More North Korea missiles with FTSE looking like testing 7300

29th August 2017

I mentioned 7330 as a support level in yesterdays very brief email and it was tested as news broke that North Korea have rattled the cage again. This time test firing a missile that flew over Japan. Futures prices understandably dropped sharply and gold rose above $1300 – and it has stayed at 1315ish since. The FTSE 100 futures prices regained some ground though to climb back to the 7365 level as I am writing this. The sharp drop has left a gap at 7376 and I am expecting a bit of a bear Tuesday again, as that missile firing will add to the risk-off feeling at the moment. So short the rallies today. North Korea were probably hoping to get away with test firing another missile while US eyes are on dealing with the aftermath of Hurricane Harvey in Texas.


FTSE 100 Outlook and Prediction

FTSE 100 daily channels support and resistance
FTSE 100 daily channels support and resistance

The missile test will likely fuel the risk off mode and we may well see a test of the 7300 area at some point early this week. However, that area is pretty decent support at the moment, and we have in fact shaken off some worries already and climbed from the 7330 area mentioned yesterday. The bottom of the 10 day Bianca is at 7320 today, and traders will be watching for Trumps reaction to this latest test firing.

The FTSE 100 might well experience bear Tuesday today, and the 7414 area is looking like decent resistance at the moment and a decent spot to look at going short, if it manages to climb a wall of worry and get that high. On Friday we dropped off the 7440 resistance area (that short order at 7442 missed by 0.7…. arggg) and that holding as resistance keeps the likelihood of a test of 7300 alive. With the weakness from there, the 2 hour chart is now bearish, also showing resistance at the 7414 level.

A drop down to test 7300 for the end of August would actually all play out quite well, ready for a climb back up during September as everyone returns from summer vacations – the last week of August can see a false dip with September seeing a rally and that might well play out this year too.

So, watching 7300 for support and 7414ish for resistance today.

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8 Comments

  2. A decent shakeout required in stocks anyway, will probably set up a decent buying opportunity. 7291 is onviously major support which I fancy will be broken. With gold flying high perhaps ftse could test 7000 this week?

  3. Cashed shorts from 7440 area at 7310 and now long from 7300. As I’ve said all summer, we will see that 7090-7130 area before a sustained rally. But buying and selling the major pivots are good risk reward so long with stop at 7288 and a target at 7335 initially. It’s oversold already on the hourly so probably a bounce coming before support breaks down, even if it’s only modest

    1. Taken half off at 7325.. they love pumping the Dow up pre US open for more selling when it’s trending down

        1. Out now.. bearish below 7340 area but with the floor at 7290-300. Happy to be out as it missed my stop by 0.2, so feels like a bonus

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