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During Tuesday morning’s trading session it looked considerably more likely that the FTSE would be breaking back below the psychological 6000 level. Crazily enough though, it is now making its way back to the 200-day moving average. Trying to get a handle on the thin volume influenced volatility of the equity markets is proving to be rather difficult.
Shortly prior to the US open, final quarterly US GDP came in at 1.8%, much worse than the expected and previous reading of 2.4%. Where this will leave the Federal Reserve’s thinking as far as its ability to reduce QE is open for debate. The US economy is on the right track and has been recovering over the course of the year, but the recovery is a fragile one and figures like this will keep the debate going.
IG clients are still long on the FTSE by 65%, but there is a lack of conviction in the markets’ ability to turn the bullish trend around if volumes are anything to go by.
With gold continuing to collapse and other commodities struggling to show form, the FTSE’s mining sector is again weighing. For the time being at least the FTSE is edging away from the 6000 level, but how long that can last for is far from certain.