FTSE 100 7292 shorting area | Bears starting to appear

28th April 2017

Good morning. Fairly flat day again on the FTSE 100 yesterday, despite ECB President Mario Draghi showing growing enthusiasm about the state of the euro-area economy. The FTSE failed to test the 7280 recent resistance level again, and didn’t even attempt the 7300, though resistance still remains here for a swing short opportunity. The Gold long yesterday didn’t really do much, as that was also flat. Amazon and Alphabet results helped the bulls a bit after the bell but gains were short-lived – the S&P500 rose to 2392 then fell back to 2388. I wouldn’t be surprised if we get weakness in indices again and close the gap from the start of the week – 7135ish on the FTSE – soon.

EBC leaves things unchanged

The European Central Bank left its ultra-easy policy stance firmly in place on Thursday as inflation continues to undershoot its target into the fifth straight year, even as economic growth is on its best run since the global financial crisis, Reuters reports. The ECB even maintained its bias for further policy easing, leaving the door open to further rates cuts or an increase in asset buys. This is in line with market expectations but at odds with calls from Germany, the euro zone’s economic powerhouse, for a gradual reduction of stimulus.

FTSE 100 Outlook and Prediction

FTSE 100 Prediction
FTSE 100 Prediction

For today I am thinking shorting the rallies is a good play. The bulls have failed to break the 7300 level and we have resistance at 7292 (fib level and R2) and 7298 for today. Below that 7270 is also resistance. If the bulls were to break through the 7300 level then I think we might see some stronger resistance at 7330 and this is a decent swing short area.

Support wise, the 7226 level with S1 looks good initially, though below this then 7200 is highly likely to be tested if it breaks as we have a key fib level here and just below S2 at 7204 (small bounce here then maybe). S3 at 7183 then Mondays gap at 7135 are the next areas of note.

So, really watching for decent short set ups today, though could of course get yet another weird Friday! Its also the end of the month so we may well see some profits being banked as we head towards the start of “sell in May” next week.

13 Comments

  1. Pound continues to climb and dont want to own stocks right now esp FTSE. Added to gold longs this morning despite the short term down trend. Strong support at 1258. Friday afternoons can see strong moves in gold.

  2. I will be looking to close shorts when we get to 7175 or at 14:00 whichever is earlier. 🙂 Can’t afford to pay higher margin on IG and take the risk of holding over a long weekend.

  4. Sharp slowdown in UK economic activity. Thought it was booming! The usual drivel shovelled out to the cattle. Reinforces the view that interest rates are going nowhere folks, they always find an excuse to keep them down. For some reason UK housing must be supported at all costs. Clearly the establishment is of this view. Good for gold, and probably good for stocks further out.

    1. I completely agree with you there CM….regarding cattle fodder and rates yeah I can’t see rates ever getting back to anything worth having…..keep working slaves and don’t complain…..there’s a new assault on your disposable income coming very soon …… I find it uncomprehensible that people keep swallowing it ….

  5. I know GBP USD chart has been showing strength and I referred to Bull flag and pending breakout a few days ago which has been delivered, but in view of UK economic news I reckon this must be a false break just now and GBP should pull back. No justification for this strength unless the USD is simply very weak.

  6. LOL shock horror UK house prices fall (telegraph). Economy sinking! Slash rates immediately and increase printing forthwith!

  7. Hey all
    Correlations have been all over the place this week (fx, commods, inter-index)… has made it a bit tough for me, but managed to recover from this weeks down day and have a small profit for the week… will probably look to risk a chunk on the US gdp moves later, though I must try to get on the right side for a change – big news / figures seem to have caught me out by doing the unexpected recently – its usually dollar related!

    Hope the week has been profitable for everyone!

  9. US growth slowed to its lowest level in three years in the first quarter of 2017, held down by falling business inventories and reduced public spending, the Commerce Department reported Friday.

    Preliminary data showed GDP increased only 0.7 percent in the first three months of the year, down sharply from the 2.1 percent expansion seen in the fourth quarter of 2016.

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