Support 6845 6839 6826 6761
Resistance 6895 6924 6972 6978 7034
Decent steady fall on the FTSE 100 yesterday as expected after that Sunday night spike up on the oil news. Needed to trap a few bulls and also finish off the last of the shorters with that spike up. I bet a lot of early Monday morning bulls got burned yesterday. That said, the long from 6895 worked well for a nice quick bounce to bag 30 points, We are nearing "Fed Wednesday" now, where it looks pretty likely that interest rates will be raised, along with some additional tightening of stimulus, in contrast to the ECB.
Mixed performances on Wall Street and Asia overnight sees the FTSE open at the close area from yesterday, around 6885. Its really going to be all eyes on the upcoming economic data. We have daily support today at 6844, so this area may act as the springboard for the Santa Rally, but the bulls need to break 6977 to push higher.
FTSE 100 Outlook and Prediction
As we get nearer to the Fed decision on Wednesday, we will likely see a bit more chop (again). However, for today I am watching 3 main areas - initial resistance at the 6895 area, support at 6845, and then bigger resistance at 6978. If we dip down to 6845 area then I feel that a long here is definitely worth a go, as we have 10 day bianca and 25daily ema support here, for a run back towards 6900. This area may even act as a springboard for the Santa Rally to kick in. Bet there are some bulls willing it to rise now as well. Below 6845 then 6815 is the line in the sand and it will get pretty bearish if it breaks below this.
Resistance wise, we have 6978 on the 2 hour char and the bulls will have to clear this to push higher in the next few sessions. If not, then the Santa Rally probably wont start till next week. We are also probably seeing some pricing in of rate rises to be announced on Wednesday. Prior to that level, we have 6895 on the 30 min, which we are not far off to start with. Whilst it is initial resistance and I think that we might see a reaction there, I think a further test later on today is likely to break through that level. So, its a tentative buy the dip at 6845 really and see what it does.