With volatility spike in British Pounds, the more interesting story to me is how stocks are pushing up against the former all-time highs in 1999. Since that historic era in the stock market, British stocks have continuously attempted, and then failed to break through and finally make a new all-time high. The London FTSE 100 has been trying to stay above that historic market peak for almost 17 years.
Here is a chart of the London FTSE 100 going back to the late 1990s. The more times that a level is tested the higher the likelihood that it breaks. The reason is that there comes a point where anyone willing to sell at those levels will have already sold, ultimately leaving fewer sellers than buyers. This is when you get a “breakout”: [Read more…]