Bear Tuesday and still short from 7420

18th July 2017

The FTSE 100 short from 7420 yesterday is still running with the stop at breakeven at the moment. After the bell the bulls fought back a bit managing a high of 7415. Was a bit of a shame that the S&P missed the 2456 long order by half a point as it rose quite nicely as planned, to reach a session high at 2462. I think we can safely say that was a bull Monday yet again though! Gold continues its rise, nearing the 1240 level now, and looking like the recent low at 1205 is the short term low.

Politics are coming to the fore again both in the US and UK, with UK inflation data out later for June, with 2.9% predicted.

The dollar and U.S. equity futures retreated on signs that the U.S. health-care reform bill is effectively dead in its current form, casting a cloud on President Donald Trump’s broader economic revitalization agenda.


FTSE 100 Outlook and Prediction

FTSE 100 Prediction Daily Channels
FTSE 100 Prediction Daily Channels

Well we had the bull Monday yet again so will we get the bear Tuesday? The Asian markets declined, along with the ASX200, halting a 6 day surge that pushed the regions shares to the highest since 2008. I am still running a portion of the 7420 short from yesterday with the stop currently set to 7415 locking in 5 points. Have taken some profit on the dip down to 7400 as you know.

For today I am thinking that we may well also see a decline, and inflation data at 0930 may well help that. The 2 hour chart is bearish still, with resistance from the coral at the 7413 level. There is the daily pivot at 7405 for initial resistance with 7429 higher up where we have the top of the 20 day Bianca channel. I mentioned yesterday that we may well range between 7350 and 7450 for the early part of this week, so if we do get a drop it will be interesting to see if the bulls can defend again. They managed to bring it up on Friday from the 7365 area to back above 7400 but global concerns may well weigh on it today.

Support wise, we have a key fib level at XXXX, then XXXX so this cluster of supports around this area might well temper any fall. Gold has been steadily rising over the past few sessions as well, and with cable above 130 and holding for the moment, that could also weigh on the FTSE100.

So looking bearish for today.

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41 Comments

  5. For those who care the dollar keeps making lower highs and lower lows on daily chart. Looks horrendous but good for everything else.

        1. Oh, wow, I wish I did it on Dax. Didn’t figure out, thought it was a reversal impulse.

    3. Such a weird rise on FTSE that people wouldn’t know what to make of it. Close it, run it, what? Will it collapse?

  7. US stocks have made critical breakout presumably on dollar weakness. Expext ftse to be dragged higher this afternoon despite the gbp strength and oil price weakness.

  8. Here are my thoughts on inflation longer term. It wont exist. Its a no-brainer. The loss of jobs to AI and robots will wreak havoc with the consumer base. Longer term investors might want to bear this in mind. How best to prepare for a world without inflation or more likely long-term deflation? Productivity will go through the roof slashing unit cost which then has to chase limited consumer cash.

    1. Would counter that by saying the economy is a continually evolving organism and over the last 200 years new technology has been developed which has led to job losses in particular industries but overall new industries have then appeared. Don’t ask me what new jobs there will be in the future, but people are innovative so there’s a tendency that when unemployment rises more entrepreneurs appear. Secondly increased productivity is good for growth. The only way it wouldn’t be is if it led to job losses and business owners hoarding all of the capital. That would be deflationary. But governments won’t allow it to happen, they would tax automation in some way and redistribute to the population. All that being said i think we’re in a deflationary environment because of the huge amounts of debt out there, but don’t think AI will be a contributor to it

      1. You are right on most counts. But governments are and will continue to allow the rich to get richer. BECAUSE WE ARE GOVERNED BY THE WEALTHY, Trump is an example of the way forward. Mark carney formerly of Goldman Sachs probably worth 100M easily. Macron the banker. Osborne, Cameron, Blair etc….all into 8 digit wealth. And there wont be a middle class left to tax. The new jobs will be few and far between creating and maintaining the technology which sadly is fast becoming self-repairing. When robots break in the nissan plant in sunderland often more robots come in to do the repairs. So its hard to see alternatives for the masses hence the perceived need to sedate them with universal income, drugs and games. Income will be conditional on failure to reproduce…see benefit caps in the UK as precursor. Eventually the wealthy will declare themselves a seperste species with access to advanced medical and war technologies and will not live in fear of the masses who will tear each other apart fighting for the scraps.

  10. Morning all.. still short as long as we remain under 7440-50 area with the move to 7100-7200 still possible. However, feels like we’re going to stay in a trading range for a while longer so looking for buy set ups to cover my shorts. Some very aggressive short covering this morning on the inflation data but would expect it to slip back under 7400 today now the initial spike has died down. Sterling will probably hold the breakout area just above $1.30 for now

  11. Come on guys get real. US stocks exploding to hew highs with NO TECHNICAL RESISTANCE based on PERMANENTLY LOW INTEREST RATES and COLLAPSING DOLLAR means you only have to choose which STOCK MARKETS to BUY.

    1. Will join you in being bullish if FTSE can take out 7440-50 and then 7480-90. But as things stand it’s a choppy mess which looks like a corrective rally to me. And the US markets I wouldn’t call an explosion upwards as we’ve made marginal new highs with no follow through (so far). It’s basically a game of musical chairs at the moment based on which currencies are going down on a particular day

    2. A situation where a stock or index has no tech resistance is followed by a pretty decent fall, I am sure you will agree

  14. All those short gold please stand up please…now remove your briches….oh, theyre already down….

  15. Dam, survived 70 point drop, just now got out b/e, falling and falling, getting on my nerves, who would have thought.

    1. Most important is to add after break outs, not before. But this is not a good strategy, it is a survival strategy, not a winning one. Better is stop loss of course. I had one triggered today actually.

    2. It reminds me of an anecdote: I am a simple man, I saw the trend and entered against it.

    3. That morning’s rise completely messed up my brain, I thought it was an impulse. So When it got down to 12480 R2 I thought it would bounce of that line and by now it must have killed a lot of stops, but it went down and down. Arghh so annoyed with my decision.

    4. Went out, came back and on a calm mood just closed 32 points half stake, cos didn’t want to risk too much. 12396-12428. Withdrew instantly, for all my sufferings today.

  16. Short gold average 1238. Candle master up yours. Which indices did you decide to go long on by the way.

    1. Ftse. Largely because no currency considerations. Long FTSE and gold opposite of you. Hope you now know what a bear flag looks like see dollar today LOL. Rolling in it.

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