FTSE100 dip and rise today

The S&P 500 held the 4215 support level twice yesterday and we got the rise as mentioned to 4256, 1 shy of the 4257 resistance. That helped consolidate the FTSE100 rise from Monday, as it spent most of the day hovering around the 7080 level! Overnight we have have been nudging the 7100 level and the bulls will be keen to break this but we have initial resistance from R1 here at 7102. 

Above this 7122 is R2 and also the key fib at 7125 - as such should we get to this higher level we could see a stutter here.  Above that 7143 is R3 and should we start pushing that high today then we should be back on the path towards 7200.

However, I fancy a dip down first just to cool off the S&P rise, and that to be reflected on the FTSE100 with a dip down to the 7040 2 hour support level. The fact that the FTSE100 didn't follow the S&P up yesterday as it added 50 points suggests that it wasn't convinced. Ergo a dip and then rise may well play out today. The S&P could do with a drop down to test its 2h supports at the 4206 and 4209 levels and as long as they hold then the bulls remain in charge. 

We are getting nearer to the end of June seasonal weakness period though, but another leg higher is still possible if the S&P wanted to test its upper resistance - 4280 for the top of the 10d Raff and 4330 for the 20day - before the summer kicks in. 

For the FTSE 100 bears, if we do slide initially then 7062 is the first support level where we have S1 and we could see this hold initially, before a bit more downwards pressure to the 2h supports mentioned, and also S2 sitting at 7040. I would really want to see this hold as a break of 7040 opens up S3 at 7020, but also more crucially a possible break below 7000. The bottom of the 20d Raff is at 6950 and coincides with Fridays low.

I don't think we will be getting down there today though, and if we do dip and rise today with 7040 holding, I am more inclined to go with a bullish Thursday and Friday to end the week. 

The Fed are still saying that they think inflation pressures are transitory. Interestingly the price of Lumber - which front ran the increase in costs generally, has corrected sharply down, so may well be also leading the way on that. They definitely don't want rampant inflation, though the long term plan is probably still partly to inflate the debt away following the Covid driven debt mountain! 

So, dip and rise today I am thinking, watch 7040, 4210, and 15540 as the main supports. Good luck today.