FTSE 100 forecast: the numbers that really matter

Commentators appear equally split on the FTSE's prospects, but our chartist reveals his prices to watch.

FTSE Big Picture (again!) (FTSE:UKX) 

Weekends are always a great time to be miserable.

Financial commentators appear equally split, one camp prophesying strong recovery from the recent lows, the other camp insisting the recent bounce has been false optimism and we're all doomed.

To be honest, if we rely on the numbers, we are in the "doomed" camp, thanks to the FTSE 100 triggering potentially serious drops.

Our "if it were a share" thinking demands we view the index as heading to 3,990 points or so.

However, during April, the FTSE has blundered around within a 400-point trading range, one which calculates with a fairly straightforward trigger level.

What if the FTSE exceeds a trigger at 5,940 points?

We're now supposed to witness recovery to an initial 6,098 points with secondary, if exceeded, calculating at 6,501 points.

These numbers are pretty amazing, the secondary driving the FTSE into a region where a "what was all the fuss about" 7,550 points shall be viewed as exerting a big picture attraction.

Now we've established an upward trigger at 5,940 points, where's the trigger of doom which shall spell further trouble ahead?

Visually 4,900 points appears to prop up the Gates of Hell as movement below risks being rather traumatic.

Weakness now below 5,630 should give early warning of real danger ahead, this allowing reversal now to an initial 5,440 points.

If broken, secondary is a tame sounding 5,260 but as this takes the index solidly into the land of lower lows, the market could plunge to 4,820 quite easily.

Obviously, this breaks the 4,900 level, making further slides almost inevitable.

Source: Trends and Targets. Past performance is not a guide to future performance.

Alistair Strang has led high-profile and "top secret" software projects since the late 1970s and won the original John Logie Baird Award for inventors and innovators. After the financial crash, he wanted to know "how it worked" with a view to mimicking existing trading formulas and predicting what was coming next. His results speak for themselves as he continually refines the methodology.

Alistair Strang is a freelance contributor and not a direct employee of Interactive Investor. All correspondence is with Alistair Strang, who for these purposes is deemed a third-party supplier. Buying, selling and investing in shares is not without risk. Market and company movement will affect your performance and you may get back less than you invest. Neither Alistair Strang or interactive investor will be responsible for any losses that may be incurred as a result of following a trading idea.