FTSE 100 Market Report: Clinching the Bull Market Case

Sunday, Dec 05 2010 by
14
FTSE 100 Market Report Clinching the Bull Market Case

As regular readers will know, I've maintained a bullish stance overall on the key indices throughout 2010, and we've been rewarded with further gains since my last report. Last time, the Dow stood at 11118, and it has climbed to 11382 - very nearly the highest level for the year. The FTSE100 has also advanced from 5675 to 5745 since my last report. Interestingly, for much of the time since the previous report, the markets were moving lower, but once again they have recovered strongly, a sure sign that the bull market - called in these reports in May 2009 - has plenty of upside left in it. I note a nice correlation with the progress of the stockmarkets and the declining clamour from the once vociferous bears (sold-out bulls?)

Two months ago I predicted that the DAX would be the first major index to break out (upwards) from its multi-month trading range. This it duly did, and it has continued to be the leader of the index pack. In my last report, it stood at 6601. It has since advanced to 6947. Like the Dow and FTSE, it also suffered a sharp, albeit relatively small, correction, yet has bounced right back and is a whisker off the year's high.

I said in my last report that the DAX breakout will "act as a precursor for the other indices". The Dow has now cleared the upper boundary of its range, and it is more or less inevitable that FTSE will follow.

The action of the stockmarket indices serves to underline what I said last time about where we are in the cycle. They have been moving higher since March 2009, and I regard most of the movement since then as the first stage (of three) in the bull market. I believe we are now starting the second stage with the breakouts from multi-month consolidations. The second stage should see an increase in participation as one-by-one the bears have to concede that their case is lost. This of course should propel the market onwards and upwards, rewarding the early bulls, or should I say the technical analysts who recognised and understood the significance of the Coppock signal in May last year.

Away from the stockmarkets, it's been a bit trickier, with anticipated weakness in the Dollar materialising only briefly. £/$ was at 1.60 last time, and initially did move higher as predicted, reaching 1.63, but short of the target at 1.68. Since then, however, it has fallen back, and currently stands at 1.58. The chart is in a neutral position right now, so I'll wait for the next development before making any further forecast.

Gold has continued its bull run, climbing to $1414 from $1358 last time. I mentioned a warning sign of a possible final stage in Gold's bull market in my last report, but stressed that we would have to wait for a clear signal on the chart before we try to call any reversal. I said that so far we haven't had one, and this remains the case. The price did shape up for a small head & shoulders top, but never completed it - which in fact is a bullish development. So the situation remains the same - this is still a bull market until the chart gives us evidence to the contrary.

This is my last report for 2010. Once again, I hope the effectiveness of the techniques that I use and teach have been clearly demonstrated by maintaining a bullish stance throughout the year on the key stockmarket indices.

May I be one of the first to wish you a Happy Christmas and a prosperous New Year.

(c) Robert Newgrosh


Filed Under: Markets, Technical Analysis,

About the Author's Financial Training

Robert Newgrosh Profile Image Promotional
New Skills Financial Markets Training

2003  Robert Newgrosh calls the bottom of the UK bear market more accurately than any competitor using a rare bar chart signal.   2004  He closes a trade which captures a move of 2,400pts on the Dow using pattern recognition on a Point & Figure chart. 2005  An incredible 5,600pt move… ...read more or visit website »


Disclaimer:  

As per our Terms of Use, Stockopedia is a financial news & data site, discussion forum and content aggregator. Our site should be used for educational & informational purposes only. We do not provide investment advice, recommendations or views as to whether an investment or strategy is suited to the investment needs of a specific individual. You should make your own decisions and seek independent professional advice before doing so. The author may own shares in any companies discussed, all opinions are his/her own & are general/impersonal. Remember: Shares can go down as well as up. Past performance is not a guide to future performance & investors may not get back the amount invested.


Do you like this Post?
Yes
No
17 thumbs up
3 thumbs down
Share this post with friends



FTSE 100 Index
Share Price ()
£6401.09
Change
-18.1  -0.3%



32 Comments on this Article show/hide all

Robert Newgrosh 5th Dec '10 1 of 32
1

If anyone would like a free introductory guide on Point & Figure chart construction, please call me on 0161 428 1069.

