The return of the bear market

From now on we are in a bear market, that's according to the 34-day BTI.

The 34-day BTI is used to assess the main FTSE trend. When the 34-day BTI is positive the FTSE is in a bull market, when the 34-day BTI is negative the FTSE is in a bear market.
The indicator became negative yesterday. In addition the BTI, an indicator measuring investors mood, is still declining at a time when the FTSE is rising. This bearish divergence is a common feature of bear market rallies. In a bear market, rallies should be accompanied by declining BTI which is what we are seeing.

It has to be said that the news has been good recently, yesterday's manufacturing output in the UK and jobless claims and productivity in the US came in better than expected. Today's big news is the US nonfarm payrolls at 1.30pm. If the figures are good the market will spike, this would provide a good entry level to go short.

The FTSE may move moderately higher today but in the near term the trend is down, see chart.

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