FTSE Bottoming Pattern on 4 Hour Trade/ British Elections
Just before I talk about this trade, just a fair warning that the British Elections are this week on Thursday December 12th. So a high risk event, and will be dominated by Brexit promises.
I have spoken about how Central Banks in the Western world are stuck, and they are now attempting to maintain confidence in the system. They want to go back to easing and QE but remember, QE was supposed to be a one time desperate policy to prevent a 1920-30's like great depression. When we go back to QE, people will realize it did not work in the first place. They will use different names to mask QE, but this is the confidence crisis that looms.
These central banks have one role now: to keep assets propped. This will eventually be morphed into buyers of LAST RESORT (instead of lenders of last resort...which was the central banks original mandate when they were first being formed).
I am expecting higher equity prices in the US because there is nowhere to go for yield anymore. Also, many investors know the Fed will support this market. Not to mention the President needs high stock markets if he wants to win the next election using "Keeping America Great" slogan.
Yes, we will have pullbacks, but equity markets will go higher. I speak about why this can be a problem for the Fed and the US Dollar. Post linked below.
In terms of the current FTSE chart, we did make a bottoming/ double bottom pattern at a flip/support zone. From here, we had a nice break above a flip zone marked in blue, a strong break, and now it seems we are making our first higher low which will be confirmed with this current 4 hour candle close.
Target will be the flip zone at 7340 for the trade.
I have spoken about how Central Banks in the Western world are stuck, and they are now attempting to maintain confidence in the system. They want to go back to easing and QE but remember, QE was supposed to be a one time desperate policy to prevent a 1920-30's like great depression. When we go back to QE, people will realize it did not work in the first place. They will use different names to mask QE, but this is the confidence crisis that looms.
These central banks have one role now: to keep assets propped. This will eventually be morphed into buyers of LAST RESORT (instead of lenders of last resort...which was the central banks original mandate when they were first being formed).
I am expecting higher equity prices in the US because there is nowhere to go for yield anymore. Also, many investors know the Fed will support this market. Not to mention the President needs high stock markets if he wants to win the next election using "Keeping America Great" slogan.
Yes, we will have pullbacks, but equity markets will go higher. I speak about why this can be a problem for the Fed and the US Dollar. Post linked below.
In terms of the current FTSE chart, we did make a bottoming/ double bottom pattern at a flip/support zone. From here, we had a nice break above a flip zone marked in blue, a strong break, and now it seems we are making our first higher low which will be confirmed with this current 4 hour candle close.
Target will be the flip zone at 7340 for the trade.
