Looking bullish | 7203 FTSE 100 resistance | 7164 7145 support

25th January 2017

FTSE 100 Support 7152 7145 7143 7132 7083
FTSE 100 Resistance 7169 7189 7194 7203 7260

Good morning. The bulls just about managed to hold onto the 7150 are yesterday for a another modest rise to a high of 7180 after hours, before a drop back again. The earlier long from that level worked well for a rise to 7175 on the court ruling. From the bull’s point of view they needed the FTSE 100 to close above 7145 as a close below that would set up a trip down to 7085 pretty quickly. With that holding the 2 hour chart remains bullish but the bulls will need to break through 7190 to push any higher, as we have resistance here from the 200ema on the 30min chart, for a push to 7260. The UK Government lost their appeal in the Supreme Court yesterday so parliament will have to vote on the invocation of Article 50 in a blow to the PM and dragging out the whole Brexit debacle longer.

FTSE 100 Outlook and Prediction

FTSE 100 Prediction
FTSE 100 Prediction

We have dropped back from the 7180 area tested after hours last night, and I think we might see a retest of the 7145 level today. We have the bottom of the 20 day Bianca at 7132 which may well hold, however should the bears break 7145 it makes things look a bit more bearish for a trip down to 7080. The US pushed on well during their afternoon session, with the Dow looking like it might challenge for 20k again soon, only 50 points away at the moment and such a headline would be good press for the new President.

I’m actually still feeling fairly upbeat for the moment and feel that this is just a pullback from the overbought 7355 level and may well see some more upside yet. Of course, after that then we may well get a bigger decline! For today though, I think buying the dips around the 7164, 7145 area will be ok, but should that 7132 level break then a flip to short to test 7080 is probably called for.

Initially, the bulls will need to break the daily pivot at 7170, so we may well get an initial dip from this level. Gold did eventually fall back from the 1215 area as expected but it took a long time to do so. Such a drop back could be argued that we will see a rise on the indices. However, things are still mostly politically and currency driven, making it just a bit harder to call!

70 Comments

  1. Morning.
    It was a bit now or never from a momentum point of view that 7175 got broken this morning, so that post opening pullback to test it was a nice long entry.
    200 was a little short term overdone, especially built on an overnight cash gap, but if we hold 80ish there seems to be little reason why a try at 220 resistance isn’t on the cards and big “Trump breaks 20,000” headlines.

    1. Agree with this tmfp. Went for a short at 7203 off the 10 day Bianca but got out for a nervous 6. Looks like it might well dip back down to the 7175 level now (or the 7180)

      2. A bit of a false breakout/bull trap? Let’s see what they’ve got. Teetering atm.
        I’m running red on a too early relong after my nice little early scalp, undecided about where to stop it.

      3. A bit of a false breakout/bull trap? Let’s see what they’ve got. Teetering atm.
        I’m running red on a too early relong after my nice little early scalp, undecided about where to stop it.

  2. I wonder if this drop on FTSE is the 1st arrow yet or after the 2nd arrow? Will it go up again in the afternoon?

        1. I think you may well find that 7203 is a winning position …the trouble is sometimes when you’ve spent time underwater with a position you are sometimes glad to get out without losing when it hits break even,that’s usually when it goes off in your original intended direction….I’m off to walk the Dog…..

  5. A little bit of life in the old dog yet then, next stop for meaningful short term resistance around 82?

    1. Didn’t quite make it, stallled around 38.2% of the 40 pt drop.
      Really want to see it hold 70 ish or pressure’s on for third look at 60.

  6. Hi all,
    Its looking like the old times again in here! Anstel AND tmfp… the deadly duo reunited 🙂

    After 15 days of consolidation, the dax (and others) looked set for a breakout… that was my initial analysis and yet somehow I stayed short as it broke higher.. much raised heartrate later I took some nice profit, but not exactly pleased with my process… win via position sizing rather than level picking skills. Still, happy to have it in the bank.
    Currently short dax, looking for a retest of 700 before 1pm… I kindof expect the US to come in all guns blazing for some reason – could today be the 20k day – and if so, does it blow past it by 100+pts ??

