New month money, can the bulls break above 7220 yesterdays support? Trading Analysis

New month money, can the bulls break above 7220 yesterdays support? Trading Analysis

1st March 2018

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Well that has turned into quite the drop off 7290, as after the initial rise to that level during the morning the FTSE 100 swiftly reversed and is now 100 points lower. Was good to get some points off that fall and closing before the divi was a good move, though there wasn’t much buying appetite. The 7218 support level held initially just after the bell as the bulls fought it back up to 7250 only for the US to then sell off and bring everything with it. The S&P 500 Index dropped more than 1 percent, ending February with a decline of 3.9%. Its been a choppy February, with some large moves up and down, with a lot of volatility, after topping out in January.

It’s all about the interest rates in the US driving the moves, with Powell eluding to 4 rate rises rather than 3 this year, despite a general upbeat assessment of the economy. In the UK we had Toys R Us and Maplin finally go into administration having both been on the ropes for a long time. Debenhams is probably not that far behind! Unfortunately that means nearly 6000 job losses, and they have probably been asset stripped and loaded with debt (since extracted to the bosses bank accounts!) in the meantime so there isn’t much thats salvageable. Both had old business models, were overpriced and didn’t really modernise, coupled with the online sales of the things they sell, was the death knell for both.

FTSE 100 Forecast and Prediction

For today I am expecting a bit of an initial kick up after the decline yesterday. Its the first of the month so we may well see some new month money flowing in (and quite a nice dip for them to buy into as well!). There is initial support today at the 7178 fib level and then the 10 day Raff channel below that at 7163. This latter level is the overnight low also and we have climbed a bit off it already. Below this level then 7145 is looking a pretty key support level as a break below that gets things quite bearish and we could be looking at sub 7000 again.


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