We got a bit of a bull Monday bounce yesterday as tensions over North Korea eased a bit, though the US is still ready to take action if needed, especially if Guam is attacked. Diplomacy and China seem to be diffusing things for the moment. I imagine it will all die down by the end of the month and then North Korea will not lose face with the population. As things have calmed, the VIX (Volatility index) has dropped back to around 12. With the rise yesterday the 2 hour chart has gone bullish now and is showing support at 7310 - the same level as the 20 day Bianca channel for today. The key will be if the bulls can break above 7404 today - if not then yesterday will look like a dead cat bounce.
FTSE 100 Prediction
We had a bull Monday once again yesterday so will we see a bull Tuesday today? There is resistance at the 7385 level where we have the 200ema on the 30min and then a fib level at 7404 just above this. If the bulls do look capable of breaking and holding above 7400 then rather than a dead cat bounce it looks like it might be more bullish for this week. That means that we will likely see a rise to the top of the 10 day Raff at 7485.
If the bears however reappear at the 7385/7404 area then a trip down to 7310 looks likely, where we now have support on the 2 hour chart. Below this then the recent low at 7295 is still valid as support, but if this breaks then the picture looks a bit bleaker and we are looking at 7200 or lower.
For today though, I am watching the 7385/7404 area as resistance and 7310 as support and I am thinking that we will probably see both those areas today.
