18th August 2017
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Yesterday finally saw the bears take back control from the bulls following three days of the relief rally. The drop was mostly due once again to turmoil in US politics, as dysfunction and paralysis seem to be more and more prolific. Rumours that Gary Cohn, Trump’s top economic adviser, was resigning sent jitters through the market. Then we had the sad and tragic news of a number of fatalities following another terrorist attack, this time driving a truck through tourists in Barcelona.
FTSE 100 Outlook and Prediction
We have option expiry today so likely to see some chop at 10:10 till 10:20ish as various contracts expire and roll over. Its also Friday so likely to be odd anyway! For today I am thinking a rise up to the 7395 resistance level that we have on the 2 hour chart and then a bit more down side. The bears will be keen to break the 7345 level initially though as we have support there, but the bigger test for them will be 7300. We have S1 here at 7303 and also just below a key fib level at 7312. As you know, 7300 held well on the last leg down so if they can break this level then 7247 looks likely, where we have the 200ema on the daily.
For the bulls, they will need to overcome the uncertainty in the US political world to drive this back up, which may well be possible and yesterdays “chaos” is another storm in a tea cup. Thats certainly been the pattern since Trump became President. The market has a wobble for a day then rises back. If the bulls were able to push above the 7430 area then we could well be on for a push higher again, with 7600 or more still looking possible.
So, watching 7312 for a support, though a break of 7300 (30min candle close below this level constitutes a break for me) will invalidate that support, and 7395 for resistance, with 7430 above that. We have effectively been in a range from 7300 and 7550 since June, so a break of that range is a big deal.
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I wont be buying it today. Wait and see time. It could bounce here but would prefer now to see the test of 7300. Why not, its August?
Could be a bit of a pop higher at 10am, going to try and play it but on reduced stake size as we’re in free fall. 7100s on FTSE and 2350 on the S&P are coming here before the next up leg
Very weak.. bought 7311 and got stopped at breakeven as we didn’t rally in to 10.15. Think we close the week under 7300 now
Hi Mcgcapital,
I don’t want to try to tell you what way to trade expiry, but its worth looking at the way I do it, at 10.10 I look to see what price it opens, then I wait for a 10 pt movement and buy or sell with a target of the opening 10.10 price, its a very reliable trade so check it out, next month is triple witching for it will most likely move 20 pts,
It usually starts rallying around 10am and then picks up even more at 10.10, so usually I buy at 10am.. the last two months this hasn’t worked though. The last 12 months the 10.10 move has been bullish 10 times and bearish twice so it seems like good odds to go long. I’m not sure whether that’s a function of rising markets and people exercising calls over puts though
Yea I allway say stick to what ever works for you, I do the ASX aswell, my style is to try to look for around 10 pt trades and use good steaks, I have one set trade per day and then just see what else I think would be a good risk reward, I know its not much but I’m happy if I can return a average 20 pts per week over the year.
7290 will now be tested simply because it hasnt come this far not to hit double-bottom territory.
Hey Icarus I hope you had a short tucked away somewhere :0)
Might be a bounce here..
Yes i do have a short but also a long same size
It gets a bit too comfortable though don’t you think?…when you close one side and you get exposed it’s pressure on again….all the time it costs in finance…..mind you it has its advantages to reduce the risk…
Yes it does. So far profits have been much higher than daily finance. So all in all net equity has been on an upward trajectory. Have closed hedges a couple of times and reopened at favourable levels so its worked out okay. Helps me make some money while i wait for the selloff!
Yes I was hedging a lot when I got stuck in that long in June…….it worked really well….but it’s just one mistake and you get stuck in the middle…..not easy at all……then you need two winning trades to exit your position…. Just got to be on the ball as much as possible…..
Agree it can double the headache if not done right. Most imp bit is to cut and run at the right point