23rd March 2017
Good morning. After Tuesdays sell off, yesterday saw a bit of stabilisation at around the 7305 level, keeping the daily rising trend channel intact. The long at 7314 netted a few points but it was mostly fairly lacklustre for the bulk of the day as investors adopted a wait and see attitude. The Dax and S&P500 had slightly better bounces from their early lows.
The gains in U.S. equities provided a measure of calm to the market after a selloff spread across Asia on Wednesday. Volatility spiked before a Republican health-care bill is set for a vote in Congress. Lawmakers have signaled any setback could delay enactment of tax cuts and spending increases, the prospects for which have underpinned the rally in risk assets since Donald Trump’s election in November. The depth of selling drew some investors back in on speculation the drop went too far given data showing strength in the global economy.
FTSE 100 Outlook and Prediction
I have gone for a slightly optimistic plan again today with a couple of buy the dip trades. If 7300 had broken yesterday then the daily channel would have been breached and it might be looking a lot more bearish. As it is, while 7300 holds as support we could be on for another leg up. The terrorist attack in London yesterday probably caused a few jitters as well, which is why our rise was maybe not as strong as the US and Dax yesterday.
If however 7300 does break today then it looks likely we will dip down to the 7270 area, maybe 7250. S3 for today is at 7268 though so we may well see a bounce here. The bottom of both the Raff channels are still around the 7300 level as well today so there are quite a few nearby supports in play still.
The bottom of the 2 Bianca channels are at 7330 which is where we have remained overnight, so if the bulls are quick out the blocks we may well see a rise towards 7370, where we have the 200ema on the 30min.
If the bulls can break 7370 then the bullish trend is still very much in tact and keeps that possibility of a rise to 7500 in tact.