Saturday, March 17, 2012

The lagging FTSE

I was having a discussion the other night with a couple of traders about why the FTSE100 was lagging compared to the other major indices. The S&P has this week breached the 1,400 level, and the German DAX went through 7,000 like a knife through butter. Yet the FTSE hasn't even been able to test 6,000. Is there a reason for this? Well, there may be many, but good ol' price action may be giving us a clue.

The FTSE has a number of big-cap mining shares in it, and the couple of charts shown below may help us understand why the index is lagging:

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