Well it took all day but late on we finally got a drop from the 7540 resistance and a rise in gold so we were well positioned for that move. I hadn't expected the FTSE 100 to drop quite as much as it did (it tested 7500) otherwise I would have held that short a bit longer. The bulls defended the bottom of the 20 day Raff channel first thing at 7510 so we got the expected rise during the day, but the bulls still failed to push above the 7555 level. If the bears manage to get it down to 7485 I am still thinking that area will hold as support. Overnight we have had some strength off the back of Asia, with a rise back from the 7500 level.
For today I am thinking that the bears might well manage to test the 7485 support area, if they can break 7500. It's still a case of buy the dips though, and a dip down towards the 25ema on the daily at 7472 would be almost ideal. Talk yesterday (swiftly denied of course) that the US was readying nuclear bombers caused a slight wobble, but again the bulls have fought back. Asia put in a strong performance, with the ASX rising slightly during their session. We are stuck in a bit of a range between 7500 and 7540 at the moment and will break that soon, probably to the upside, something major notwithstanding.
So for today, I am thinking that we may well get an initial dip down from the 30min resistance area at the 7527 level, to test 7500 and possibly 7485 before a rise back. There is no major news out today, but we do have the chancellor answering questions in parliament at 11:30 - so might see a bit of chop then.
We still have the key resistance at the 7555 to 7565 level, along with lots of shorters with stops just above 7600. I wouldn't be totally surprised if we head for a stop hunt around there before any meaningful drop.
The 10 day Raff channel is heading down now after the failure to break above that resistance area, though the 20day is heading up, and was the channel that supported first thing yesterday at 7510. So for the moment, it is still buy the dip, with 7480ish area looking good.