FTSE relapses back into month without gains

The FTSE 100’s failure to grab back key zones during its fight back late last week leaves more than an element of doubt.

On Monday the main doubt remained its ability to begin gaining for the year in what remains of this month.

Losing as much as 1% earlier, the British-listed index with an infamously light connection to the UK is still in the red for the year in the last week of January.

FTSE’s failure to post positive performance in January raises the hurdle for forthcoming months, especially as the latest symptom of one of global markets’ deepest malaise—weak oil prices—have also stalled after rallying on Friday.

The market has largely been kept in the red on Monday by weaker oil shares, with the energy sector trimming 11 points off the underlying ‘cash’ index.

The underlying index closed at 5900 on Friday, marking the level as an important waypoint and likely resistance beyond it being a ‘psychological’ whole number.

The same threshold appears in the most liquid tradeable asset derived from the FTSE 100, Intercontinental Exchange’s FTSE Future contract.

ICE FTSE turned back from 5901.9 during the second hour of the session and has remained weak since.

Its first call should be the 2015 low (5761) which failed to provide sustained support during the broad download between the last days of 2015 and late Thursday last week.

There does not appear to be any reliable proven support beneath.

FTSE Future is currently bolstered in the pictured four-hour view by several moving averages (white: 14; green: 21; blue: 35).

The FTSE Future is testing these too, after having been enclosed by them for most of the month.

Should they buckle, the case for an extension of January’s decline of some 10% might be strengthened.

Fibonacci projection suggests a first major target of 5622 (38.2%).

Four-hourly momentum is dragging lower but is neutral with respect to the state of sentiment—the Slow Stochastic indicator is neither oversold, nor overbought.

ICE FTSE FUTURES: FOUR-HOURLY CHART

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