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Bulls weakening with 7720 7680 support | 7762 7805 7820 resistance

#1 · 17th May 2023, 8:39 am

Quote from Nick on 17th May 2023, 8:39 am
FTSE100 Analysis | Signals | Forecast | Prediction | FTSE 100 Outlook | Trading help
FTSE100 live outlook prediction analysis for 17th May 2023
The FTSE 100 closed 0.34pc to 7,751.08, while the FTSE 250 midcap index ended 0.07pc higher at 19,272.72
Asian shares were subdued on Wednesday and the dollar hovered around a five-week peak as investors remained risk averse, with the U.S. debt ceiling talks and a mixed set of economic data weighing on sentiment.
Recent economic data indicates slowing in the U.S. economy following a string of rate hikes by the Federal Reserve to fight high inflation. Markets are pricing the Fed to cut rates towards the end of the year, according to CME FedWatch tool, but some Fed officials have stuck to a hawkish rhetoric.
Shorting the rallies was the right call yesterday, however they were determined to test that 7800 level before the sell off started. We may well see further declines today and a drop down towards the 7700 level, at least initially. We also have that key daily support just below this at 7680, and the bulls will be keen to defend this again, especially as they failed to test the 7820 level yesterday.
Worries about the debt ceiling in the US, along with the general sentiment of things slowing down is weighing on markets, as the "sell in May" is also playing out a bit too.
7708 is also S1, just above the key fib at 7701, so a couple of supports here though I really wouldn't be surprised if they take it down to test the 7680 level. Lots of chop this month too, which has played havoc with stops and orders.... maybe low volume not helping either, along wit OPEX.
Below 7680 then 7630 is S3, and it stays with the down trending 20d Raff channel. Talking of Raff channels the bottom of the 10d aligns nicely with that 7680 level to add some weight to that. Also bear in mind that the daily EMAs are bearish, and the 7785 resistance level from that was the swing short level so we could be on for some downside over the next couple of weeks.
Upside remains at 7820 still as the key level but the failure to test that today shows the bulls are getting weak. They were not able to hold above the 7800 level. Above 7820 then 7836 is R2 though these levels feel a bit ask for today.
Therefore I am expecting a dip and rise to play out, and a test of 7708, and possibly 7680 if the bears grab their chance.
The S&P500 looks like it will try and defend any drop down towards the 4100 level and possibly an overshoot to S2 at 4088. I would like to see that level hold if it does get that low. Option expiry on Friday is creating quite a bit of chop as well this week.
We have a 12 point dividend on the FTSE100 today as well. This will be applied after the bell today.
Good luck today.
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FTSE100 Analysis | Signals | Forecast | Prediction | FTSE 100 Outlook | Trading help

FTSE100 live outlook prediction analysis for 17th May 2023

The FTSE 100 closed 0.34pc to 7,751.08, while the FTSE 250 midcap index ended 0.07pc higher at 19,272.72

Asian shares were subdued on Wednesday and the dollar hovered around a five-week peak as investors remained risk averse, with the U.S. debt ceiling talks and a mixed set of economic data weighing on sentiment.

Recent economic data indicates slowing in the U.S. economy following a string of rate hikes by the Federal Reserve to fight high inflation. Markets are pricing the Fed to cut rates towards the end of the year, according to CME FedWatch tool, but some Fed officials have stuck to a hawkish rhetoric.

Shorting the rallies was the right call yesterday, however they were determined to test that 7800 level before the sell off started. We may well see further declines today and a drop down towards the 7700 level, at least initially. We also have that key daily support just below this at 7680, and the bulls will be keen to defend this again, especially as they failed to test the 7820 level yesterday.

Worries about the debt ceiling in the US, along with the general sentiment of things slowing down is weighing on markets, as the "sell in May" is also playing out a bit too.

7708 is also S1, just above the key fib at 7701, so a couple of supports here though I really wouldn't be surprised if they take it down to test the 7680 level. Lots of chop this month too, which has played havoc with stops and orders.... maybe low volume not helping either, along wit OPEX.

Below 7680 then 7630 is S3, and it stays with the down trending 20d Raff channel. Talking of Raff channels the bottom of the 10d aligns nicely with that 7680 level to add some weight to that. Also bear in mind that the daily EMAs are bearish, and the 7785 resistance level from that was the swing short level so we could be on for some downside over the next couple of weeks.

Upside remains at 7820 still as the key level but the failure to test that today shows the bulls are getting weak. They were not able to hold above the 7800 level. Above 7820 then 7836 is R2 though these levels feel a bit ask for today.

Therefore I am expecting a dip and rise to play out, and a test of 7708, and possibly 7680 if the bears grab their chance.

The S&P500 looks like it will try and defend any drop down towards the 4100 level and possibly an overshoot to S2 at 4088. I would like to see that level hold if it does get that low. Option expiry on Friday is creating quite a bit of chop as well this week.

We have a 12 point dividend on the FTSE100 today as well. This will be applied after the bell today.

Good luck today.

Recommended Broker

IC Markets - offers market leading pricing and trading conditions by providing clients with True ECN Connectivity; this allows you to trade on institutional grade liquidity from the world’s leading investment banks, hedge funds and dark pool liquidity execution venues. Highly recommended!

Membership and Live Trading

If you would like more detailed analysis for FTSE100, DAX, Gold and S&P, including the trades that I am looking to take myself, then please join my active members community.

What you get

Daily Analysis pre market open (sent around 7am each day) for FTSE100, DAX40, Gold and S&P500.
Daily email pre market includes my trading plan for the day including ORDER levels, with stops and targets/limits
Telegram live trading room and webinar group membership for discussion and realtime trade updates