16th June 2017
Well that was rather bearish yesterday, with a fairly strong decline down to the bottom of the 20 day Raff at 7380 whereupon we had a decent bounce. I bet a few bears that got stopped out on the rise to 7555 were rueing that move! The move down was driven mostly by the fact that 3 members of the BoE had voted to raise rates sooner rather than later.
Gold and Oil also declined, while sterling spiked and moved back above 12750. Ian McCafferty and Michael Saunders joined MIT professor Kristin Forbes in voting to raise rates to 0.5pc. The MPC said inflateon had picked up more quickly than expected in since its last economic forecast in May and a further fall in the value of the pound since its last evaluation of the economy would also add to upward pressures on inflation. Prices, as measured by the consumer prices index (CPI), rose by 2.9pc in the year to May.
Meanwhile, Eurozone finance ministers reached an agreement to release €8.5bn (£7.4bn) in bail-out funds for Greece, allowing it to avoid a summer default. Tin can, meet road.
Overnight the FTSE 100 has remained around the 7430 level, and we may well see a rise and dip sort of day.
There is option expiry at 10:10 this morning so expect some spikes then.
FTSE 100 Prediction
I am thinking we might get a rise and then dip day ahead of the weekend, and don’t forget opex at 10:10 so expect a spike around then, till approx 10:20. The bulls have managed to build on the rise from 7380 where we had the 20 day Raff channel bottom yesterday and we may well get a bit of a push higher today before a drop back.
Yesterdays news on the BoE rate vote is todays fish and chip wrapper so it will be eyes onto something else. Greece has had a sticking plaster to keep the wolf from the door for a while longer. We are also at the bottom of the 20d Bianca at 7424 though the 10 day is a bit lower 7395.
Generally it all looked pretty weak yesterday but got a bit oversold on the hourly, and the daily RSI is now at 41. To be honest it was due a pull back, and was struggling to break 7600 but now we have had a flush down it might be challenging the highs again soon. June is usually a poor month for stock markets anyway.
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