FTSE 100: 7450 Resistance
And the bulls are back - think they must have been to Asia with Trump as since he got back the S&P has bounced steadily from the 2555 and broke a new record yesterday surpassing 2600. Asia stocks also made new records with the Hang Seng clearing 30,000 to reach the highest level in a decade.
In the UK we of course have the budget today. but figures yesterday showed that public sector net borrowing picked up more than expected in October. The OBR are also forecasting public finances to deteriorate further in the second half of the year. On the flip side, the weaker pound and strong global demand have boosted manufacturing orders to their highest level in almost 30 years.
With it being budget day it might be a little bit choppy, depending if the budget falls flat and how many new initiatives are unveiled. I expect the masses will have to shoulder a few giveaways as per usual! diesel drivers will be hit with extra fuel duty and we may see a lowering of the VAT threshold.
The FTSE 100 managed to break above the 7405 level yesterday but of course then stalled at 7416. However, the bulls haven't managed to pull away as yet from this area, while the bears have retreated again. With 7405 breaking, the theory is that we will now rise to test the 7430 resistance level, and we also have 7450 above this. The FTSE 100 still lags the other indices in terms of breaking records, and is still some way off its 7600 high. If the bulls cannot break 7450 then a decline towards 7330 still looks possible.
The FTSE 100 dividend is 6.9 today so bear that in mind at the close. We may well see a little spurt up at the end of the session, as the divi hunters appear.
Support wise, there is 7399 initially today, with 7352 below that. If the budget disappoints then the bears might well use this as a catalyst to break lower again, but with cable holding above 1.32 (and rising) we are seeing the bulls' efforts to get the FTSE up faster thwarted. The 2 hour coral at 7366 held well yesterday and that has moved up to 7375 this morning, and with a bullish trend still in play, then we will probably continue to see the dips get bought up. The resistance levels keep getting hit but not getting much of a reaction, with a slight overshoot and then a stall - so it will be interesting to see what it does at 7430 and 7450 today if we get there. Tentative shorts are worth a go, maybe lower stakes and add to them if we start to drop.
The days either side of the Thanksgiving holiday (Thursday) in the US are usually bullish. It was a shame the S&P long order just missed at 2579 yesterday as it was a decent rise from the 2580 level. They might well want to have a strong close above the 2600 today.
Cautiously bullish today, but watching the resistance levels again that are not that far away from where we are currently.