9th October 2017
No missiles launched over the weekend despite Fridays threat, though the latest rumour is that NK may fire one today or Tuesday, probably the latter if at all as it’s another one of their “official” days. Overnight the futures prices spiked higher, with the FTSE testing the 7541 level, but have since dropped back. We also have a bearish 2 hour chart at the moment with resistance around that area, so may see a very weak bull Monday if we get one.
Gold started rising on Friday having moved down to 1261, so there is more likelihood of a pull back in over inflated equites for the next couple of sessions, but maybe only as far as 7450, possibly 7400 or 7350 which is daily support.
FTSE 100 Outlook and Prediction
With the daily RSI at 71, a rising gold price, and a weak 2 hour chart, I expect that we will see / nay need, a bit of a pull back before further upside. There is pretty strong resistance at the 7535 level and a short here is worth a go. We have had a good run of bullish Mondays so far in the second half of this year, but as various shifts happen in monetary policy, as well as, on the face of it, overvalued stocks, we might well see a bit of a dip back from this area. Probably not a massive sell off though, but more of a reliever of some overbought conditions.
There is decent daily support from the 25ema at 7394 currently, though a dip down to 7350 is possible. We also have cable starting to rise off support, which may weaken the FTSE 100 a bit.
I was expecting a bit more bearish action over the last 2 sessions with rise and dip days, however, the bears seemed very unwilling to really go in at the resistance levels – a dip of 10/20 points was about all they had in them. They probably need a catalyst again, however it’s worth remembering that the FTSE is lagging the US in terms of making record highs so may well catch up and also rise strongly during Q4.
So, looking for a bit of a morning rise to test the 7535 area before a drop back to 7500 and possibly lower – there is S3 at 7487 and the 200ema on the 30min at 7477. If there was a catalysts (missile launch cable of reaching the US?) then I am looking for 7455, possibly a low around 7355. However, I expect then the buy the dippers to reappear.
If the FTSE was able to better the 7535 area then a rise to 7555 fib resistance and 7585 looks possible, the latter being the top of the Bianca channels.
This week I am thinking a dip down to that 7400 level, 7350 possibly, before further upside and a break of the 7530 resistance level.
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