Rise and dip bear Tuesday | 7460 resistance 7410 support | Trading help

12th September 2017

The market nearly reached both extremes we were looking for yesterday – 7380 for the low and 7440 for the high – and did a nice rise-dip-rise between those levels. With the damage from Hurricane Irma not being as bad as feared and rates likely to remain low for the time being, the S&P rose to a record high and treasuries tumbled in the US. The FTSE 100 managed to remain above 7400 and as mentioned yesterday if the bulls can push through the resistance levels at 7460 area then I am expecting us to reach 7500+ this week.


FTSE 100 Outlook and Prediction

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

I am expecting a rise and dip today, encountering resistance around the 7465 level where we have a fib level and also R2 for today. The bulls struggled to break the 7440 level yesterday but we still got a bullish Monday. As such we might well see a bear Tuesday today, though I am thinking that the S&P will soon be wanting to visit 2500! We have the BOE on Thursday though I expect that they will leave policy unchanged for the time being, though we have inflation data out at 09:30 today which may show an increase. Expect some moves around this news release. We also have option expiry on Friday.

So, for the bulls, watching 7440 initially, then more key resistance at 7460. If they can push above that then we are likely to see 7500 where we have the top of the two Raff channels.

For support, 7380 still looks key even though we bounced just slightly above this yesterday. Below this then I am watching 7369 and 7350.

For today though I am expecting a rise and dip to play out. Gold has neared the bottom of its Raff channels so may be starting to find support here, and things might start to go defensive soon, which may well see a dip in equities. The UN has increased sanctions against NK, but stopped short of an oil embargo (at the behest of the Chinese I would imagine).

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31 Comments

  1. Im all in and its a tough hold. Other stock indices behaving themselves and moving on nicely but something has a foot on FTSEs throat. The pound is looking at a major double top today, or a major breakout. I dont think pound strength is all that bad for ftse, but maybe limits gains.
    If longs can survive today they might have a run later in week.
    A drop under 7400 gets me running for the hills.

  3. Buying 7400 here.. think Sterling consolidates for a bit with the double top which should help it recover. 7380 pivot is key

    1. Maybe. But if there was any strength in FTSE surely it shouldnt have given up 30 points in a couple of minutes? Sidelines for me. Live to fight another day.

      2. It looks like Sterling is topping short term around $1.328. Dax and Dow haven’t weakened so it’s just a currency move. Will bail out below 7390 for a 10 point loss. Not been a bad morning so far as sold yesterday’s high and then the inflation data caused the drop. If we do break 7380-90 area then I’m not sure where it’s headed as you’d expect if other markets weaken there will be at least a retest of the highs to come, which makes another trip to 7300 directly seem unlikely

  8. Admittedly the GBD is massively strong…see dollar bounce against other currencies last 3 days and still the GBD jumps against USD…must be the reason hokding ftse back.

    1. With inflation coming in higher it suggests the possibility of an interest rate rise which is good for the pound….however in my opinion much of the recent strength in GBP/USD has come from dollar weakness…..I Don’t think we will see an interest rate rise…if we do it will be a token figure…I See further weakness in cable on the horizon…

  11. Hi guys. Been a while since I last called in. It looks like currency to me too. After all, FTSE 100 gains since the Brexit vote have been mostly about currency. I think it isn’t just dollar weakness, as the pound has been clawing back ground from the euro recently as well. It’s also up a pc on the yen today.

    There may well be several things going on here. First, a technical retracement of the fairly relentless drop against the euro seems reasonable, perhaps to test around this 90p previous top region. The inflation number obviously generated a reaction, and I’m confident that is holding the FTSE back while others rally. But we all know there won’t be a rate rise. It’s a self-fulfilling prophesy for that matter. Traders bet, as they have today, on a higher chance of a rise, pound strengthens and imports become more expensive – inflation calms down again. Problem solved without lifting a finger. Also, it may be a general function of the easing of risk off that saw most things sold and the yen bought. Traders then look and say, ‘perhaps we have overdone the sale of the pound in the short term?’.

    I do a little bit of other business in the euro, and I intend to hold my euros until further into the winter, or to such times as we see 93p again. I don’t expect negotiations to go well.

  12. Out of longs.. different to yesterday as looks bearish unless 7400 breaks. Not sure where we go bigger picture now so sitting out

  14. The 4 hr chart ftse is interesting, higher lows but also a wedge and we may remain rangebound for a while. Very strong double top resistance at 7425. For me the pressure is now from above.

  16. Still holding my Dow long, ,but hedged small on sp500 short.

    Plan is to close long tonight and short heavy. Looking for Dow 21180.

    Maybe a good time to buy gold for those who sold last week

Comments are closed.