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FTSE gap gives way to gains but they could be temporary
The news overnight that the Greeks have voted against the latest bailout proposals led to substantial overnight gains across the board. Much like the gap lower last Monday, the initial weakness appears to have been somewhat overshot and we are seeing a substantial amount taken back as the FTSE climbs higher. However, much like the moves seen last week, I do not expect us to move back towards the range seen throughout the second part of last week (6568-6623) anytime soon. Thus any effort to regain the 6568 (50% retracement) level is likely to be sold into. While I do expect to see further negotiations in Greece, an immediate agreement is unlikely to happen immediately, and as such I doubt anyone will become too bullish too soon. Thus I am bearish upon seeing a reversal sign in the 6550-6568 zone. Last week saw a bearish engulfing pattern signal the end of the resurgence, could we see the same today?