October 31st 2024 – The FTSE 100 now begins to show a cluster of aggressive negative short-term trend signals reports Trend Intelligence, as current price (£8,110) trends some 4% lower than its May 2024 highs of around £8,450.
Trend’s Analysis (click chart to expand): In our FTSE 100 chart, Trend Intelligence uses its M* Momentum Indicator to report a negatively trending M* line, below both white and blue signal lines, and below the critical zero cutoff line. This is, and has shown over time to be, a negative trend signal.
In addition to our M* indicator, price currently trades below all 3 of Trend’s moving averages and Trend’s Japanese Cloud indicator, shaded in pink.
The combination of all signals corroborates Trend’s negative short-term trend rating on the FTSE 100, as we project continued aggressive downward moves in the index price in future days and weeks ahead.
Downside Sentiment: A sell-off in UK government bonds intensified today as investor worries over additional debt in chancellor Rachel Reeves’ Budget pushed UK borrowing costs to their highest level of the year. UK stocks subsequently fell as traders reconciled smaller chances of future interest rate cuts, reports the Financial Times.
Upside Sentiment: Back in August, Investors Chronicle reported that the FTSE 100 had outperformed Europe’s Stoxx 50 benchmark by 10 per cent since April, while having the lowest rate of volatility. Analysts at Deutsche Bank expect this to continue given the FTSE 100’s heavier weighting to value sectors, greater perceived political stability and a valuation that is “not only cheap relative to the rest of Europe but also relative to its own history”.
Authored by: Trend Intelligence, London