    Another day in paradise 🙂
    GL all

    1. I remember you when you were in short trousers… 🙂
      There may be a bit of weakness in Europe before the DOW, although could just as well be a hedging rally, that DAX appears rock solid at the mo.
      Still sat looking at some minor red ink on my longs and trying to be patient.
      A little boost for long morale came from a short recommendation from autochartist just now.

      1. Haha, my trousers are slightly longer now and I cry much less when taking huge losses 🙂
        Still glad to have you here adding wise words though!

  8. correlations with fx are being ignored. index strength so far resisting any downward force..
    dax has moved 150pts up, which i have in my mind as an averagely large move (discounting the occasional 250 / 400 pt ones!).
    Balls to the wall says its a sell, but its resisting so much….

  9. It’s hard to pick up little outbursts. What a shame. You never know if it’s finished or not. Had short and long scalps in the morning for a ten of points but now sitting on sidelines waiting for a pull back or something.

    1. just realised something – why am i shorting the strongest market (dax)?
      I think its in the hope of a correction and that it comes into line with the weaker markets.. not sure thats going to happen or is a good general strategy..

  14. So I notice cable has rsi divergence on the 5m chart looking at a line from 10am to 13:20 (now).
    rsi pointing down which would correspond with dollar strength and a push up on dow…
    tmfp – you’ve forgotten more about rsi than I know, so whaddya reckon?

    1. That’s not the way I use rsi divergence, too long a timespan for too short an instrument.
      12570ish on the 5 minute looks ready for a third test and will probably hold (temp?) because getting oversold by then. That’s all I got there.
      On the daily looks like it’ll start running out of steam soon, certainly at the prev high 12775 if this rally continues, too overbought to get through.

        1. The 1m rsi really does give some insight – i’d not been using 1m for months as trained myself to go higher on 5m, but the 1min rsi definitely helpful

          1. Use different time frames in conjunction and you end up with Hugh’s old three confirmation signal.

  17. Still getting my head around closing my Dow long 110 points ago seeing it tear through 20,000 (let’s see if it holds it at open) and the ftse just sat there like, meh, whatever. We should be at 7250 even with the stronger £. All the money is in Germany!

    1. i guess the fx (eur, gbp) kinda work out with the pricing… trying to convince myself of that!

  19. Hello all, back on here for a bit. Not been doing much trading sinse Trump became President. Just shorted Dow 20012, probably wrong level but time to build those swing shorts imo

  20. Hi fellas,

    Having closed my long dax at 780 and Dow at 990, wondering about a re entry? I think it’s bullish, but trying not to marry it all the same. Long order for 755 dax and 982 and 953 Dow. I’ve a fairly large underwater FTSE long, so hoping the pound retraces soon.

    1. I’m also short Dax 801 and Dow 20,011 Dutch – slightly concerned about the volatility of open but aiming to keep them as Swings more than anything.

    2. I’m with you at 797 since pre-open – half size..
      also long gold 1194 – v small, potential to scale in if it pushes lower..

      1. Also with you on the Long at 1194, such a small stake. I’ve quite a few FTSE trades running so only going light on other markets – actually cut the Dow Short as I didn’t want to get trapped in a trend and looking for a stronger re-entry.

  23. Dax is looking bombproof, FTSE tired and Yanks are frightened to sell the DOW in case they get called Unamerican.

      1. Thanks Nick.
        So, after eight hours of a session in which the DOW and the DAX are rock solid, we made a brief new rally high and are now bumping along pretty listlessly, barely +20 on the day and only 40 off the bottom of a 220 point decline.
        Not exactly impressive is it?

  26. Regardless of the pound what on earth is going on here? I should be 20k up on this ftse long by now?! What will it do when dax and Dow retrace?!

  27. Had an inkling that might happen after the close, nice little +12 short to finish the day.
    I started off fairly bullish and ended fairly bearish, very difficult to get to grips with, this market.

  28. Just noticed RBS releasing results today. Can’t forget how much George Osbourne got roasted for selling part of the U.K. Stake to hedge funds at 330p in Aug 2015. Some trade that looking back.

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