Brexit 12 point plan | FTSE 100 Support 7230 7215 | Resistance 7300

18th January 2017

FTSE 100 Support 7244 7235 7225 7215 7185 7160
FTSE 100 Resistance 7258 7285 7308 7330

Good morning. Well there we go then, we have had the Brexit speech setting out the 12 point plan, which saw the pound rise strongly against the dollar and the FTSE fall away having stalled at the 7355 resistance area mooted a few times. Below I have put the key points from the speech, but as expected its generally a clean break from the EU whilst still remaining partners and allies.

Theresa May’s Brexit speech | Key points

  • A final deal on Britain’s exit from the EU will be put to a vote of both Houses of Parliament
  • Ireland will have a common travel area between UK and Irish republic, ‘which will protect the security of UK’
  • May wants to guarantee the rights of EU nationals in Britain, and Britons living in Europe, as soon as possible.
  • Britain will leave the single market. The Government will seek ‘the greatest possible access with a fully-reciprocal free trade deal’. May indicated that Britain could pay if necessary, but would stop making the contributions it makes now.
  • May wants to see ‘a phased process of implementation of new arrangements outside the EU’ from 2019
  • Theresa May prefers ‘no deal’ than a ‘bad deal’, telling EU leaders punishing Britain would be “an act of calamitous self-harm”

The FTSE had support at 7218 after the resistance at 7355 and it dipped slightly below this but has rallied back overnight. If the bulls can hold that level then the bears might well be on the back foot …. but the bulls need to break 7300 to push higher. Yesterday dip has brought the daily RSI back down to 60, quite a sharp fall in one day from 92 where it was on Monday.

FTSE 100 Outlook and Prediction

FTSE 100 Prediction
FTSE 100 Prediction

Could be on for an interesting day today. The lower support that we had from yesterday at 7215 has held overnight and we have risen to just above the 10 day Bainca channel at 7244. We are testing the bottom of both the Raff channels here too, so I am thinking that a long around the 7230 area might well be a decent play. The 30min chart could be on for a bullish cross over with the moving averages. The markets have had time to digest the speech and will now be focussing on Trump’s inauguration tomorrow. The pound has dropped back about since its rapid rise yesterday, currently down 70 odd pips.

Divi is 2.5 today so bear that in mind if you have a position open at the close. Fairly small divi so not likely to see too much of a rush of buying towards the bell today, but might kick up a little bit around 16:15.

The 2 hour chart is still bearish after yesterday and the drop from the 7355 so we may see some bears enter at around the 7310 area, and we have the coral on it at 7330 also to act as resistance. If the bears break below 7215 today then the next support is 7185 and 7160 below that – this 7160 could be a decent swing long entry, off the daily chart so a stop of about 30 points.

To start with, the 10 min chart is positive, with support at 7335 and 7325 so we may well get an intake rise certainly to the pivot at 7260ish.

29 Comments

  2. Morning and HNY to you Nick and everyone.
    Back for a little while waiting, as ever, for bloody lawyers to get their acts together, so doing a bit of day trading.
    That rally from 7000 over the last month was highly weird technically, all the hallmarks of a low volume short squeeze.
    Can’t really see much medium term tech support till around 7100, but short term looking basically for the same as Nick, 7220 to hold and fib levels of 7265 and 7290 to resist (or not) as % of the 140 pt pullback.
    Very short term coming up against a bit of resistance possibly at 7244.

    Got $1000+ for half my Bitcoins btw, happy bunny 🙂

    1. Nice fail at 44 and nice hold of 20.
      Don’t trust this last half hour’s drift up so all square now at 30.

      1. Hello MR. TMFP .. How you been long long time since last good old times.. Have taken your advice though manage to catch 19 long seriously, but you are right I have seen many times big profit melting away in front of my eyes .. nothing more frustrating than that.

        1. Hi sharma, I’m good thanks, just back from a bit of Goan sunshine and wrestling with the Spanish legal system.
          I’m glad I haven’t traded much since Trump, looks hideous for day traders.

          Light short at 36, 11 pt stop looking for third test of 20.
          Good luck.

      1. Hi Nick, difficult to know where to replace, was going to at $800 but bottled it, may have missed the boat but still got a fair few and not chasing it.
        Sympathy for you trying to make sense of this weirdness day in day out.
        That +3.3% in January was damn good considering.

  3. Not many people around here these days either holidAYS or may be most got trumped … Anyways did you mention Goa as in India?

    1. Yes, been going there off and on for many years to de-stress.
      The money situation was interesting after demonetisation, but I love the place, especially down South, a small place called Agonda with a magnificent beach.

  4. Yesterday I tried long, today tried long, lost a few quid and sitting the same from the start of the week. tmfp, if you didn’t say about your short trade I would be probably still sitting with the long 11564 but I closed it on 62 or something, good it recovered to this point. Thinking to reload lower. GL

    1. Hi Jack, how’s it been?
      Not sure of the connectivity between the various indices these days, currency values seem to be a major consideration with the weak pound fuelling most of the FTSE strength. When I came back from holiday, the airport exchangers were 1:1 £ for euro.
      Not a good type of market for day traders at the mo, that’s for sure.
      GL.

      1. Wow, you had a better exchange there. I exchanged 260 Euro for 210 pounds yesterday in Manchester.
        Dax acts differently to FTSE this year. More bullish I’d say. It still hasn’t touched the previous top whereas other markets are above the previous tops so I hope it will keep pushing up. I struggle with my daily trends atm. But I don’t give up hope yet.

  5. Morning all,

    I’m holding shorts for a mid term fall

    FTSE at 7335
    Dow at 19870
    Dax at 11560

    Could go either way! GL

    1. Including yesterday’s close, this is the third cash try @20 coming up, so I’ll just cover my remaining short but not long until I see how it behaves.

      1. Well, 20 held again, I missed covering by a point and got stopped at 34, probably the high end of the coming range.
        Needs to break 38 then 44 for any chance at a decent rally and doesn’t appear to have the guts right now.
        No idea what the DOW’s going to do or how it will affect the FTSE.

      1. Yeah, bit of a flashcrash there, dunno what that was about, took a quick +5 on the FTSE long too. Everything’s a bit slow motion, taking some getting used to.

        1. That’s what I thought when I saw it crashing so I was tempted to take advantage of it. Don’t know why I went to the market with worse spread (2 points) DOW which I trade rare. Just a little scalper today I am.
          It’s slow for you after the hols, it was the same for me when I started this week.

  9. Hey all,
    HNY!

    Tmfp, nice to see you back however briefly.
    Morko back too – I was worried for everyone it had gone so quiet round here..

    I’m chipping away at a biiig loss in December after Italian referendum – emotional error off low sleep. Back to winning ways in Jan, but I have no clue about any direction beyond 5m candles

    Good luck this week.. fun on Friday perhaps with trumpy-babes.

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