An irony of share markets is that they offer the most exciting prospects when they are most boring. Daily advances of 0.25% to 0.5% are preferred, with a modest pull back every fourth or fifth session, preferably against a backdrop of ominous warnings about falls to come. These are often the markers of a sustainable climb in market value.
That's where the index sits right now. The index has climbed 5% over the last three weeks, without showing signs of overheating. Gains are modest, pullbacks common. An underlying fear - of Brexit, higher US rates, European banking - accompanies the rise. And most of the pundits doubt the gains are holdable.
This brings us to a possible shift in strategy. Having actively traded investments according to where the index sat in its 4800- 5450 range (or thereabouts), investors should consider the possibility the index is breaking higher. After breaking the resistance at 5450 in July, the index failed and dropped back through the break out level in late August. Note how the pull back in the first weeks of September respected an up trend. Now, the index is testing the 5450 resistance again. Any move higher from here, to close above 5500, could ultimately see a test of the 2016 highs around 6000.
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