100 moving the index under the 50% retracement level support at 6568. While there is a risk of an acceleration of selling in the coming days, we also feel there is a risk of a strong upside breakout. Giving an unusually high chance of volatile moves in the days ahead and before the market settles back into the normal routine in mid January. We mentioned last week how there is the potential of an upside break on the FTSE due to the fact that institutional selling has occurred on every move over the 6700 area in the past six months. Institutional action tends to wane over the holiday period and this lack of selling pressure could allow the FTSE 100 to unwind the recent divergence with the US markets. Leaving a volatile outlook seen for the week ahead as a result we see traders interested in a FTSE/S&P 500 pair trade, more below. FTSE 100 in Dollars The FTSE 100 graph converted into dollars is a more positive picture than the FTSE 100 graph, but the price action still remains under its October highs. So the recent under-performance in the FTSE 100 can be partly explained by the movements in GBPUSD but it does fully explain the current picture. FTSE 100, S&P 500 Overlay The S&P 500 is above in blue, while the FTSE 100 is in red. This graph details the recent divergence. It is not commonplace for the S&P 500 to be posting near term highs, while the FTSE 100 is at near term lows. As a result we do see traders interested in buying the FTSE 100 against a short in the S&P 500 over the potentially volatile holiday period ahead.  CFD Sales/Traders 0044 (0) 207 894 8883 sales@cantorcapital.com Images Depending on your email settings the images contained in this note may not be downloaded correctly. Select the view 'Web version' link on the header to open a browser window that will display the full note. Graph images are created on Bloomberg, and remain under copyright to Bloomberg. Unsubscribing From E-mails If you would like to be removed from all Cantor Capital Commentary notes then please click on the 'Update Preferences’ link on the header, or the ‘Edit your subscription’ link on the footer and select the ‘Unsubscribe’ link at the bottom of this page that appears. This will remove your email from all Cantor Capital Commentary distribution lists. 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