Another flat day ahead but watching 7480 for support. Buy the dips.

8th August 2017

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That was a pretty lacklustre Monday in both the UK and US sessions and not too much of a bull Monday. However, the Dow eked out a small gain – just enough to lift the 30 stocks to their ninth record high in a row and 10th straight gain overall.. Traders awaited to see if the dividend buyers brought things up, while at the same time awaiting more clues on global economies and US rate decisions, with inflation data due Friday.

In the UK we have factory output data for June on Thursday, and again, will start to give a flavour of the state of the economy and a clue for rates. The dividend tomorrow of nearly 41 points will keep the FTSE support for the next two sessions.


FTSE 100 Outlook and Prediction

Daily FTSE 100 Support Resistance Channels
Daily FTSE 100 Support Resistance Channels

We had a tiny effort at a bull Monday yesterday, however we might well see a bit of bear Tuesday today if we mimic what the ASX200 did today. I have initial resistance at the 7534 area so if we get an initial spurt up to here then a dip down looks distinctly possible. Might even dip down to the 7480 area. The mainstream support and resistance levels today are pretty bunched with S3 at 7494 so not far below where we are as I write this.

The dividend is still going to support things for the moment, however some of the members and I were talking yesterday and as everyone expects a rise for such a large dividend, don’t be surprised if it doesn’t happen. However, the dividend is applied tomorrow, but might well support things today.

With yesterdays lacklustre showing, the 2 hour FTSE 100 chart has gone weakly bearish with resistance at 7529 also. However, I am still thinking today and tomorrow buying the dips is a good move.

So, watching 7534 and 7575 as resistance and 7480 as support for today.

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25 Comments

  1. Price looks capped at 7540 on this move. They never make it easy with the big divis so wouldn’t be surprised if it goes down between now and then with a random rally beginning somewhere. Think the last 20+ one in May the market was down 50 points at one point on the day so it’s hard to just buy and hold for it

    1. Had a FTSE short order at 7534 which just missed. Short on Dax 12265 and SP at 2478.5 currently.

    1. What do you plan to do about the divi Icarus? I’d be short and hold here whilst under 7540 but can’t take the trade as don’t want to pay the divi

      1. If you want to go short Mcg why don’t you short it on a futures contract….no divi to worry about…..just a wider spread…

        1. Because the futures take into account all the divis between now and expiry. So if you sold the September contract the prices will converge tomorrow after the divi is deducted. Keeping it simple, if ftse was 7530 tomorrow at the close we’re going to gap to 7490 and the futures won’t move and will stay around 7490. Issue is, the cash market will still be showing 7540 as the resistance area so I wouldn’t necessarily sell 7490 as it’s too far from resistance. They have a habit of closing that divi gap anyway the following day so going to try and get short then if not else changes

          1. Well if the market doesnt sell off by lunch tomorrow i would be looking to add long hedges – ideal if it goes a little lower.

    1. Yeah, I got confused on this matter. Don’t know what to think. Found that video which gave the info I know. I think they mean small accounts to start with. If with £1000 starting account you gain £600 on top it is 60% and it is not a miracle. Oh well, I guess the bigger the account the less you risk.

  4. Hi all,

    I’m short on dax @68 and Dow 22100.

    Will long FTSE if it dips as it will rally I think with divi hunters.

    Had a great 450pts on bitcoin. Bought last Friday at 2860 and it went bonkers…could have easily of fell though. IG don’t Saturday trade Bitcoin which was a worry when most others do. I could see it rising but couldn’t close, just as well in the end!

  5. Its a mighty dividend but I wouldnt be chasing it today. Whats the point? The 40 points you gain will immediately disappear, now if I had entered a few weeks ago at 7300 of course I would stay in for the divi, but the risk of an evening correction from which you cannot escape is high, making this a dangerous entry point. And thats from someone who is bullish stocks, but I would rather buy a correction ora sell-off and make 40 points from a bounce. Less risk. On a more general note, cant see anything I want to buy. Stocks and commodities have had a good run and are due a correction, although I wouldnt blame anybody who bought a few weeks ago for hokding to see if they will run higher. Gold may be starting its next leg up. Woukd like ti see an August wobble to buy into, maybe even 7450 on FTSE could be an entry.

  6. Closed dax short for +50pts.. may run more but think it will retrace and fall again later????

  8. I’ve been expecting a bit of a sell off today but it’s holding quite firmly so far….wouldn’t be surprised though if it sells off unexpectedly…..

    2. Im short on the FTSE at 7534 so hoping it heads towards 7480….. not too much to ask is it!?

      1. Probably play out that it rallies this afternoon to 7580ish then steadily declines, stopping out all the retail punters that start buying for the divi

Comments are closed.