Weekly monitoring of the Italian benchmark index.
Why do we do it?
Check our strategy page.
My proprietary DBBT indicator identifies misalignments between the current price and the expected technical level on the main indices.
Every week, the FTSE MIB is in our crosshairs.
The hunt is on.
A choppy week, resolved only in the final session.
For four sessions, the FTSE MIB traded within a nervous range without giving clear signals. On Thursday, a gap up and a strong acceleration pushed the index above 50,000 points, in what looked like the decisive breakout to invalidate the system’s short position.
Friday’s session, however, flipped the reading. A heavy day in percentage terms, developing almost entirely below Thursday’s levels, with just a few points separating the open from a technical gap down. The FTSE MIB returned to Tuesday’s levels, closing at 49,116.47, slightly below the previous week‘s close (-0.35%).
The system therefore avoided a technical invalidation, but it remains to be seen whether Friday’s action is enough to fuel, in the coming week, the reversal that has been overdue for weeks now.
Bulls vs Bears
infographic: FTSE MIB weekly – Bulls vs Bears
A week that looked bull-dominated through Thursday ended with a bears’ victory.
The Fear Indicator sits at 80%, deep in the red zone. A level that, even within a tight weekly range, shows the market now concretely fears a short-term reversal.
The Big Picture
chart: FTSE MIB weekly
A low-volatility week that nonetheless produced a new yearly high at 50,050.35, marginally bettering the previous one at 49,898.95. The psychological 50,000-point barrier, however, appears to play an active role: the market touched it and was rejected.
The structure remains one of higher highs and higher lows. The moving averages are perfectly aligned and all still rising. The MA5W is showing a slight overextension not seen in three weeks.
The weekly close at 49,116.47 is negative both relative to the weekly open (49,328.01, -211.54 points) and to the previous close (49,289.54, -173.07 points, equal to -0.35%).
Volatility Indicator
chart: FTSE MIB – proprietary Volatility Indicator
Last week’s reading finds full confirmation. The indicator drops further to 5.11%. The effective range in which prices move keeps compressing, despite prices having updated the yearly high. New highs are being reached with increasingly marginal shifts, a sign of a trend in its exhaustion phase.
The MA5W of the indicator bends decisively downward. All the other moving averages computed on the Volatility Indicator are now negatively sloped.
Range Weekly %
chart: FTSE MIB – range % weekly
This week’s reading brings the indicator back to 2.32%, the same level as two weeks ago. Lower values are found only in January. Last week’s spike to 5.21% is confirmed as an isolated anomaly within a range compression that has been underway for weeks.
The MA5W is dropping rapidly and dragging the slower averages with it. The overall picture is consistent with what the Volatility Indicator signals: both indicators are converging downward.
BCP3
chart: FTSE MIB – BCP3 weekly
The indicator drops further to 4.49%, continuing the descent underway for weeks. The negative swing flagged in previous analyses now has a high probability of materializing as early as next week.
The critical point will be confirmation. Over the past ten months, every downside attempt has fizzled out around the -2% area without ever reaching -3%. If the swing triggers, it will need immediate confirmation the following week to avoid yet another bounce off the same threshold.
Conclusion
The system remains short. The week did not worsen the situation, but that alone is not enough to consider the scenario resolved.
The FTSE MIB shows superior relative strength compared to the main European indices. The DAX closed with lower highs and lower lows at -1.54%. The EUROSTOXX produced an inside week with a negative close at -1.57%. The FTSE MIB, on the contrary, maintains higher highs and higher lows with a close at -0.35%.
This relative strength is the main source of uncertainty for the current position. Based on available data, the corrective move should materialize within two weeks, with higher odds on the first.
The market keeps showing resilience that exceeds the system’s expectations. The coming week will likely be decisive: another failed bearish acceleration would start to compromise the statistical quality of the expected swing.
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