Looking bearish | 7500 resistance | Decline to 7450 today

24th May 2017

Bit of a flat day yesterday with only the 12700 Dax resistance level getting any sort of decent reaction. After the attack in Manchester the market all felt quite subdued and today we have the terror threat raised to critical from severe (not much of a surprise though). Overnight the FTSE 100 futures price has weakened, dropping back below 7500 as Asia and Australian markets dropped, after Moody’s cut its rating on China. The 2 hour FTSE 100 chart has gone bearish now with resistance at 7501. I was expecting us to reach the 7535 level yesterday but the bulls didn’t seem to have much strength and stalled at 7520 instead.

Today we have the Federal Reserve due to release minutes from its most recent meeting, offering more clues on the pace of interest-rate increases in the US. We also have ECB Draghi speaking in Madrid at 13:45 today, so likely to see some Dax volatility then. We have a small 1.7 dividend later today as well, a level that probably wont bring the divi hunters out!

FTSE 100 Outlook and Prediction

Daily FTSE 100 Trend Channels
Daily FTSE 100 Trend Channels

There are 3 key resistance levels that I am watching today – 7501, 7535 and 7553. All three are probably worth shorting off to see if we actually get some bearishness off a resistance level – something that has been lacking over the past few weeks as its been a struggle to even drop 10 off a key resistance recently.

Support wise, I am watching 7454 as the key support for today (maybe worth a long here) and S3 lower down at 7436.

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93 Comments

  1. Finally Nick! 🙂
    Although I have to admit I am looking for a lot more lower than 7450.

    1. How do you read the trend George? Just curious as it might help with better timing of my shorts.

      1. short term trend, I use 20MA on the hour chart..

        Look at the slope of the average… its now flat , to me that indicates consolidation or change in trend…

        Hope this helps

          1. stay away from shorting till price is below sloping 20MA or short when price is above or below a flat 20MA..

            Trend is your friend….

  6. Its really strange the way the markets dont seem to give a crap about what happens in China anymore.. This time last year , a hint of a slowdown in their economy was enough to rattle the global markets. Whats that about?

    Does anyone know is there any truth to the rumours of central banks buying equities to keep the market propped up?

  8. All, just so you know I am travelling tomorrow morning (Thursday, 25th May) so wont be updating the blog tomorrow.

  12. Hi, Nick you say divi is 1.7 today but IG have indicated its 14.299. Is your source more reliable than IGs? thanks

  13. Anyone wants to take on the Dow?
    Go for a short with a 100 point stop, target is 500.
    Not trading this one as I have bigger plans for both ftse and dow!

  17. I don’t think we will get anything but the grind for the rest of the week.
    It’s all unwinding in a strange way!
    I will hold as my eventual target of 6950 on ftse and 20000 on Dow is still valid.

  18. Hey Icarus,Si,and Morko,in the film The Big Short it didn’t drop straight away either,the guy that shorted it with company money got some big debts before it finally crashed and he made a fortune :0) good luck but remember the market can stay irrational longer than you can stay solvent….

    2. I took a couple of shorts on that spike at the end to show support :0) out for a days wage :0)

  19. Bitcoin just keeps rising!!! Any thoughts as to the long term implications of this.?

    1. Pullback will leave many out of pocket. 🙂
      Don’t know when it will happen as the market is still not mature

      1. I was wondering as it’s an alternative to gold as a safe haven. The fact it’s rising exponentially shows investors would rather go to bitcoin than the indices. Could change golds influence, and how we use it as a signal.

        Whilst on the subject of signals -Si you bones need calibration!!

    2. Bitcoin goes to $10,000 then $100,000, then…
      People will trade in satoshi. Get in now, still very early days! Don’t worry about pullbacks. 🙂

  20. FOMC, are the rebulican? If they say something controversial about rate hike the markets will react I think.

    I ask as if the FED aren’t pro trump it could be a poke in the eye?

  23. Hey folks, I have been breaking my head over the pattern that it is all unwinding in. Incorrect timing etc has been a pain, I won’t say what it is just yet, but if this is it then, here is the sequence in which we will see key levels.
    7375, 7550 ,7100

  24. Hey morko, really sorry that you are in this situation. We will see 500 or lower before your stop is hit, 100%

  25. I feel guilty that you went on my call and it turned out against you. I will stop making any further calls till on the forum till I get the Damn sequence and the timing tuned in

    1. Just take a leaf out of my book and say it every day – sooner or later nobody will listen and you can live guilt free! 🙂

  26. Morning you Market Warriers,,,,Major Si, Captain Icarus and Captain Morko…well the band of brothers seems to be having so much fun I thought I’d join you….short Ftse x35 at 7535.4 :0) should get a few points at some point from here hopefully but it’s by no means a foregone conclusion…..Good Luck all…..

      2. Got to be honest Icarus I think your goin to get in a right mess you know…..i used to think like you are doing when I started but it was an expensive lesson I learnt….you can’t fight monetary policy buddy I’m sorry….it will drop at some point but not yet …

    1. Morning buddy :0) yeah I’m hoping to get out of prison soon and go out and enjoy the sunshine :0)

          1. That’s not too bad….there’s a good chance it could drop down to that..I think if you get the chance to get out at break even and replace it up 100 pts it might be safer…also if your holding for a crash why don’t you take a position on a futures contract instead,I used to trade futures a lot when I was more inclined towards swing trades….

  29. Morning all,

    Icarus don’t stress, my trades are based of my analysis and method so it’s all on me.

    I closed loads out last night, and am trying a tweaked version of my old method on S&P. Don’t get me wrong I took a hit but I’m still here.

    On the upside my pension pot is rocking

  30. Took a HUGE loss last night. No more equities for me for a while, sticking to gold and bitcoin.

          1. Yeah until it crashes vertically….I think your gold is safer…..I bet the queen hasn’t got a big pile of bitcoins next to her gold reserves !!!!

  32. Been reading up on bitcoin. You can mine it…watched some YouTube video on it, it involves processing puzzles and making blocks. I will be honest I didn’t understand it. I felt like my dad trying to work the video recorder !

    Bitcoin worries me, how is it regulated? It seems you can just process stuff and create it?

    1. Yes it is complicated and most of yhe stuff that could have easily be mined has been. You need lots of cpu to xoninue mining more.. What’s interesting is there is only a finite amount that can be mined which increases the value. So the day we have supercomputers running in our homes, Bitcoin will crash 🙂

  33. Ftse strength? Dont know why presumably its the oil price. Shell and BP are 14% of FTSE100. Also benign interest rate outlook compared to US. Cant think what else it could be really.

  34. A drop below 50 dollars oil would be interesting for ftse, both look a bit stretched now.

  35. Bitcoin factories now cost millions to set up. Funny old world. Pointless doing it now as the overheads are high…cpu and cooling…and hence margins are tiny so need to be a big operator with multi1million dollar operation to eke out a few bitcoin nowadays.

    1. And all the dog wants to do is go for a walk…just hang on gromit I need some dog food tokens :0) better than Bitcoin according to gromit :0)

  38. Well I’ve got the range wrong tday…..break even at 23.4 and its struggling to pass 25…..down now at 501…it’s a game of inches…one mistake and your stuck all day or worse you have to dump it….holding for another push…..

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