We got the dividend fuelled rise for most of the day yesterday unfortunately nearing the 7275 resistance area just as we approached the bell so not a good time to short the cash market, hence moving the order. Inevitably it pushed a bit higher to 7290 before the bears reappeared and we are now down at 7210 and looking like we will head lower. Was decent resistance in that area really and if it hadn't been for the dividend, was a good shorting area. The Fed minutes reignited the markets worries about rates increasing quickly and sooner, leading to a rise in bond yields and a sell off on the Dow and S&P. The Fed was actually upbeat about the economy but rate rises overshadowed everything else and was the focus of attention.
The S&P also managed to reach its 2 hour resistance at 2740 before dropping back significantly. Gold also managed to hit the 1335 resistance before dropping off.
With the FTSE 100 now below the 7220 support and the charts still bearish we are more than likely going to drop down towards 7150 and possibly 7090.
At Wednesday's Inflation Report Hearing, Bank of England Governor Mark Carney said that interest rates are likely to rise three times in the next three years due to 'excess demand' in the UK economy.
FTSE 100 Outlook and Prediction
With the drop off the resistance level yesterday and looking like it will probably gather a bit more momentum I am still favouring shorting the rallies. The longer time-frame charts are still bearish. There is decent looking 30min resistance at the 7235 area so an initial short here looks worth a go as with the market moving below 7220 now we should be on for a trip down towards 7150, and possibly the lower support at 7090.
For the bulls there is still a chance that we get a rise towards 7328 (Sunday out of hours high) but it looks a long way away at the moment as interest rate speculation continues to drive the price. The bulls will be keen to push above the 7240 level today anyway, while the bears are likely to push lower. The ASX 200 wasn't actually that weak during the Thursday session, with a slow rise to the pivot, and I am thinking that we may well see a similar sort of move on the FTSE 100.
Brexit continues to rumble on, with May and the cabinet continuing to clash over the way forward.
The daily chart remains bearish with resistance higher up at 7348, 7380 and possibly even 7408, so if we did have a stronger rise to end the week then 7350 area looks a decent swing short area with a stop above 7380.
So, rise and dip I am thinking today.