31st January 2017
FTSE 100 Support 7106 7104 7086 7080 7065 7030
FTSE 100 Resistance 7132 7142 7149 7155 7160 7173 7224 7281
Good morning. The FTSE 100 was actually quite resilient again yesterday as the Dax, Dow and S&P had fairly significant falls, while the FTSE only dropped down to the 7110 level before climbing back to 7140 at the end. Overnight has seen further weakness though, annoyingly it didn’t quite manage to rise to the 7150 level which looked like a decent short reentry spot on the 2 hour chart. With 7115 breaking down it looks like we are pretty likely to test the 7085, and possibly 7065 area now, where we have the bottom of the 2 Bianca channels.
In other news overnight, Donald Trump has fired acting Attorney General Sally Yates after she ordered Justice Department lawyers to stop defending the president’s controversial immigration orders. Markets reacted to that and also the BoJ data released last night (unchanged monetary policy) to the downside. We also have German unemployment data out this morning at 08:55 which could well set the tone for today.
FTSE 100 Outlook and Prediction
For today I am looking at 2 key levels – 7142 for a possible short and 7085 for a possible long. Its the last day of the month and the FTSE has held up pretty well since dropping from the 7355 level, despite the other markets weakness yesterday. However, gold is back around the 1200 area, so we may still see some FTSE 100 weakness towards the 7085 level. The bulls will be keen to hold this level as below this leads to the possible test of 6950, along with the negative headlines of slipping below 7000.
On the flip side, the bears will be looking to short around the 7142 area as we have resistance here on the 2 hour chart, along with a red coral/trend line at 7149. One of the members kindly posted an Elliot Wave Count for the S&P recently and from the 2290/2300 area is a possible wave 4 decline, leading to 2180, so we could wee see some fairly significant downside if the bears really start going for it. Assuming yesterday’s declines were not a bear trap at any rate!
So, for today I am looking at shorting any early morning climb towards 7140 (was looking at entering last night at 7155 before the US closed but it didn’t manage to get there) to target that 7085 level and maybe lower. But, I think 7085 will probably hold as support, certainly on the first test.