Strength in the US markets failed to carry through on to the FTSE 100 yesterday, as it was weighed down by oil companies, WPP (LON:WPP), and also USDGBP (cable) making new highs above the 1.43 level.
The FTSE 100 trended down all day, falling from 7270 to 7190 as its lowest, before a small rise overnight. Meanwhile Asia fluctuated as investors parsed a mixed set of economic numbers out of China. Unfortunately the S&P didn't dip down to the 2655 long order yesterday as it had a decently bullish session, climbing off 2660 instead to its highest level in a month.
We have a 9 point dividend on the FTSE 100 tomorrow, which may well lend some support for today. As mentioned yesterday I am watching the 7150 to 7300 range for this week still. We have however got some more resistance at the 7273 level on the 2 hour chart as the coral has turned red here signifying a downtrend kicking in.
For today we may well get a bit of a kick up as the US strength from yesterday carries through and if cable stays around the 1.43 level. I am looking for a rise towards the 7275 level which looks like it will be a decent shorting area, though above this I still have the 7284 and 7320 areas a pretty key for this week. If the bulls were able to push as high as the 7325 level then this is another short though I don't think we will see it today, so haven't put it in the trade plan. Bear it in mind though. Stop above 7340.
Yesterday's low was 7190 and a break of this is likely to see the 7155 area where we have decent daily support. Of course a break of this is bad news for the bulls as it opens up 7100 and maybe as low as 6800 which was showing as support earlier this month.
As you can see from the list below there are quite a few key resistance levels in play, but the 9 point divi might well underpin the bulls today. Also a bit of a relief rally after the decline yesterday, having now seen the US strength. Asia though was a mixed bag though but a ranging FTSE day might play out well today, especially if it hit the key levels.
The Dax is just hitting its 2 hour resistance at 12469 this morning so it will be interesting to see if that drops initially.
Short term I am watching 7275 and 7155 levels for the FTSE 100 for today and tomorrow. Looking ahead to today's data, highlights include UK jobs, German ZEW, US Building Permits, Housing Starts, Industrial Production, APIs, Fed’s Williams, Quarles, Harker and Evans.