A mixed week for the UK market with the FTSE100 down 57.8 points over the five-day period, but holding the support from the prior low.

A mixed week for the UK market with the FTSE100 down 57.8 points over the five-day period, but holding the support from the prior low.

The mid caps (see report) had a more volatile time of it, breaking below the 8,800 support and then quickly rallying up on Thursday for a move that must have surprised a few short-sellers.

What next? At Investors Intelligence, we remain on a cautious footing during this volatile environment, anticipating more range consolidation over the summer. Moreover,  further action to the downside can not be ruled out, particularly in view of the limited recovery seen to date from the breadth data.

At present, we favour re-establishing short-side trades for the UKX as the index rallies back into the MayJune resistance.

BREADTH: Still weak...

Our bullish % indicators show some signs of recovery, with Friday's action on the FTSE pushing many stocks to intraday shorter-term recovery highs, thus edging this P&F based indicator up 7.9% to 33.7% (see report).

As we have previously stated, a sustainable bull market needs to be supported by either rising or firm (averaging above 50%) breadth.

Although, Friday's session was certainly an improvement, we have yet to see this and  would like the bullish% for the FTSE100 to regain, and hold, the 40% level.     

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