Here's when FTSE 100 bubble will burst

FTSE this week (FTSE:UKX)

Something a bit scary ended last week. The FTSE trashed the uptrend since the start of December due to whatever was announced at 10am on Friday, and the downward break proved very deliberate.

While the drop even broke (briefly) below our postulated 7,207 target, the market described an amazing recovery which leaves us breathless for what is coming!

As usual, though, we've a problem as the bounce from "bottom" (which it broke briefly) needed better than roughly 7,267.16 to signal future upward oomph can be expected.

However, the FTSE closed the week at 7,243.7 - below the uptrend and in quite dangerous territory, especially as the market has already illustrated weakness below 7,207 is present.

But the market did bounce, fairly convincingly, and after-hours futures witnessed the FTSE reach 7,272 before the futures market closed for the weekend and everyone went to the pub.

Perhaps some optimism is allowed as should the market manage above 7,267 this week, we'd be looking for growth toward an initial 7,324 points with secondary, if bettered, at 7,425 points.

Given recent pitiful market movements, we're perhaps being too gullible dangling such strong incentives, but the index would need to move below last week's low of 7,192 to burst our bubble.

At this point, we'll take the attitude of treating the market as if it were a share and, if it were, we'd strongly suspect it's stuffed.

The FTSE did close below the immediate uptrend and the drop to 7,192 was 15 points below our expectation. And, once again, we've a week starting with a Monday and Mondays often stink.

The scenario now is of movement below 7,192 leading to 7,173 points initially. Secondary, if broken, is at 7,104 points and the risk of taking the FTSE out of the Big Picture mapping which allows of 7,520 as a "top" on this cycle.

Additionally, if the red line on the chart breaks, chart pattern enthusiasts will start shrieking about "Double Tops", and then we will mention 6,975 points, maybe even 6,850 if we lose our sense of humour.

This article is for information and discussion purposes only and does not form a recommendation to invest or otherwise. The value of an investment may fall. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.