Article 50 can be triggered | FTSE 100 Resistance 7125 | 7080 support

2nd February 2017

FTSE 100 Support 7083 7080 7064 7052 7029
FTSE 100 Resistance 7119 7127 7137 7144 7153 7164 7218

Good morning. The FTSE 100 popped a bit higher than the 7155 resistance area yesterday to test the weekly pivot at 7170 before dropping again to the 7100 level. We got a small bounce there unlike Tuesday which saw a bigger bullish jump, and overnight further weakness has moved the FTSE below 7100. 7080 is the next key support as below this then 7030, with 7000 distinctly possible. It also starts to look quite bearish below that 7080 level. The dollar continues to rise, which has capped the FTSE bullishness for the moment. 12900 possible on cable I think. As I am sure you know we had the Parliament vote last night and PM Theresa May is now clear to trigger Article 50 and will be releasing a white paper today on the plan later today. Wednesday¹s vote means the Government¹s Brexit legislation has cleared its first hurdle and Mrs May is on course to trigger the process by her March deadline.

Company results continue with Facebook beating last night, and then we have the NFP news tomorrow, forecast for a 175k increase.

FTSE 100 Outlook and Prediction

FTSE 100 Prediction
FTSE 100 Prediction

The bulls still didn’t manage to reach 7185 yesterday and in fact its looking more likely that 7030 is going to be seen before too long. The S&P continued its bearishness dropping from the 2289 level. I closed the short at the target at 2277 though it since dropped a bit further to 2268. 2255 looking likely on that. For the FTSE today there is resistance at the 7125 area where we have a few things, namely the 30min coral, the daily pivot, and the 100 Hull MA on the 2 hour. The bulls might have a bit of a job to break this area, but if they do then a test of the 7144 10 day Bianca channel is possible.

It looks like its still best to short the rallies for the moment, though the bulls will be keen to get the price above 7100 this morning. However, for the bears they are aiming for a drop down to 7080 where we have the next daily support area. Below this things start to look a bit ropey, with 7000 or below distinctly possible. However, there are a couple of daily supports before that looking at the Bianca channels, 7064 for the 10 day and 7029 for the 20 day.

The 2 main levels I am watching today are 7080 for support and 7125ish for resistance.

87 Comments

  1. Morning.
    Well, here we are then @ 25.
    Declining momentum after that decent bounce makes me think its as good a place as any to start today’s short.

    1. Thanks tmfp. Had a short order sat at 7125 which just missed prior to that little fall. Think its just teasing me!

      1. On a scale of 1-5, how would you rate it as a support area?
        It doesn’t immediately strike me as that important, although it will probably coincide with slightly oversold on the daily if it happens soon, but I think if/once this decline accelerates I like the look of 7020, 50% retrace as an area to take some profit.

        My overall short plan is predicated on sharp sell offs sparked by macro political events, so it could plow through technical support.
        In between, I’d expect the existing bull market to still prevail in the form of low volume drift ups, so it makes conventional swing timing difficult.

        1. Thanks tmfp. Think shorting the rallies is still the right move myself. 7020 could be good then!

        2. Taken some short out at 95 looking for temp support around the low and o/s rsi. 15 reshort area now.

          2. Had a feeling that might be a bit too early. Averaged up to 24 and see how it goes, but will look at reducing a bit should b/e present itself.

  2. Morning guys…I’m surprised to see Ftse still around 100 area…..I took a small long earlier at 103.8 out of that at 122.3 and I’ve re longed again at 102.8 this time….only small just nibbling away at the moment……I really thought it would be stronger than this….

  3. From 7092 actively rising, did reach 7080. I had a punt short 11617 for 5 points on Dax, doesn’t feel strong to me. Although I could be wrong and it will break 11604 later today.

  6. Both FTSE and DAX very grindy grindy, the sort of low volume markup rallies I mentioned in between sell offs.
    Would like to think we may be late morning topping off, but as anstel says….

    1. Well, on the time honoured principle that resistance becomes support when broken, I’ve slimmed down what was getting to be a rather large short position around b/e plus a bit @25.

      1. Looks like weak hands again, losing my bottle in my old age 🙁
        Still, got quite a bit left including the dear stuff from yesterday 🙂

        1. From time to time there’s strange FTSE behaviour on the stroke of noon, I think it’s some sort of settlement procedure, though what I don’t know.
          Any idea Nick?

