Bears appear | 2.3% inflation | Terror threat | Trump rally ends

22nd March 2017

Good morning. Well bear Tuesday certainly kicked in with a vengeance yesterday, though it was a shame that the bulls only managed 7440 before the decline started. Markets were spooked by inflation coming in at 2.3% (real rate probably 23%!) and also mainly the new terror threat which has seen an intelligence led ban on devices on airlines from Middle East destinations by both the UK and USA. Could of course just be something to lend weight to Trumps travel ban as well…

All that triggered a sharp rise in cable back towards 12500, which in turn led to further FTSE 100 weakness. Gold also climbed off the back of a bit of fear amid these worries and that the Trump rally might be faltering. Increasing interest rates last week also starting to throw a spanner in the bull’s plan. We have certainly pulled away from the 72 RSI level we had yesterday with that drop, its now at 45! I still think we will see 6500 on the FTSE 100 this year, and $1500 on gold.

FTSE 100 Outlook and Prediction

Raff FTSE 100 Trend Channels
Raff FTSE 100 Trend Channels

The sell off has continued overnight and might well continue a little bit lower still. We have the bottom of the 20 day Raff channel at 7312, and that is just below a fib level at 7318 so I am thinking that we might see a bit of a bounce here. We also have gapped down overnight so might see a bit of a retrace back towards yesterdays closing level. If 7312 breaks then I am watching for the X area as the next area to go long from.

Whilst I am thinking that we will see a dip down this year, this might not be the start – I think it will come later in the year, around August time.

Once again the FTSE 100 seems to have regained its correlation to the GBPUSD rate, and if that breaks above 12500 today then we could see further FTSE 100 weakness.

If the bulls do appear (though it may be a little bit soon as they have had a good run) resistance levels of note X, X and then X.

So, looking at a tentative long at X area initially, and maybe X if it goes lower. Shorts at X are worth a go too.

13 Comments

    1. No sympathy. SB is for losers you simply cannot win at that game. If you understand the maths of shorting you will realise short positions can really only be held for 1 or 2 days ie another losers playground. Can only win long side and no leverage. Learn this before its too late.

    2. I was long by the way Dax. I don’t need sympathy, I understand it all. Just sharing. It’s not the end of the World.

      1. Im an insider Jack. You are what we call a mug. Guy gets a few small wins gets hooked. Spends the rest of his time trying to claw back his spiralling losses. Convinces himself theres a magic recipe. There is, and it is cast by the SB company for their gain.You definitely do not understand what you are doing.
        Where are all the SB winners? They work for the company.
        Google SB / court action for tales of predictable misery.

  1. Food prices have jumped lately. Energy companies sticking on 10 – 15%. That 2.3 inflation figure is nothing, they will keep the official figure artificially low so as no threat to UK interest rates going up, would be a hammer blow to the UK and politically unacceptable. So not expecting FTSE to fall off a cliff. Just need to find a base which may not be too far away.Perhaps 7250.

    1. Yes agree with this. The rising daily channel line is still intact around here too.

      2.3% is such meaningless claptrap. Oh, look, Carney has to write a letter. What crap!

  2. Heres my view on how you win, only submitting to get views of others.
    1. Long only – shorting costs are punitive even if you get direction and timing right so over time not worth shorting.

    2. No stops, or ruthless execution of stops. Personally I only operate a stop if I am all in. I believe stop losses over time are just that…losses. So they have to be tight if used.

    3. Money management – phased entry allows you to add to winners or average down entry cost if market moves against you. Dont be too quick to add either way…must be a new buy signal from above or below your original entry. This is my most successful account operated over last 7 years. Entries are well-known candle patterns on daily chart. Lower time frames are much less reliable.

    4.Run winners – no emotional intraday decisions to snatch a quick win. Prorect winning positions with stops. (not stop – losses)! But dont put stop too close give it a chance to run.

    5. Ignore fundamentals. Go with the chart signals.

    1. Thanks CandleMaster. All valid points, and why the SB companies encourage you to use stops – gives them a target to aim for.

  3. Early days yet but a close around 7350 and a rise above that tomorrow would force alot of short-covering and get me adding to longs.

    1. Still looks weak. Closed my 7314 long at 7324. Did better off the SP and Dax longs today.

      1. Yup if it closes near lows of days range would expect a reach down to 7250 tomorrow.

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