The FTSE 100 initial rise stopped at the gap close at 7661 instead of popping just that little bit higher to the resistance level at 7667. It then got the sell off as expected, and dropped down to a low on the evening futures at 7575. The US markets continued to decline also, with the S&P dropping down to 2821, as the general rotation of money comes out of stocks and goes into government bonds – at least that's what the general consensus is. Also I expect some profit taking after the run from early December has ended at the 7795/2877 areas.
I mentioned the 7580 area as support in yesterday’s missive and that area has held for the moment – if it does today then it might well act as a springboard for a bit of a bounce today.
We are sitting right on the 7580/7575 support area as I write this and we may well see this area hold initially for a push back towards the daily pivot at 7606, and possibly the 200ema at 7639. We have been expecting this drop since the bulls failed to break the 7793 and technically it's just a pullback still within the bullish trend. Technically! However, if 7575 breaks then a trip down to the 7550 Raff support area looks definite, with lower support at 7450.
If the bulls do manage to defend 7575, and the ASX 200 (Australia) bulls did a decent job of a strong last day of the month, then we may well see "panic over". The market had almost talked itself into dropping, and just needed a couple of catalysts. It's still pretty positive for January, with the S&P still looking to end the month higher than it started. It was certainly a strong start to the year across the board, and a bit too strong as it turned out.
Cryptocurrencies had another torrid day yesterday with Bitcoin once again dipping below $10,000, though again, it's bounced back above.