Resistance targets hold whilst momentum still positive

It is interesting right now to see how the markets are holding onto the key targets as forecasted several weeks prior. The indices seem to be sticking to the price levels without showing signs of wanting to fall lower. There are warning signs from some technical indicators which suggest that the current rally may soon be reaching a point of exhaustion and by keeping a close eye on patterns which develop at key levels may provide clues as to when the expected reversal may take place. But for now the momentum is still positive and there is no sense in bucking the trend as this could prove to be dangerous. See key levels below:  

FTSE 100 may set sights on 6000 level

So far the FTSE 100 has reached a high at 5876. This is close to the expected target of 5900 and if sustained we may see the 6000 level as the next objective. The worrying signs for the bulls are that at 5900 we can clearly see that the index is moving sideways without seeing a thrust higher. If there is more strength in this rally then the index will need to clear both 5900 and 6000 to then move forward towards 6250 as a key objective. For the near term bullish momentum is still intact and short term traders can watch 5810 which if broken may see the index trade back lower towards 5460.

FTSE 100

Dow Jones almost at major highs

The Dow Jones has cleared 13190 but we will need to wait for the close of today and monitor closely to see if this is a definitive strong follow through or just a test of a high. Ideally the market can move higher towards the next objective of 13270 and the old high of 13338. At this point depending on the reaction at these levels traders will be able to ascertain the strength of this bull run. The chart patterns certainly support a bullish case with higher highs and higher lows but it is the divergence on the monthly charts that are of concern. Hence watching the break of support levels should be monitored.

Dow Jones

Crude Oil shows continued strength

As mentioned previously, Crude Oil would have needed to have traded above $96.30 which has now taken place. This suggests that the commodity is likely to continue higher towards the psychological $100 level. However, Oil should remain above $92.66 in order to maintain this bullish view. As the weekly bar has turned blue and we have seen a continuation this week the probability of higher prices are more than likely. Also we note that the 100 period moving average has been reached and oil would need to stay above this indicator and above the $96.30 level for intermediate term bullish activity.

Crude Oil