Tensions simmer with equity sell off and looking at 7250 support

11th August 2017

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Well what to say about yesterday…. the world got spooked by the escalating tension between North Korea and the USA, and the technical support levels went out the window as global indices sold off and “safe haven” assets such as gold rose. Mind you, if the prospect of nukes starting to get thrown about was truly real I expect we would be even further down. Granted markets were getting toppy anyway, with the SP making record highs each day till it hit 2490 so a pullback was due anyway, just maybe one that wasn’t quite so fast or driven by the threat of nuclear war! We dropped below all the daily channels yesterday, and might well be on a path for 7250 soon.


FTSE 100 Outlook and Prediction

Daily FTSE 100 Support Resistance Channels
Daily FTSE 100 Support Resistance Channels

A Friday after a big sell off with a lot of fear in the market. Don’t think its going to get overly bullish today but you never know – if one of them backs down then it may well turn the tables. I am watching 7330 and 7310 as support areas this morning, with 7390 as resistance. I don’t think traders will be too confident to hold longs over the weekend just in case things escalate. I imagine that most will wait until it looks like things have calmed down/stabikised a bit before piling into longs again. As such we need to exercise caution today, but it certainly looks like the FTSE could well be heading for the 7250 level in the next few sessions.

August is traditionally quite a weak month anyway, so a bottom/low around this 7250 level during the month, before a stronger close towards the end of the year does look possible, as long as no nukes are actually fired!

Resistance wise today I am watching the 7390 level, and if the bulls were able to push above this and the psychological 7400 level then we should see a rise towards the 2 hour coral line at 7497 currently. But probably not today.

We are at the bottom of the Raff channels after that fall, and there are several positive RSI divergences on the 30min chart as well, so any positive looking news over NK would see us rally back as the dip would be seen as a buying opportunity.

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53 Comments

  1. Long 7315 stop 7290 target 7370, looking for it to close the gap, if it does get up to near 7400 I will short 30pt stop for target of 7270

      1. Yea Nick, I’m surprised how weak this is, I expected a quick drop to 7300 & then rally, but I don’t like this slow drift

    1. Yes, Doubt very much they are going to go nuclear. FTSE would be 3700 not 7300 today if that was a real possibility.

          1. Yeah,the big banks lend all the money to the brokers….the brokers then use it to give leverage to their mugs oh sorry that should be clients…..then we are all expected to listen to all the trading bullshit videos and seminars of how to trade ( with all the traps built in and well rehearsed) then the big banks move it all around to suit their own ends….. Simple…wealth transfer system….end goal not money but control…. And it’s not just markets its property as well….

            1. And I’m not even mentioning the war on cash yet….and fractional reserve lending….it pisses me off people don’t know this stuff so here it is..you put you grand in the bank,they only have to keep 10% on deposit…the rest they ?lend out …..there is only 10% of the money available…if everyone went to the bank today to withdraw funds it’s not there…..hence what happened in Cyprus when there was a run on the banks and the IMF had to inject cash to keep the illusion alive….went to bank other day some guy paid in £2000 in cheques and then asked for £500 cash from his account…..oh sorry Sir the machine seems to be broken we can’t get your any cash today…..bollox…..we all need to go back to a cash society….these bank cards only give us food tokens when the cash machines work….and who controls them….yep the big banks…….rant over I love my Dog and we are going for a walk…..

  4. The Dow just seems to be showing half hearted attempts to advance …..then falling back…..bad for confidence…

  8. 7300 important price aupport but wouldnt buy it. Yesterdays low just smashed so anyone thinking of playing a bounce should think again. Expect further falls.

  10. Yesterdays bear candle was very long. It is not unusual for the market to cautiously retrace such a candle, usually with slow moves up for the next 3 days. But the low on the major bear candle always holds in such cases. So where you see the the low taken out the following day with no attempt to retrace……BOOM!! Here we come 7100 and I expect the US markets to capitulate this afternoon after a weak rally has sucked in a few hopeful bottom-fishers. Stocks now as weak a picture as you will see. But I would still buy a technical bounce lower down, maybe even next week, maybe around 7100 area if it holds.

