Turned into a bit of a bearish one yesterday with a slow drift down across the board, after the bulls failed to build on the initial strength at the star of the day. The FTSE 100 declined from the 7300 level to trigger the long at 7250, but after an initial bounce that fell back down and test 7231 overnight. Actually looks a bit more bearish across the board now with the 2 hour chart on Dax, FTSE 100 and S&P all bearish with resistance at 12475, 7297 and 2756 respectively.
There is another large dividend of 21 points this week on the FTSE 100, which will be applicable tomorrow, and may see the bulls just keep their hand in for the moment. They still need to push above the 7325 resistance area though in the short term, other wise a decline down to the bottom of the 10 day Raff around 7090 looks possible.
FTSE 100 Outlook and Prediction
For today it looks more bearish with the drop in the US futures yesterday, and a general decline across the board. As mentioned above a lot of the 2 hour charts have gone bearish now and the FTSE 100 is showing resistance at the 7297 level. Above this we still have daily resistance at 7328 (the level we dropped off from on Sunday night on the futures), and a decline down towards 7090 still looks possible.
The bounce off the 7250 support yesterday was pretty lacklustre, climbing 10 points before giving it back, so there wasn't much bullish appetite yesterday, despite the initial rise to the 7300 level first thing.
The 30 minute chart is showing a cluster of resistance levels around the 7258 level this morning with the coral now showing a downtrend and the daily pivot is just above these at 7274. Support wise the 200ema on the 30min is first in play at 7254 which may help with the initial kick up towards the 7297 resistance area.
I have put 2 shorts in the trade plan today - you can either treat them as 2 separate trades or fade them in together, with a wider stop on the lower entry. The average entry would be around the 7310 area if you enter both with the stop at 7340 on the 2 of them. I am thinking now that we get a dip down from that 7300 area towards 7220 and maybe lower. I am not totally convinced that we will see the 7090 level this week though but keeping an eye on it.