Double-crossingThere are two interesting signals – the ‘dead cross’ and the ‘golden cross’. As I understand it (and please remember that I’m very much an amateur when it comes to TA), the indicators have to be treated with caution because they lag the up-to-date price. Taking the three daily moving averages (dmas) that I’ve been using, a ‘dead’ cross appears when the 20 dma breaks below the 50 dma, and then the 50 dma breaks below the 200 dma. Conversely, with a ‘golden’ cross the 20 dma breaks up through the 50 dma, which in turn breaks up through the 200 dma.
At the end of March 2020 the 50 dma broke down through the 200 dma just as the precipitous fall of the FTSE 100 was happening. It was arguably too late to catch the first phase of the fall – see the 20, 50 and 200 dmas on the 1 year chart:
https://bigcharts.marketwatch.com/advch ... e&state=11 But now there seems to be a strong case for saying that a golden cross is almost bound to appear shortly.
This is clearer if we look at the far shorter 14, 24 and 40 dmas on the same I year chart; a golden cross appears to have been almost completed – see:
https://bigcharts.marketwatch.com/advch ... e&state=11 (I believe that traders use far shorter dmas.I’ll be very grateful for any comments correcting and/or rejecting anything that I write.)
The FTSE 100 has risen past the 6300 mark, closing today (Thursday 18th) at 6385.24, but it seems to be slightly reluctant to rise through the 6400 mark, which is not far short of the high of 6,484.30 last June. It may well need a period of consolidation, but IMHO (and, as usual, DYOR, E&OE) a Brexit agreement could possibly trigger a further rise in market, with investors looking 18 months ahead after (we hope) successful mass vaccinations against Covid and (again, we hope) there has been an eventual transition from the Trump to the Biden presidency. I venture to suggest that there’s the possibility of some sort of Santa rally ahead. That’s not a forecast or prediction, merely a possible scenario. National and international events could well and truly wreck it, testing the 5800-6000 support level severely.
One more point - upside resistance. Historically there’s the low of 6600 in December 2018/January 2019. Will this be a possible resistance, being the bottom of a major trading range from July 2016? See:
https://bigcharts.marketwatch.com/advch ... e&state=11Please don’t take any of this seriously. I don’t want anyone to think that I know what I’m talking about (thinking aloud, per my OP), so I’ll probably take a break from posting and wait to see what happens. It really would help if others could critically comment.
Jon
P.S. Please remember that most of the charts on this thread are updated during trading hours. So if you are looking at a previous post please check the date at the bottom of the chart.