Slow rise to 7388 possibly 7405 | New month money | Still bearish

3rd July 2017

June ended on a fairly bearish tone as the FTSE 100 fell from the 7370 level to dip just below 7300 before closing around there. After the bell there was a bit of buying to try and pull away from the 7300, with the bulls managing a few points. Things still look bearish though with the moving averages on the daily chart widening now – after the resistance test of 7467 a few days ago. The picture now looks like a decline to 7255 is on though there is still that support at 7279 for the moment. Should the 7255 level break then 7150 is the next obvious level, then the “Theresa low” at 7100 – where the FTSE fell too when she announced the snap election. I am not sure we will see that low as the 200ema on the daily is at 7180 which is likely to support any decline.

News flow over the weekend was fairly quiet, main story being about ending austerity but where does all the money come from!

Looking ahead for today, the highlights include Eurozone, UK and US MFG PMIs, US ISM and construction spending.

Asian stocks were mostly higher as oil extended the longest winning streak of the year. The yen swung in the wake of a crushing defeat of Japanese Prime Minister Shinzo Abe’s party in Tokyo elections.

FTSE 100 Outlook and Prediction

The direction is not overly clear for today but as its bull Monday, and the start of the new month, I am thinking that we will get some sort of a rise, at least initially. The levels that I am watching for resistance are XXXX and 7405 for today, while support is at 7279 and XXXX. These 4 levels all looks pretty key and if seen are worth trading off, with long off support, or short of resistances.

The bigger time frame charts are all still bearish, suggesting further downside, but I am thinking that if the bulls can push above 7405 today then that picture might well change. As I expect you know we have the US closed tomorrow for Independence Day (and finishing early today), so we may see a bit of a lacklustre day on the FTSE 100 tomorrow. Bear Tuesday again!?

The ASX200 had a fairly flat day, looking weaker but not by much. Oil continues to rise which may well help the FTSE, whilst cable is back below 130 but still looks cable of 135 – if it does that then that may well drive the FTSE lower.

So, in terms of direction its hard to call today but watch those key levels – am thinking it will rise for most of the day and dip later.

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