16th August 2017
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Markets settled down a bit yesterday as tensions have eased over North Korea for the moment. However there was a slightly dubious looking spike on the FTSE 100 to 7419 which wasn’t seen in the cash market that was very short lived and took out a load of stops, including ours just above the 7404 resistance level. Was a bit of an odd one, especially as it then fell back down to 7370, so probably a stop hunt.
There wasn’t much bear Tuesday though as after the opening move down to 7355, the market ground higher to hover around the 7390 level. We have a 9.35 point dividend later today which may well keep things supported for the moment, as the relief rally from 7300 continues. Its also option expiry on Friday. This is the last of the larger dividends for a while. The divi hunters never came out last week for the 40, will they appear today for 10? If so then watch for the buying to start around 3pm.
FTSE 100 Outlook and Prediction
That spike yesterday certainly made things confusing, as it spiked up to the 25ema resistance on the daily at 7419 before dropping back. Technically speaking that level is still resistance (the moving average is slightly lower today at 7417 though) and we also have R1 at 7421. If the bulls can hold above 7400 then this area is the next hurdle, with 7485 above that. They might struggle at that level as thats a pretty decent bounce from the 7300 level and BoA were sending out a bit of a bearish message yesterday which kept the US markets subdued.
I have put 4 FTSE trade orders on the trade plan below, but 2 of them are at extreme support and resistance areas so probably wont trigger. Thought it was worth putting them in though just in case we do get extra volatility today.
Support wise, I am watching 7359 initially, with 7342 below that being a key fib level. We also have a bullish 2 hour chart now with support at 7324. It might not get that low today what with the dividend in play for the moment. Cable falling back down to sub 129 kept the FTSE up yesterday and may well support it again today so its worth watching that for the moment. As it’s August (traditionally a weak month as we have already seen) and with low volume moves do get amplified so cable is likely to have an even larger effect than usual.
So, watching the 7420 area initially for a reaction there.
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