Week Beginning 11/07/2011.

Value 12657.20

Volatility reduced in the market this week with volume also down relative to recent levels. This suggests that many market participants are waiting to see what happens next, a difficult question to answer given then continuing uncertainties surrounding macroeconomic events.

As predicted last week, the Fibonacci 78.6% level (Figure 1) has provided resistance to the markets rising value, however it is questionable as to how solid this resistance will prove to be in the short to medium term.

Figure 1

Likewise, although the RSI Index (Figure 2) continues to show the market as being close to over-bought, there is no clear indication that a sell-off is guaranteed any time soon.

Figure 2

Instead at present it has to be assumed that the market will continue to fluctuate around the current level with significant movements whenever a new rumour is heard.