6th April 2017
Good morning. The markets didn’t like the Fed news about shrinking the US central banks balance sheet and we saw a decline after the minutes were released. Interestingly the SP had risen during the day all the way to the top of the 10 day Bianca channel at 2378 before declining sharply.
The FTSE was frustrating yesterday for the orders I had set – it just missed the buy level at 7320 by bouncing at 7322 to climb to 7362, then missed the sell at 7375 and declined. Fortunately the gold trade worked well with a nice short at 1257 down to 1245. Pretty much closed at the low as on the equity weakness that bounced all the way back to 1258. So a funny old day in the end! Of course, we also have NFP on Friday just for an extra curve ball!
FTSE 100 Outlook and Prediction
For today I am thinking that we will get an initial rise to the resistance area that I have around the 7310 level. The initial rise could well come from new money flowing into the FTSE100 (shares and trackers) for the new tax year. Isn’t it handy that the institutions will also be able to buy at a much lower price this morning compared to where we were yesterday afternoon …..
I have some fairly weighty looking resistance at 7310 this morning on both the 30min and 2 hour charts so feel that this is worth a short if we do get an initial rise. The daily chart has also flagged up a short for the first time in a while, with resistance at 7328 and this area could well see a turn down lower. I also have resistance at 7353 but I don’t think it will rise there today.
For support, we are right on the 7260 level as I write this, a level that has held significantly on a few tests. There is the also the bottom of the Bianca channels here – 7254 and 7269 – so another reason why we might get an initial rise. If this level breaks then its likely to fall to 7200 fairly quickly. Worth shorting a break of 7254 (a 30min candle close below this level would constitute a break).
Remains range-bound. Staying out today as no buy signal yet on daily chart. The end of QE in the US and a rising interest rate cycle looks like an easy short for Main St. Therefore I anticipate a sharp rise tomorrow. The computers are no doubt waiting to sucm in as many short positions as possible before the squeeze.
Plan A Will be looking to short 7340 if signs of reversal and it gets there. Alternative – go long around 340 on successful break.
Another trip down will probably break 260