Bears appeared 7420 support | 7511 resistance | Trump impeachment

18th May 2017

It’s funny how markets often ignore political uncertainty until the last minute but the penny certainly dropped yesterday as that dubious rally built on sand finally hit the buffers. The FTSE 100 just slightly surpassed the 7515 resistance level to double top with the 7533 level before the bears grabbed it by the horns and brought it down to an overnight low of 7420. The Dax short at 12830 worked really well, though the 12700 support was broken on the second test of that area to get an overnight low of 12535!

As I am sure you are aware the bearishness was caused by the “Trump Turmoil” with threats of impeachment and all sorts going on. However, it was also to do with the fact that the FTSE100 was rising on not much, the news flow was pretty negative, and it has generally been overbought – the S&P failed to hold above 2400, Dow failed to hold 21000, FTSE 100 had an RSI of 77 and was nearing the top of the 10 day Raff channel at 7550, so a bit of bearishness and a decent sell off day was overdue. For today we are looking at FTSE 100 resistance at 7474 again, and 7508 above that.

FTSE 100 Outlook and Prediction

Daily FTSE 100 Trend Channels
Daily FTSE 100 Trend Channels

The markets finally got a dose of reality yesterday having ignored the fairly negative surroundings for a while, with the FTSE 100 rising steadily from the 7100 seen towards the end of April. The VIX rose steadily (it was making mainstream media headlines just last week so you know its about to move) yesterday from its historic recent lows. There was also news that wages in the UK are rising slower than the cost of living – something that we have spoken about a lot before in the live room and in the comments section, and finally the news seems to be painting an honest picture. Of course, the real cost of living increase it probably nearer 10% at the moment with most costs increasing sharply at the moment – insurance, gas/electricity etc.

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52 Comments

        1. It’s quite Blatent really….just got to control the only thing we can Nick and that’s our execution…..I think we will see 7500 again though….

  3. Typical, I had a spell of going short days and then on the day I should have, didn’t! Oh well! Just hope I don’t miss the train to 6349 when the time comes.

      1. Yeah I’m long,made changes but still long……having trouble typing,gromits just taken a big chunk out of my button pressing finger……:0) ungrateful Mutt :0)

        2. By the way – I’m still very large long gold and it’s rising. I wasn’t expecting that today, thought there would be a slowish pull back. Something could be on the horizon…

          1. You mentioned an R8 the other day Si…..those new TTrs are almost as quick but the bloody ride shakes your teeth out :0)

      2. Damn, glad I’m out of it. I’m starting to hate the FTSE – always goes in the opposite direction to what I think. Even does it if I changed my mind on purpose and do the opposite of what I think. 🙂

        1. I think the Ftse will climb back up to 7500 ….its the timespan I’m pondering……I think you have to make a prediction where it’s heading….put wide stops on….and wait……its like riding a bucking bronco trying to trade the noise….IMO good luck all :0)

          1. After all…..all we are trading is supply and demand at that point in time…..people get too twitched up and that’s why they get in a mess…

          7. Like you said earlier Si, it always does the opposite of what you think :0) you said so yourself :0)

  6. Hello all,

    Closed all but one FTSE longs and now running shorts.

    DOW rinsed me last night.

    I think it may tumble hard to tomorrow?

  8. Tell you what…..if someone designed a head up trading display for your car I’d get one…..it’s like being in Prison watching this….

  10. Unlucky with the 7411 bounce Nick. Didn’t think they’d take it that low.

    I actually have developed serious trust issues with the FTSE. Nick, I recall your start of the year forecast and it’s looking good, albeit we did get to 7500 a bit earlier than planned but I think a mid-year dip to 6700 is very much alive, maybe even 6349 for Si!

    I’m cautious with entering any long term swings with the election coming up, having a sizeable position with stupid margins is a recipe for disaster (Brexit flashback ahhh).

    I think we’re defiantly soaring in the FTSE clouds but just trying rack my head when to jump on the bear train.

  11. Also quick question, I’ve been trading with CMC since forever and have been really liking the look of IG’s new platform – anyone have any thoughts on it ?

    Plus I saw Nick’s post about Corespreads, anyone tried it out ?

  13. Hi Alex. Corr spreads is good. Basic platform but does the job and has tight spreads. New Ig one is alright.

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