Business Magazine

No Change There Then!

Posted on the 18 November 2012 by Andyepb

Chart of FTSE-100 at 16th November 2012

The FTSE has declined to support at 5600, falling significantly less that the Dow, and looks ready to bounce. Its fast stochastic is in single figures which is usually a good indicator that a bounce is imminent.

Across the pond, the US elections left things unchanged and the markets shifted focus to the “Fiscal Cliff” after a slight election day bounce, so it almost went to plan. The only aberration was that the bounce in the Dow didn’t reach the 50-day moving average (see below).

Chart of Dow Jones at 16th November 2012

The Dow has declined 1000 points in the last month or so, a fact which seems to have provoked surprisingly little comment. It has hit a major support level now though, at 12500, and its fast stochastic is also on the floor suggesting that a rebound is in order. It is difficult to see how big that might be, but I think getting back to the 13250 area is quite possible, particularly if the compromise noises coming from the Republicans amount to anything concrete. Tax rises have been a red line for them up to now, but, if they compromise on that, the fiscal cliff problem could dissipate quite quickly and we could see a substantial rebound.

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