10th October 2017
Slow drift down yesterday with the bulls failing to reach and retest the 7535 area, with light trading in the US during Columbus Day. That said it was a very slow decline down to just below the 7500 level but the overnight bulls have brought it back above this level. Fairly quiet on the news front also, while traders await minutes from the Fed’s last meeting which are due Wednesday and JPMorgan Chase & Co. kicks off earnings season on Thursday. In Washington, a top Republican senator sparred verbally with Trump, raising some concern that planned tax reform may be stalled.
FTSE 100 Outlook and Prediction
For today I am feeling similar to yesterday with an expected dip down from the 7530 area to test the 7450 or lower area. As such, I think an initial short off any early morning rise is worth a go. If the bulls can push above the 7545 level then that’s invalidated and a rise to 7600 looks distinctly possible. We are approaching earnings season later this week so may well see a bit of profit taking ahead of this as we wait and see what they are like.
Interestingly, we have broken below the 10 day channels, both Bianca and Raff, with the bottom of them now becoming resistance around the 7510/7520 area. Something to bear in mind, and the 2 hour chart is also bearish, showing resistance at 7534 still. If its weak today then the 2 hour coral is likely to turn red with 7526 resistance kicking in.
If the bears break below yesterdays low at 7485 then the fib level is 7455 looks to be decent support in the short term, with 7400 and 7350 below here. I think yesterday’s thoughts of a weaker start to the week, followed by a rise for the second half still holds true. We still have simmering tensions over NK, with all sorts of shenanigans going on – another reason for a bit of risk off early this week.
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