28th April 2017
Good morning. Fairly flat day again on the FTSE 100 yesterday, despite ECB President Mario Draghi showing growing enthusiasm about the state of the euro-area economy. The FTSE failed to test the 7280 recent resistance level again, and didn’t even attempt the 7300, though resistance still remains here for a swing short opportunity. The Gold long yesterday didn’t really do much, as that was also flat. Amazon and Alphabet results helped the bulls a bit after the bell but gains were short-lived – the S&P500 rose to 2392 then fell back to 2388. I wouldn’t be surprised if we get weakness in indices again and close the gap from the start of the week – 7135ish on the FTSE – soon.
EBC leaves things unchanged
The European Central Bank left its ultra-easy policy stance firmly in place on Thursday as inflation continues to undershoot its target into the fifth straight year, even as economic growth is on its best run since the global financial crisis, Reuters reports. The ECB even maintained its bias for further policy easing, leaving the door open to further rates cuts or an increase in asset buys. This is in line with market expectations but at odds with calls from Germany, the euro zone’s economic powerhouse, for a gradual reduction of stimulus.
FTSE 100 Outlook and Prediction
For today I am thinking shorting the rallies is a good play. The bulls have failed to break the 7300 level and we have resistance at 7292 (fib level and R2) and 7298 for today. Below that 7270 is also resistance. If the bulls were to break through the 7300 level then I think we might see some stronger resistance at 7330 and this is a decent swing short area.
Support wise, the 7226 level with S1 looks good initially, though below this then 7200 is highly likely to be tested if it breaks as we have a key fib level here and just below S2 at 7204 (small bounce here then maybe). S3 at 7183 then Mondays gap at 7135 are the next areas of note.
So, really watching for decent short set ups today, though could of course get yet another weird Friday! Its also the end of the month so we may well see some profits being banked as we head towards the start of “sell in May” next week.