30th August 2017
Stock markets did the opposite to North Korea’s missile which went up and came crashing down, while markets dropped then rose strongly. The FTSE 100 long at 7302 came in nicely, though the gold short needed a bit more patience. To be honest I wasn’t expecting quite such a strong recovery yesterday after the missile news.
Donald Trump seemed more statesman like in dealing with it as well, rather than too hot headed. Anyway, the FTSE rose to test the 7360 level where it remained overnight, and it now needs to break the 2 hour resistance at 7376 this morning. We also have some resistance at 7393 above that. Could be an interesting day!
FTSE 100 Outlook and Prediction
For today I am thinking that the bulls will challenge for the 7400 level and be keen to break above this. The Dax has managed to push above 12k again, and with 7300 holding yesterday the bulls have a bit of momentum behind them. We are still in that range between 7300 and 7550 so may well see the upper target around there later this week or early next.
There is a small dividend today of 1.2 so unlikely to see a rush of buyers before the bell to collect that.
As mentioned above, initially there is resistance at 7376 and 7393 which may well hold initially as longs from 7300 are cashed in for a decent gain. On the 30min chart there is support from both the pivot and the coral trend line at the 7340 area so a long here is worth a go. If this level holds then we might well see a rise up towards 7400 this afternoon. If the US builds on yesterdays gains also, then we may well see a break of this level this afternoon.
The daily chart is still bearish, with resistance at 7391 and 7424, though the 10 day Raff channel has turned up now, which could well tie in with a rise towards 7550.
On the flip side, if the bears take it back down again (and they do seem to need a “crisis” of some sort to make it drop, and then its only short-lived anyway) a break of the 7290 level will likely lead down to 7150.
Generally though I am feeling more positive for the FTSE 100 and expect us to push higher over the next few weeks. So, watching 7340 for support today, and 7424 as the upper resistance area.
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Shooting star candles on gold, EURUSD, GBPUSD and a possible strong dollar bounce will get people positioned accordingly. Stocks have long daily candles troubling them as they can trade within that range for a while without offering clues as to direction. I am in cash waiting to go long stocks. I suppose FTSE is very playable long with stop under 7288 esp in view of strong bounce off first major support yesterday. Might just play a 4 hour long candle today or tomorrow if it retraces lower and bounces on that time frame.
Sell 7380 pivot.. looking for month end weakness then a move back up on Friday with the new month and non farm payrolls. Could retrace all the way to 7300 but depends on US markets. Trump speaking on tax reform this afternoon but expecting the detail to be lacking. Eventually I think we’re going to break 7300 but can’t short into it given the strength of the support