21st March

Since my last post we've broken the 6000 barrier, so that means that I was wrong about the consolidation before 6000. As usual, the market tends to react in the same ways over and over, in this case, it looks like the market will breach the barrier before consolidating. Anybody looking at the chart on the 16th would have seen a very strong market ready to push higher, however, the next couple of days show exactly what I had been anticipating.

There is a general principle that prices tend consolidate aound areas of resistance and support, 6000 is definately one of these areas for the FTSE, so consolidation is expected, I would have expected this to happen before breaking the resistance, however, it appears as though it may happen after. The last two days have shown very long upper wicks, both stretching around 40 points above 6000, however, on both days the price has ended the day below 6000, this leaves us with two inverted hammers, as we saw in the intraday action before, these occur in areas of weakness. So with this as a signal, I would expect to see the market either stagnate or make a retracement. Before this happens, I do not think it would be correct to go long. The market is as always a tricky beast, and moving at the wrong time is usually more destructive than not moving at all. So for the moment I'm going to sit here like Jesse Livermore and hold on to my money a bit longer watching the ticker tape for a solid sign that the market is ready.