Footsie Fortunes

AS WE await the US Federal Reserve's decision on interest rates, let's look at the last week. We talked about the Dow last week and commented on a solid upward move should the index close above 10,500.

For three days the market topped out at 10487, just 13 points from the significant breakout level. So we need still to keep an eye on the close of the Dow, with tonight's interest rate decision potentially being the catalyst for an move upwards.

Meanwhile, the Footsie remains in its 12-month bull channel, despite several attempts to break below the major support trend-line. Within this channel the index has been ranging with decreased volatility for the past two months.

This decrease in ranging volatility has formed a triangular pattern on the daily chart which may lead to a large breakout – either way! A close below 4430 would constitute a break downwards and a close above 4520, a break up. The anticipated move upon a break is a hefty 200 points.

Current mass speculation on interest rates, oil price and currencies means that the world is sitting tight and waiting for the Federal Reserve.

This macroeconomic dominance over microeconomic factors, means that all investors, whatever their analysis reference, should be aware of both technical and major fundamental factors.