26th April 2017
Good morning. The rally continued yesterday with the FTSE hovering around the 7280 resistance level. There was a chance that it might have pushed up towards 7330 but remained fairly flat as investors caught their breath after Monday’s extremely bullish day. That said, 7330 is still resistance! Geo-Political concerns have taken a bit of a back seat in the media, though US v NK tension is still simmering away. Chinese and U.S. stock markets are diverging in a way not seen since August 2008, with the former hitting a three-month low earlier this week.
The Nasdaq topped 6,000 for the first time on record while the Dow rose more than 200 points amid strong quarterly results from blue-chip firms Caterpillar Inc. and McDonald’s Corp. West Texas Intermediate futures snapped a six-session losing streak but couldn’t break above $50 per barrel, while safe haven assets like gold, Treasuries, and the Japanese yen moved lower.
We have a 6.1 dividend today on the FTSE and also President Donald Trump has said that he will be announcing tax cuts and reforms today, the main component being corporation tax rate reduced from 35% to 15%.
FTSE 100 Outlook and Prediction
I am thinking we might have another fairly flat day until the market sees what Trump is going to announce later with regards to the tax cuts. Markets have risen quite far quite fast and we are testing/nearing the top of various daily channels again, as well as making new record highs – something that usually doesn’t last indefinitely.
The FTSE 100 has resistance at 7290 initially, then the 7320/7330 level so I am thinking a short around this latter level is worth a go. Could even turn into a swing short level to target the gap at 7127.
Support wise, we have the 2 hour chart offering up 7247 and 7117. We also have the daily pivot today as 7273, so pretty close to where we are now, and a level that has held overnight.