Dip Rise Dip | FTSE 100 Support 7212 | Resistance 7261 | Earnings season

2nd May 2017

Good morning, I hope you had a good long weekend. The 7198 level we had for support on Friday has held well and the long from it managed a few points last week too. Since Sunday night, markets have looked fairly positive again, with geo-political concerns taking more of a back seat. Markets are probably hoping that there may be more of a diplomatic solution to the North Korea issues, with sanctions etc.

Despite recent drops in volatility gauges, markets are still subject to jolts. Stocks were whipsawed during the U.S. session after Trump suggested reintroducing rules that keep commercial and investment banking operations separate, triggering a brief slide in bank shares.

China data continues to add to concerns about the strength of the global economy, with a gauge of April manufacturing falling below estimates. That comes after a weaker-than-expected GDP report from the U.S., and ahead of Friday’s key monthly American jobs report. Australia kept interest rates unchanged as inflation speeds up and signs of looming fiscal stimulus increase.

After a bit of a Bull Monday yesterday with the US trading as per usual, will we once again get more of a bear Tuesday?

FTSE 100 Outlook and Prediction

For today I am thinking that we might get a bit of a dip-rise-dip sort of day. There are quite a few earnings out today as well, with the Apple ones going to be closely watched. They have the potential to move index prices a fair bit. Major support is at the pivot at 7212 initially, with the 7198 level below that. If we get really bearish then 7167 is a fib level that is worth watching.

With the bullishness yesterday the 2 hour chart has gone bullish now with initial support at 7223, pretty much where we are as I am writing this. As such, I am thinking that a dip below this will be quite likely first thing, but we may well rise back if the buy the dippers come in.

Resistance wise, the 2 hour coral line is at 7245 then we have a fib level at 7261. If the bulls were able to push above this then they will be gunning for 7300 – and a rise above that starts to reopen the possibility of a fairly decent push higher. On the other hand a failure to continue the rise at one of these resistance levels and a then break below 7200 is likely to make things get quite bearish, with 7100 and possibly 7000 suitable targets.

So, fairly simple plan today really watching 7212 then 7167 for support, and 7245 and 7261 as resistance.