Markets have rallied strongly since my last report four weeks ago, with the Dow (INDEXDJX:.DJI) back up to 10624 from 10099, and the FTSE100 (INDEXFTSE:.FTSE) now at 5625 up from 5142.This in fact takes FTSE to a new high for this bull market, which if you read my column regularly you will know was called here in May last year at 4348.
However, I did not expect it to push ahead so soon after the recent correction - I felt a period of ranging would be necessary before the second stage of the bull market got under way. That could still happen because FTSE is now quite extended in the short-term, and some pull-back is likely. If you look at the Point & Figure chart, box size 25 points, you will see a long column of x's on the right, which looks vulnerable now to a small correction.
As readers of this column will know, I tend to focus on the Dow & FTSE, however the two most interesting charts at the moment are the FT30 and the FTSE250. Both have broken up out of multi-month ranges - a very bullish development. It's extremely unlikely that indices based on the same stockmarket will diverge, and I regard the breakouts on these two as pointing the way for the main market. In addition, the Nasdaq100 has also moved to a new high for the current bull market. The evidence from the stockmarkets remains compelling - THIS IS STILL A BULL MARKET. And for those of you who've just joined us, my target still remains 10,000 on FTSE by the end of 2012.
Last time, with £/$ standing at 1.57, I wrote:
"There's scope from here for a decent move (down) as it has just broken out of a seven month range - a significant amount of time".
I set a target of 1.48, and said: "This move could be quite fast as there's no support on the chart". With currencies there can be some variation in the prices that appear on the charts depending on which time-zone the chart is produced in, But WorldSpreads show a low of 1.4785 on 1 March, so that's a pinpoint accurate call. From what was then a very oversold condition, it has…
