6th September 2017
Another day and more worries over North Korea and a possible ICBM launch saw stocks tumble and the FTSE dip back below the 7400 level. There was a brief pause at the 7375 support area but the bears soon broke through to get a daily low at 7335. The 2 hour chart remains bearish and the coral is now showing a downtrend with resistance at 7423. There is however decent support just below the 7300 level. Services PMI data also showed a slowdown, to 53.2 in August. The services survey also showed that a measure of new business weakened, with respondents citing “fragile” confidence.Does probably mean that interest rates are unlikely to rise anytime soon. There were some rumours of even further cuts instead!
FTSE 100 Outlook and Prediction
It’s very much risk off at the moment, however there is decent support at the 7300 level as we have climbed from there a few times. Should 7296 break though then there is likely to be further downside towards 7150. The bottom of the 10 day Raff is at 7299 for today, and we also have a fib level just above this at 7317. I am thinking that buying an initial dip is a decent plan, risky though it sounds! I am going to fade in some longs at these levels.
The 30min chart is bearish to start with and we may well see a dip down through the 10 day Bainca support at 7348 initially. There is resistance from the 25ema at 7355 and we have a red coral at 7366 also as resistance. The bulls will be keen to break the daily pivot at 7373 today – it’s just a question of whether they can shake off the North Korea fears.
We also have another Hurricane (Irma) heading towards Florida this time and one of the biggest for a long time, so likely to cause significant damage when/if it hits landfall there. Off the back of Hurricane Harvey the US has many plates spinning at the moment that need to be managed. Irma has also seen orange juice and cotton prices rise.
So, fairly simple plan for today really watching if any early weakness down at 7317 and 7296 gets bought into.
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