Now it may well not last and clearly these P&F charts don't show momentum indicators which will show how over-extended this and other indices are, but that aside there can be no denying that this rally, QE juiced or not has been impressive. This is a 50x3 closing P&F chart so to get a reversal to the upside or downside, you need a 150 point movement. But just look at the recent movement - the current column of 12 X's is 600 points on the index, without interruption (the 25x3 chart shows an uninterrupted run of 22 boxes of X's without even a three box (75 point) reversal, thats 550 points up without being checked!!).
Even if you look at the price action in the second half of last year, we had a series of revesals and like several other indices, it looked like the FTSE was going to roll over in the summer until it reversed to the upside.
Resistance was hit twice at 5,400 but the FTSE has pushed on through that and we now have active targets to the upside of 6,000 and 6,150. The April high of 5,800 is only about 130 points away now so that will be the next test. One senses that it is going to require something similar to the April/May 'flash crash' to halt the FTSE's bullish stampede higher. The Emperor will have to reveal his lack of clothes to all!
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Noting that some other indices (such as the FTSE Mid 250) have taken out their April highs, I guess if the FTSE could do similar one would have to start looking at the 'larger' double top, ie the 6,700 October '07 level. Preposterous maybe but just something to consider. And bear in mind too that if we had a three box reversal today, that column of 12 X's would be giving an unactivated upside target of 6,900!
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