    1. Agree CM.. 7100s then back to 7300s is what I see. One step at a time but added to shorts before the open this morning and looking to ride down

  11. It’s struggling at 7300-7310…
    Lots of sellers trapped who took the 40 pound divi Wed…if the US sells off this will be at 7200…everyone is long…

        1. Thebig divi was the perfect place to draw in the unwary…if you want to dine at this table…better bring a long fork.

  12. You can see the nerves in the traders by the eratic price movements ….it’s all about where the Dow goes….no one knows….it’s purely a guess IMO….The Fed know but their not telling…

      1. The Dax has regained 12,000……I think they are very very smart traders the Germans……I’m beginning to err on the side of we could recover some ground…But…….its tenuous ….

        1. It’s actually facinating to me……human emotion at its most basic….fear and greed……fight or flight…

          1. Here’s my thinking. The divi buyers bought up the stock much earlier and have now short sold it back to 7300. What is left is the longs stuck with the divi.
            I expect to see profit booking by short sellers to take price back up to 7475 area. At which point most shorts from there will be stopped out and most longs will be glad to have got out lucky and will stay away.
            Thats when they will sell off.

            Besides no one will want to hold positions over the weekend, so traders would want to close out positions. If the price goes up – simply means this drop was just short selling as opposed to real selling of stock

                1. I really do hope so. If 7300 is indeed the turning point i would put the top near 7500. That being the 78.6% retrace and thats where i would like to go short. But if it stutters at 7375 i might just get the eff out and save myself misery over the weekend. 🙂

                  1. Icarus, I don’t expect to see 7500 before 7270 1st, I think anywhere between 7375-7400 is a good shorting area, likely buying area will be around 7250 with the 200ma around that area

  13. Most punters have been waiting to show signs of weakness on the dow. So i won’t be surprised if dow drops at the open and reverses to take out the shorts and then sell off 🙂

  14. I hope most people understand that most index movements are algorithm-driven. Basically a machine you cant beat. Not only that, but the machines have access to critical information you dont possess…such as where stops are positioned, margin call triggers, they know where your weakness is and how to get there. You cant beat them on small time frames. Same as human chess players can no longer compete with chess and poker algorithms. The computers could beat you even without this info, so the house has an unbeatable edge over the little guy. Plus being human he has to battle his own demons like fear, denial and addiction. So which horse would you back?

    1. Well said CM its a computer game…….two ways to win…..recognise flight or flight and trade from the neo cortex….the thinking brain……..become as resilient as possible to emotions and fear………….and number two what you do so well……..become like a tiger…..wait up a tree wasting no energy and then pounce when the time is right…… You get to eat well and get a good view of what’s happening overall…..

    1. I think this is the test now….can it get higher than The bottom of CMs daily candle at 49-50…..?

    1. It did sound pretty good at the time though :0) snowball melted a bit early that’s all…….!

        1. I’m quite interested to see what price the Ftse closes at……next week is going to be interesting…whether Mcg’s and CM’s 7100 materialises….very often we get a good showing out of the blocks on Mondays with the renewed enthusiasm but this NK thing is in the background. Have to see how it plays out….what’s your thought Icarus ?

          1. Well 7100 i think has time. If ftse fell straight down to 7200 or 7100 it would just be strange and i would pile on longs. The slow grind down of the ftse just makes me suspicious and i feel we would benefit with some upside before sell off. There has to be some kind of retrace! If it had to fall to 7200/7100 it would have today. Nothing stopping the sellers to do that, yet we saw a smallish drop. So i am beginning to think there is some upside now before 7200/7100

            1. I’ve just shorted at 7300 gonna leave it over weekend……it’s manageable size I’m bullish normally but gotta say I don’t like this too much……anything happens in NK it could help a drop….

              1. I remember trading the Dax when the Ukraine crisis was happining and the Greek crisis when that president didn’t want to make a deal.had some gap downs then …I think it will go back up…i think we will see 7600 at some point but I’ve watched this today and I think Mcg and CM are on to something……

                1. Oh and I’m no technician at all but that dow 5min …….well is it a cup waiting for a handle?

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