A nice start to April with the Dax, FTSE 100 and S&P shorts all making decent points as the markets rallied, then dropped, then rallied again.
Crucially the bulls kept the FTSE 100 above the 7000 level yesterday, and the US bulls managed a brief move above 24000 on the Dow. The S&P has remained above 2600, so there is some early stage bullishness kicking in after Monday's rout. The FTSE bulls need to break 7060 and ideally a close above 7100 to start gaining some upward momentum. I am however still watching the 7120 level for resistance, but if we break above that then I would say that 6850 recent low may be it for the short term. There was a lot of bearishness last week, fear gauge was at 7, so usually a good time to buy!
However, the Asian markets were fairly subdued, failing to take impetus from the rebound on Wall Street yesterday. The ASX 200 dipped and rose, and as long as 5721 holds as support should continue to climb.
FTSE 100 Analysis
Its a bit harder to call on the FTSE today but I am expecting a dip and rise day, and will be watching the support level at 6987 to see if that holds any test this morning. Despite the rise yesterday the bulls havent really pulled that far away from 7000 as yet, and the markets are still quite fearful. However, the S&P has gone more bullish and is showing support at 2595 today so if that holds then the FTSE should rise towards the 7080 and 7120 resistance levels. So an initial dip on the FTSE till the US drags it up later is my thinking.
Support on the FTSE below the 6987 level is at Monday's low at 6955 so the bulls will be very keen to defend that if we were to drop that low. That said I do think they will defend 7000 if seen.
Crucially for the bulls they really need to get it on sooner rather than later, and a break of 7100 is the pretty key, if only to test the 7120 level. A daily close above 7100 is what they will be aiming for and with the end of the tax year tomorrow, there will be some more money coming into the market over the next 2 days, and then more on the 6th. Might just be the catalyst they need, plus the US employment data on Friday, unemployment rate forecast to dip slightly below the latest reading at 4.1%.
I am thinking this weeks path of something along the lines of a rise to 7120 now we have had the initial drop off 7060, then a fall back towards 7000, then a rise past 7120. Watching 2595 on the S&P closely too for support.