[Dan]

FTSE 100


The FTSE 100 has posted a weekly close above the 55 week moving average though remains below the Jan high at 4,675. A firm breach of that would be a bullish development though for now we are still watching developments with a neutral stance. Note that the last time the FTSE 100 traded above the 55 week moving average (on a close basis) was in May 2008. The following week was a bearish weekly reversal that gave a leading indication of a trend lower for several weeks to come. While many indices have rallied through resistance levels and made new highs for this trend and indeed for the year so far, we feel further
confirmation is needed before talking about sustainable medium term gains. This week’s close on the S&P 500 will be a key indication as it is month end. The 12 month moving average is in focus on a close basis at 938.90.

S&P 500 monthly chart


This week’s close (month end) will be important. The level to focus on is the 12 month moving average at 938.90.

[Dan]

Dow Industrials


• While stock indices have rallied aggressively over the past week we still need confirmation of breakouts on some markets before suggesting higher levels. The Dow Jones is pushing against good resistance in at 9,043 – 9,107 area where the market has turned on many occasions, as can be seen on the medium / long term chart above.
• Above there good resistance is found at 9,654 – 9,708 though we will need to see a good weekly close above 9,107 before suggesting further medium term gains.
• Interim resistance is at 9,285 – interim highs in October 2008.

FTSE 250


The FTSE 250 is not trading very well and looks similar to early May where it fell from the same level. We did NOT get a bearish daily reversal at the high yesterday like we saw on May 7th, (it was close) though we're seeing further losses again this morning and momentum is rolling over again.
Near term support is at 7,813 - 7,792 and a close below there would be concerning in the ST