7490 FTSE 100 resistance | dead cat bounce or buy the dippers?

19th May 2017

Well as expected we got the V shaped dip and rise pattern on most indices yesterday. Shame the FTSE dipped slightly lower than the 7411 support suggested, but it rose pretty well to the 7475 level from 7390 and has stayed there overnight. The S&P also bounced well, again, just moving slightly below the 2352 support before climbing to 2375. The Gold short worked well as you would expect as indices bounced, with a decent decline from the 1264 resistance area. Dipped below the 1250 again as well, but any further index weakness will probably see it break through the 1264 resistance area.

The FTSE 100 today sees resistance at the 7490 level on the 2 hour chart, and we will see if yesterday was a dead cat bounce after Wednesdays drop, or a proper buy the dip move. The ASX200 once again had a dip and rise session on Friday so we may well see a similar pattern. But bear in mind its a freaky Friday session and can be a bit strange!

FTSE 100 Outlook and Prediction

FTSE 100 Prediction
FTSE 100 Prediction

For today I am planning on shorting off the 2 hour resistance at the 7490 area, and am also watching the fib level at 7504 for some bears to reappear. I think we might well see a decline down to the pivot area at 7450, and possibly further if investors get nervous again and are wary about holding longs over the weekend. Trump is visiting Saudi this weekend. After Saudi Arabia, Trump visits Tel Aviv and Rome before heading to a NATO summit in Brussels and the G-7 meeting in Sicily.

Should the bulls break 7504 then we are likely to see them be pretty boosted and get a rise towards the 7586 area where we have the top of the 2 Bianca channels, though I think this may be a bit optimistic for today.

On the bearish side, if the bears were to break below the pivot at 7450 then a revisit to 7400 looks likely, with a brief pause at 7439 where we have the 30min coral (now green and showing the trend is up on this shorter time frame. The trend on 2 hour and above is bearish still).

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26 Comments

  1. Morning chaps. Dow shorts closed last night and closed 2x short on ftse.
    Doubled short position this morning and I am currently 10x short. Bearish megaphone on the 1hr. Going down to meet my target. I think I will close at 7000.

        1. Agreed – I was long dax earlier waiting for the pop… took a few failed attempts at getting in safely, but eventually got there..
          I had to ignore the fact that eur and gbp were rising against the dollar which used to cause the dax / ftse to consider going down…
          Gold was telling the truth of the correlations…

          1. I think it could easily push past 7500 inoodle and maybe quite a lot higher if cable sells off again like that 100 pip dip yesterday…..I closed two cable longs at 1.3034 yday and it dipped to approx 1.2930 or so….more luck really I expected it to drop slowly really….its crept back to 1.3006 presently but another trip down combined with a strong Dow and I think the Ftse is primed for a jump up….it’s going to keep us guessing so it won’t be an easy trade but let’s see how it plays out….good luck….

    2. Do you genuinely expect a big sell Icarus?
      I hope there is.. I’ve loaded up on the shorts..
      A oneway ticket to a big or very quiet weekend 🙂

  12. Hey Icarus i wouldn’t be loading up on shorts down here this low……it’s only just getting bullish :0)

    1. I think probably so do most people,it’s been reluctant to leave its comfort zone of 60-70 all day…..but that’s when it bites you ….

        1. Agree. I noticed you made an interesting comment about feeling the price action. I felt that too but in the opposite way ofcourse. We may head a wee bit higher before a sell off kicks in I think

  15. Oh well not quite 7500… I saw 98.5 …..all the best have a great weekend all…:0)

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