The FTSE 100 was pretty flat during Mondays session, with just a 20 point range. The 7665 level held (gap from Friday) for a small rally to 7680 but that was about it for the day. The Dax and S&P longs that we had on fared better, the Dax especially so.
Overnight we have seen a sharp sell off across the board though, as a sell-off in government bonds accelerated and traders are taking profit after a strong January and start to the year. The S&P has broken below the daily channel for the first time in a long time and as such we may see a more sustained sell off there to 2782ish. I'm still watching the FTSE 100 for support at the 7580 level as mentioned yesterday.
For today it's looking like a pretty weak start to the day following the weakness overnight in Asia. The FTSE 100 futures have bounced off the 20 day Raff channel bottom at 7595 so far. There is daily support at 7606, but the main attraction appears to be the 7570/7580 area where there are some decent supports. If the bears were to break below this level then the 200ema on the daily chart at 7438 is the next major support area.
Donald Trump is delivering his State of the Union address this evening so may well inject some bullishness into the US markets then.
If the bulls can defend the 7600, or even the 7570 level then a bit of bullishness could creep back in for the second part of the week. They will be looking for a rise towards 7720 or higher. However, there is resistance at 7640 in the way first, as following the overnight weakness, and lack of strength yesterday, the 2 hour chart has gone bearish and has resistance here. Above this on the 30min chart there are several areas at 7670 that are worth a short from, as you can see in the list of resistance levels below.
Looks like we are going to be on for a bear Tuesday!