19th April 2017
Good morning. Well wasn’t expecting the FTSE to shed 200 points yesterday thats for sure. Was a bit of a surprise hearing PM Theresa May call a snap general election for 8 June, especially as not that long ago it was something that she said she wasn’t going to do. Politicians eh! The FTSE100 sold off from 7am yesterday, initially blamed on miner weakness and a strengthening pound, though also some might have got wind of that 11am announcement too.
We ended up with a trending day which are a bit of a pain unless you are already on the right side of the move. Suffice to say that after that fall the longer term charts now look a lot more bearish – 2 hour has resistance at 7230 and the daily has resistance at 7305. We also have the French elections coming up, as well as tensions over the US and North Korea, and now also Iran. Todays FTSE 100 dividend is 3.1 as well so bear that in mind for the close.
FTSE 100 Outlook and Prediction
I am thinking that we might see a bit of a dead cat bounce initially this morning, which may well turn into some traction for the bulls, as long as they can hold above the 7100 level. There is the 20 day Raff at 7109 and a fib level at 7103 and if they can hold this area then we may well see a rise up towards the pivot at 7196.
The ASX200 showed a bit of a miner recovery with an initial rise, and we may do the same, as yesterdays news is digested. The main issue is that the run up to the election leads to uncertainty and the market hates uncertainty! We also have the French elections coming up and the background threat of the US/NK skirmishes escalating into something more serious.
If the bears manage to break the 7100 level then a trip down to 7062 looks pretty likely, with S1 and 7045 below that. Then we are looking at 6962 for S2 and possibly even 6930! I expect that we will get a bit of a bounce around the 7100 level though as all the while we have been around 7300 to 7400 area there has always been the chance of a trip to 7100 if 7250 broke. I just didn’t expect it to go from 7330 to 7120 in one move though.
For the bulls, if they can break the pivot at 7196 then the 2 hour chart has resistance at 7232 and then the daily at 7305.
I am thinking though that if 7100 can be held we may be on for a run back up.