2nd March 2017
FTSE 100 Support 7355 7312 7308 7280 7255 7223
FTSE 100 Resistance 7370 7381 7399 7415 7425 7438 7452
Good morning. Well that was an interesting rise yesterday, pretty much from nowhere as the speech hadn’t really caused much buying at the time. Though the talking heads on TV might disagree I think it was as simple as short covering, rather than everything being well in the world. It hurt a bit as it broke through every resistance level I had so my shorts didn’t fare well, but it also wrong footed some bulls I know who only go long. They closed recent longs at 7310.
Interesting stat – its taken 66 days for the Dow to go up circa 10% (19k to 21k)…. how bonkers is that! There does seem to be a bit of a rush into equities at the moment as well, maybe in the absence of anywhere else to put your money. Could well be a bit of a bubble though, especially when you read about guaranteed Share Linked Savings Accounts. Sounds like mortgage backed collateral debt obligations, and we all know how well that turned out.
Investors are looking ahead to a speech by Chair Janet Yellen on Friday to reaffirm a view that interest rates are likely to go up this month. The odds for a Fed rate hike in two weeks swelled past 65 percent.
FTSE 100 Outlook and Prediction
Well usually after a day like yesterday you would get a bit of consolidation, or a pull back but it seems like equites are the hot ticket in town at the moment and buying them is a one way street. Cable dropping yesterday also helped fuel the FTSE rise, and its now below 12300 – that 12500 level still looking like a short term high. I am looking at 7400 and 7425 as resistance today and conscious off the fact that the daily RSI(10) is at 73 again, we are testing the top of the Bianca channels (7370 and 7399) and not far off the Raff 10 day at 7414.
However, as we know yesterday was one of those days when it just busted all resistance levels and screwed over a lot of people in the process. Trending days can be very frustrating. However, it does look like it can go a bit higher yet (maybe 7520 tomorrow or early next week).
Talking to one trader friend last night one opinion is that we are just witnessing a transfer of wealth from retail to corporate as they stop hunt and wrong foot as many as possible so bear that in mind. Probably luring in as many buyers as possible to then flip it. As we know, retail buy high and sell low. Just need the mainstream news media to hop on the band wagon and start ramping too and that will be the top.
Support wise today, we have the pivot at 7355, and then the 7310 level with S1 and the 200ema on the 30min chart. Lower down, 7255 for the 20 day Bianca – might not get that low today (famous last words).
I still think there is a bigger down move coming this year – maybe mid to late summer, possibly early autumn now as the year has started strongly. Gold still around the 1250 level.
Morning chaps took 31 pts at size Yday but out way too early…..presently short yes I say that again I’m short lol from 74.7 but I’m trading against it at a third size….good luck all…
Would expect a bit of a pullback after that crazy move yesterday. 7393 fib resistance level seems to have capped it for the moment, thought it might have managed 7399 on that initial rise though.
Thing is though Nick that’s the problem,,everyone who’s thinking logically will be expecting a drop but that’s usually when it goes up……I’m playin a hedging game now and nibbling away at it….I can dump any longs if it tanks and my short will cover it….just a bit of fishing now :0) and a cup of tea but I’m absolutely not ruling out further rises up to 7500 area..good luck buddy….
Yep, it behaviour the past few months is more suspicious than rational unfortunately.
Two short hammer candles on daily chart before yesterdays move provided excellent opportunity to challenge 7350 area and take out retail shorts. Now we will typically consolidate in the higher range of yesterdays candle for a few days, although tomorrow afternoon may cause a spike up to further squeeze the non-believers who remain solvent. I am very impressed with Nicks daily ‘map’ but prefer to play the daily chart myself. Personally I use ETFs to trade and avoid leverage like the plague, the world is strewn with the corpses of leveraged players. You cant win at that game.
Yes greed is the enemy…….
I think we could get a small move down from here,it’s looking a little nervy to me…
Gold starting to rise a bit now….
Hammer candle on gold on Wednesday but could not be played as todays price never went above the price of Wednesday, a necessary condition to go long. So IMO correct play on gold remains short side. Personally I dont like shorting as the costs are somewhat prohibitive after a couple of days even without leverage.