FTSE 10k by month-end? Probabilistic View
Watching the $FTSE closely. We're currently sitting at 10545.63, having tested the 10600 level recently. The upward momentum has been strong, driven by a mix of factors, but there's an increasing sense of it being a bit stretched. My take is the probability of seeing 10,000 by month-end, meaning a roughly 5% pullback from current levels, is around 40%.
My reasoning hinges on a few points. Firstly, macro headwinds are still present; the current rally seems to be outpacing some of the underlying economic realities. Secondly, technicals show divergence on some shorter timeframes, suggesting a potential loss of steam. Lastly, while central bank dovishness is a tailwind, any hawkish leaning comments or data surprises could easily trigger profit-taking, especially given how far we've run without a significant correction. It's not a conviction call for a crash, but more of a recalibration scenario given the pace of the advance.
40% chance of a 5% pullback by month-end seems high given current sentiment, especially if you're only looking at a few factors. What's driving that conviction? Are you seeing strong resistance at 10600 or just a general 'stretched' feeling?