          2. BoE 9-0 MPC Votes To Keep Rates On Hold At 0.25% And QE At £435bln

            BoE: Forecasts For 2017 Growth & Inflation Both Rise To 2.0%

          3. Ah, thanks that sort of explains the rally, but not the flash down to 10, algo fun and games I guess.
            Anyway, all looking strong at 50 so time for a re short soon methinks.

    1. I think it’s a bear trap this lot……it’s makes you feel comfortable going short with all the recent sell offs ,then when you have a bearish mindset it bits you……

        1. We had a cat once that lulled you into a false sense of security just before it bit and scratched you…….good training for the Ftse….thanks cat….

      3. Yeah, certainly taken most of us by surprise, DAX is like a mad thing.
        Neither of them have done anything meaningful other than bounce until they break and hold 180/750 imo.

  9. I missed all the fun while in the caffe today. Nice lunch though. Now hoping for a bounce to 11627 or at least 11634. Am I so lucky to have that?

    3. Oh, looks like 11668 was a pivot, I hope it’s planning to break it rather than fall to 11613
      You see, tmfp, I was tempted, but after yesterday I didn’t risk. I should have, now I see.

  10. And off we go again, a bit more short at 65 for me, today’s going to one of those “Wtf was that all about days?” hopefully.

    1. Just increasing my overall short mate, obviously looking for a return to the lows, but probably not today…..

      1. I’m in the same boat as you tmfp. My first short was at 7080 back in December but have not been day trading and slowly increasing my average position.
        Im sure Nick will remember me panic emailing him at the start of Jan in disbelief of 7200 (Didn’t help I was traveling across Icleand and would come out of Cave to find the FTSE Rallying)

        Overall I’ve got shorts from 7300, 7220 and of course 7080 with an average of just over 7157.

        I’m planning for bigger picture stuff and aiming for sub 7000 although if we start to pivot around 7030 I may take some profit and analyse my situation. Although the extra time has allowed me to dive in the world of Shares which is nice change from the indices.

          1. The worst isn’t it! A few stressful mornings but I refused to let it put a downer on the trip – anyway that wasn’t the biggest shock of the trip, ordering an £8.50 pint hurt the most.

      1. It’s more about raising the average value of the whole short position than a day trade Jack.
        Seems an age ago I traded at 7095….

        1. Whats your average if you don’t mind me asking? Been an alright drop off the 10 day Raff at 7165 so far. Still wondering if we will see 7185 this week. NFP tomorrow to throw into the mix as well.

          1. Including adding back profits from trading of it, 66.5 on 5x my basic stake. Thinking about a 25 point stop loss atm.
            I’ll go up to 10x max on this one.

          2. I just have the feeling today was unreal.
            I’m not entirely comfortable with the idea of waiting for the unexpected for the position to come fully right, but these are extraordinary times.
            Bu yeah, always nice to be in front and the third rejection of 60ish puts the pressure back on 7100.
            I’d like to see 800 go on the DOW this week and then the 50SMA, then things could start motoring.
            Hopefully 🙂

    1. Might need a second round of sell offs on cable from this 1.2555 area to get it going up……. Wouldn’t surprise me….

          2. You can remove the top one and continue on the lower trade now, or the other way round: remove the low one and continue on the top one.

        1. Cable I’d GBP/USD….it is nicknamed cable because when they put in the first undersea cable from London to New York it made it a lot quicker to trade the pound against the dollar…..

          2. Just had a look…..the first truly successful transatlantic cable was completed in July 1866……

          3. Oh, it’s interesting, I never heard of it. I’ll remember about cable. I thought it should be something to do with forex.

          4. Just reading abit more about it……the first cable failed and the second succesful cable was laid across the ocean floor by Isambard Kingdom Brunel’s ship the SS Great Eastern …when they got the second cable successfully working they actually managed to pick up the original first cable from the seabed with a grappling hook and splice a new cable to it so they had two functioning cables then….apparently they hooked it up but then lost it and it took two further weeks to find it again…amazing it was at a depth of 2.5 miles down……makes me proud to be British…..

  13. Sorry for anyone holding short positions but this is looking more favourable for my longs now…..I can see it steadily rising from here but let’s see how it pans out…..Good Luck tmfp with your short it may sell off after NFP …..

        1. I’m considering a possible overnight grind up might be on the cards….that’s what I’m thinking …..

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