I really wanted the bulls to do more with that long from 6791 yesterday but it was very half hearted. Maybe they thought it was Monday? Perhaps, today will therefore be bull Tuesday a day late?
Either way, the FTSE 100 was pretty weak yesterday and overnight with 6835 not breaking and a slow decline to the support. 6770 is the line in the sand this morning that the bulls will need to defend.
With Gold still rising (albeit slowly) maybe we are seeing the indices topping off and we will start to get the declines over the next few months? Looking at the daily Raff channels the 20 day could be in play if 6770 breaks, which offers support at 6756 area.
The media are still talking about the housing bubble, and in fact its the lead story on the Telegraph. And only last week Dale at the BOE was saying there is no bubble in the housing market (the biggest sign of all that there probably is!).
FTSE Outlook
The FTSE 100 is starting to look a bit more bearish with the bulls failing to break 6835 yesterday and the media still hyping up buying stocks which is always a warning sign. There is also a rush of M&A activity and IPOs - which often take place at market highs.
Therefore, I am in short the rallies mode for the time being and am more comfortable going short off the resistance levels mentioned. For today, we have initial support at 6770, and the pivot at 6804 - so we may see an early rise as we are virtually on that support.
Resistance wise, above the pivot we have 6816 then 6837 and 6850. If the support breaks then 6755, 6684 and 6650 are the next supports, the last two being a lot lower!
With my slightly tongue in cheek comment above about today being bull Tuesday a day late, it will be interesting to see if the supports do hold - 6770 and 6756. If they don't then we should get some strong downside momentum going over the next few weeks.
The 30 minute chart looks interesting as we are just tracking the top of a declining channel but about to encounter the bottom of the rising one at 6753 (coinciding with the 20 day Raff). We are also slightly below the 10 day Bianca (support at 6791) so there is still hope for the bulls to have one last little push.
As such, I'll go long off the 6770 and 6756 areas for that last bounce but will be preferring the shorts at 6816, 6837 and 6850.
Daily Raff Channels
Bianca Trends
Gold
Gold is encountering a bit of resistance on the 30minute chart at this 1312 area so could well experience a dip down to 1307/1305 before a bounce back. Might well tally with a rise and then dip in the indices.
I have put a possible route for today with the arrows below. It is near the top of the 30 minute channel you can see in the chart. That said, the EMAs are just starting to cross so we could be about to experience a push up again on gold though I do favour the little dip first. Longs at 1301 might be fruitful if it dipped that low.
S&P
Support is 1865 today and 1857 below which is the area of the two Raff channels on the daily. If the S&P 500 goes really pear shaped for the bulls then 1847 is below that as support. Note the bullish side 1885 is resistance again, a break of which would likely see 1900 and possibly that 1919 level I have mentioned before.
As with the FTSE it does feel like there is some negativity creeping in. As with the FTSE probably a short the rallies stance is the best bet for the medium term.
DAX
The daily pivot for the DAX is 9493 so any rise is likely to encounter some resistance there today. It iss just above its 10 day Raff channel, so there could be some support at the 9420. The Russia/Ukraine situation is weighing heavily on the Germans, and they have even gone as far to warn of a full on war and for people in the East to move!
If the pivot were to break then the next resistance level is 9550. Support wise, if the 10 day Raff channel breaks is 9388, so worthy of a possible long there.