By Dominic Picarda.
The FTSE remains the ugly duckling among the index swans right now. The UK index has come off noticeably harder in the last couple of sessions than either the DAX or the S&P, both of which were in much stronger uptrends beforehand. My gut feeling is that the FTSE will play catch-up sooner or later. In the meantime, I would focus on the S&P, whose rally has been decisive and convincing, but which has not become overbought unlike the DAX.
I did a fantastic interview the other day with Andrew Smithers – one of the few economists to warn of the trouble in equities ahead in 2000 and then again in 2007. He’s got a stark warning about the outlook for the S&P in 2014, which I’ll be releasing shortly. You can hear his thoughts on the UK’s economic revival here, meanwhile.
I shall be speaking about “the Ideal Portfolio” at the Lecture Club in London at 6.30pm on Thursday 28 November
The S&P’s drift sideways and lower since Monday’s highs has been as mild as they come. To me, this screams of a market consolidating ahead of another upwards push. An attack on 1845 is next up, I reckon. Note that the S&P isn’t overbought on either daily or intraday timeframes.
Support: 1797.1 – Resistance: 1888.1
Support: 1782.1 – Resistance: 1845.0
Support: 1767.1 – Resistance: 1827.1
Support: 1740.7 – Resistance: 1807.2
DAY: Stay long or buy a bounce off the 21-fourhourly EMA
POSITION: Stay long
Dominic Picarda CFA, CMT writes the Trader column at http://www.investorschronicle.co.uk/comment/the-trader