Why Lloyds Bank and FTSE 100 are at a critical juncture

TL;DR

Lloyds may experience a decline after hitting its target zone for profits, while the FTSE is likely to move sharply lower after completing a wave C.

Transcript

hello it's john burford with chart of the week for monday the 21st of june the the longest day i don't know if that's significant sometimes markets make um major turns on or about these very important astronomical dates such as the solstices and the equinoxes and um and we could see something similar this time but let's go back to my coverage on ll... Read More

Key Insights

• 🧑‍🤝‍🧑 Markets sometimes make major turns around significant astronomical dates like solstices and equinoxes.
• 🥡 Taking profits is often overlooked, but it is an essential aspect of trading and investing.
• 💐 Lloyds has reached its target zone for profits and has started trading lower, indicating a potential decline.
• 🍳 Momentum divergence and a break of the lower tramline in Lloyds suggest a significant break and the possibility of a renewed downtrend.
• 👋 The FTSE is at a critical point, finishing off wave C and potentially signaling a sharp move lower in wave three.
• 💱 Buying the dip has been popular, but it may be influenced by changes in government and Federal Reserve stimulus.
• 🥡 The target zone for taking profits in Lloyds was in the 50 to 55 pence region.

Questions & Answers

Q: Why is taking profits often ignored by traders and investors?

Taking profits is often ignored because traders and investors become more positive as prices rise. They tend to enjoy their gains and may fear or overlook dips in the market.

Q: What is the significance of buying the dip and will it continue to be a motivation?

Buying the dip has been a popular strategy due to government and Federal Reserve stimulus supporting the markets. However, with signs of stimulus changing, it remains to be seen if buying the dip will continue as a motivation.

Q: What is the target zone for taking profits in Lloyds?

The target zone for taking profits in Lloyds was in the 50 to 55 pence region. The market went above the 50 pence mark on June 1st, and since then, it has started trading lower.

Q: What is the potential downside target for Lloyds if the decline continues?

If the decline in Lloyds continues, the first major target would be a gap at around the 44 pence region. If that is broken, the next potential target is the B wave low at around the 32 pence region.

Q: What is the outlook for the FTSE based on the analysis?

The analysis suggests a bearish stance on the FTSE. It is at a critical juncture, finishing off wave C and potentially entering wave three, which may lead to a substantial move lower, especially if it breaks below a key level.

Summary & Key Takeaways

• Lloyds has reached its target zone for profits at around 50 to 55 pence and has started trading lower, indicating a potential decline in the stock.

• A break of the lower tramline and momentum divergence in Lloyds suggest a significant break and point towards a renewed downtrend, with a major target at the 40 to 44 pence region.

• The FTSE is at a critical juncture, with wave C finishing off and potentially signaling a sharp move lower in wave three, especially if it breaks below a key level.