FTSE100 technical outlook – trend is still down

The FTSE has the same trend that the US markets have, which is clearly down. We will have to test the support at 4700 within the next 4-6 weeks. Very short-term, we can expect a little counterwave with limited upside, which might bring us to 5500 before selling will emerge again and get us a low around 4700 (even 4500), which might hold for a few weeks. Nevertheless, the overall trend shows that we are heading for a severe low into Q1 2009. Bond/Money markets confirm this scenario with the TED – Spread at the High.

Politics are taking over the negotiations of the bailout package, which was not well designed from the beginning. It is going to be announced somehow after the WE, but with provisions that do not make the markets gain confidence going forward. Hence, we might see a little relief rally but that will not change the underlying trend, which is down. We will even see rate cuts very soon. That was my preferred version of action for the last WE to buy some time to design a more meaningful bailout package.

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~ by behindthematrix on September 25, 2008.

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