22nd February 2018
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We got the dividend fuelled rise for most of the day yesterday unfortunately nearing the 7275 resistance area just as we approached the bell so not a good time to short the cash market, hence moving the order. Inevitably it pushed a bit higher to 7290 before the bears reappeared and we are now down at 7210 and looking like we will head lower. Was decent resistance in that area really and if it hadn’t been for the dividend was a good shorting area. The Fed minutes reignited the markets worries about rates increasing quickly and sooner, leading to a rise in bond yields and a sell off on the Dow and S&P. The Fed was actually upbeat about the economy but rate rises overshadowed everything else and was the focus of attention. The S&P also managed to reach its 2 hour resistance at 2740 before dropping back significantly. Gold also managed to hit the 1335 resistance before dropping off.
With the FTSE 100 now below the 7220 support and the charts still bearish we are more than likely going to drop down towards 7150 and possibly 7090.
At Wednesday’s Inflation Report Hearing, Bank of England Governor Mark Carney said that interest rates are likely to rise three times in the next three years due to ‘excess demand’ in the UK economy.
FTSE 100 Forecast and Prediction
With the drop off the resistance level yesterday and looking like it will probably gather a bit more momentum I am still favouring shorting the rallies. The longer time frame charts are still bearish. There is decent looking 30min resistance at the 7235 area so an initial short here looks worth a go as with the market moving below 7220 now we should be on for a trip down towards 7150, and possibly the lower support at 7090.
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