Financial Training: New Skills Financial Markets Training
| Link | Share
emptyend 5th Dec '10 Reported for Disruptive Behaviour
5
...we've been rewarded with further gains since my last report. Last time, the Dow stood at 11118, and it has climbed to 11382 - very nearly the highest level for the year. The FTSE100 has also advanced from 5675 to 5745 since my last report. Interestingly, for much of the time since the previous report, the markets were moving lower, but once again they have recovered strongly, a sure sign that.......

....it was time to write another report before the indices went back down again and ruined the spin?

| Link | Share | 1 reply
tournesol 5th Dec '10 3 of 32
2

Robert

I don't wish to be either rude or indelicate, but I'm mindful of the old adage that "those who can, do - those who can't, teach".

If I understand it correctly you teach other people techniques that can make them successful as investors - if these techniques are indeed effective, why don't you simply apply them on your own behalf rather than teach them to others?

just asking

T

| Link | Share | 1 reply
Robert Newgrosh 5th Dec '10 4 of 32
7

In reply to tournesol, post #3

I do apply them on my own behalf, and have always done so. That doesn't stop me from offering training.

Over the last three years, FTSE is down around 9%, and my personal pension, which I manage myself using the techniques I teach, is up 40%. The pension only uses funds, not individual stocks, and does not use leverage, so the outperformance has been achieved via market timing, i.e. being out during the bear market and getting back in for the bull market in May 2009.

Financial Training: New Skills Financial Markets Training
| Link | Share | 1 reply
thebuffoon 5th Dec '10 5 of 32
2

In reply to Robert Newgrosh, post #4

Hi Robert,

Is it possible to trade these indices, using your methods, in a SIPP?

Thanks

| Link | Share | 1 reply
Isaac 5th Dec '10 6 of 32

ee

Why do you think indicies are heading down? I'm bullish on the markets and believe they are heading much higher.

| Link | Share
Isaac 5th Dec '10 7 of 32
1

newgrosh

what is your prediction for 2011? What level do you see the markets going to max in 2011 ?

| Link | Share | 1 reply
Robert Newgrosh 5th Dec '10 8 of 32
2

In reply to thebuffoon, post #5

Of course you can trade indices within a SIPP, although my pension fund isn't structured as a SIPP.

Financial Training: New Skills Financial Markets Training
| Link | Share | 1 reply
Robert Newgrosh 5th Dec '10 9 of 32
7

In reply to Isaac, post #7

I predict you will address me more courteously in 2011 if you want a reply.

Financial Training: New Skills Financial Markets Training
| Link | Share | 1 reply
Stockhunter 5th Dec '10 10 of 32
5

I would like to know how the doom mongers have performed with their own portfolios. Robert seems to be consistently on the ball with his advice. Keep up the good work !!

William S

| Link | Share
Isaac 5th Dec '10 11 of 32
1

Robert,

Newgrosh is a Cool name.....Did'nt mean to offend!

What is your prediction for 2011? What level do you see the markets going to max in 2011 ?

| Link | Share
stock sleuth 5th Dec '10 12 of 32

Cynic

"A person who believes that only selfishness motivates human actions and who disbelieves in or minimizes selfless acts or disinterested points of view. "

Dictionary.com

| Link | Share

What's your view on this article? to Comment Now

 
 
You are feeling neutral

Use the £ sign in front of a ticker to turn £VOD into Vodafone PLC

You can track all @StockoChat comments via Twitter


About Robert Newgrosh

I've been a qualified technical analyst for over 20 years, and a trainer for 17, having run more than 500 seminars. My company, New Skills Ltd, was established in 1993, and has led the way in quality training in this field. In 2002, New Skills won the Shares Magazine "Best Training Company" award. I now focus on 1 to 1 coaching in technical analysis, particularly Point & Figure technique, which is the primary method I use for my forecasts.For the last four years I've been writing market columns every four weeks, and I'm pleased to say these have achieved a very high accuracy, quite possibly the most accurate in the UK having called all the major stockmarket moves, including the current bull market from May 2009.You can see a list of the highlights below, and this also includes other forecasts that I've made going back to 2003. My reports will now appear on Stockopedia, and I will be very pleased to answer your questions on my methods, or other technical analysis techniques.   more »



Stock Picking Tutorial Centre



Stock Picking Simplified

Stockopedia takes your stock picking to the next level with cutting edge Stock Reports & Screening tools.


Get started
or Take a Tour to find out more.