23rd March 2017
Good morning. After Tuesdays sell off, yesterday saw a bit of stabilisation at around the 7305 level, keeping the daily rising trend channel intact. The long at 7314 netted a few points but it was mostly fairly lacklustre for the bulk of the day as investors adopted a wait and see attitude. The Dax and S&P500 had slightly better bounces from their early lows.
The gains in U.S. equities provided a measure of calm to the market after a selloff spread across Asia on Wednesday. Volatility spiked before a Republican health-care bill is set for a vote in Congress. Lawmakers have signaled any setback could delay enactment of tax cuts and spending increases, the prospects for which have underpinned the rally in risk assets since Donald Trump’s election in November. The depth of selling drew some investors back in on speculation the drop went too far given data showing strength in the global economy.
FTSE 100 Outlook and Prediction
I have gone for a slightly optimistic plan again today with a couple of buy the dip trades. If 7300 had broken yesterday then the daily channel would have been breached and it might be looking a lot more bearish. As it is, while 7300 holds as support we could be on for another leg up. The terrorist attack in London yesterday probably caused a few jitters as well, which is why our rise was maybe not as strong as the US and Dax yesterday.
If however 7300 does break today then it looks likely we will dip down to the 7270 area, maybe 7250. S3 for today is at 7268 though so we may well see a bounce here. The bottom of both the Raff channels are still around the 7300 level as well today so there are quite a few nearby supports in play still.
The bottom of the 2 Bianca channels are at 7330 which is where we have remained overnight, so if the bulls are quick out the blocks we may well see a rise towards 7370, where we have the 200ema on the 30min.
If the bulls can break 7370 then the bullish trend is still very much in tact and keeps that possibility of a rise to 7500 in tact.
Have included the levels and prediction chart for today. If this gets stolen again then I will resume with the X’s
Thank you very much, Nick. Even if you draw just the arrows it would be enough for me. Cheers.
Noted
Yes no mans land just now.
No pressure on low stakes. LOL. Scalp 11910-11925 just done. Going out for a bit.
Yesterday had a good day with 11853 long and 11919 short, but took modestly. Stops stops stops. Never again break the rule. I will claw back.
I promise you now.
Low stakes is v important if making several intraday trades. If done right, the power of compounding comes into play. The most successful SB customers trade index futures at 1-2 pounds per pip and never change the stake. Ie they operate like machines.
Last 2 days price of UK gilts has risen sharply implying the bond market does not foresee imminent interest rate rises. UK gilts are at top of their recent trading range and if they manage a breakout should be taken as read that despite inflation UK rates are going nowhere. If I see the breakout in the bond market (the smart money!) I will report hre. Of course that would be a positive for stocks…
It really feels like a BTFD moment!!!
Just closed my FTSE long from 7314 at 7344
Hi Nick
Just curious, I do see why you have exited the position but the 4 hr has good reversal candles. Why not leave it for the longer term?
Where do you see reversal candles on 4 hour chart FTSE? All I see is MACD below 0 and EMA are crossed down and sitting on 200EMA. Any push can send this all down through 7300. It may get a bit higher first though.
Daily and Weekly look a bit better. Dow looks the bearish of all. Dax is naughty.
Well I am seeing the following on IG charts:
1. Divergence on daily charts, macd and rsi vs. price which resulted in the drop.
2. The current rsi has gone to levels below the previous low, i.e. 7270 suggesting that the current down move is over.
3. There are pin bars on the daily and 4 hr charts.(not on out of market charts though, but there is an inside bar formation)
4. Finally, the 4 hr charts have a double bottom around the 7300- 7315 area
Based on the above I came to the conclusion that the probability of a move to 7400+ levels is higher than a drop to 7270(supports longer term trend). So i just wanted to know if I am looking at the charts with some bias or am I missing something?
Feedback will be gratefully received
That double bottom area (FTSE) did create a flat channel (on smaller time frame) and it can easily break down so as up. Nobody knows where it will go. Maybe to the long side if your indications are correct. Nick may clarify tomorrow. But I don’t like MACD below 0, and it had divergence on 4 hour chart before the latest drop.
But it could be just “buy the dip”. GL
Annoyed that Dax didn’t go down that much. One day it drops like a lunatic, but another it doesn’t want to spare a dime.
To be honest, I was holding shorts from 7420 and was targeting the 7270 area, but have switched to longs today