Support 7285 7280 7263 7261 7258 7238
Resistance 7309 7312 7321 7326 7334 7365
After the initial spike down on the FTSE to 7252 and a test of the 10 day bianca channel there, we bounced back up to the 7280 area and stayed there for most of the day in what was a pretty lacklustre day for the FTSE 100, with a slight drop to 7260 and bounce at the close. Today we have a large 28 point dividend to be applied so many were wary about going to big short ahead of that. We had the bull Monday and a sort of bear Tuesday pattern again this week, though the bulls definitely have the upper hand at the moment.
In Janet Yellen's speech last night, she said more interest-rate increases will be appropriate if the U.S. economy meets the central bank’s outlook of gradually rising inflation and tightening labor markets.Yellen’s semi-annual report on monetary policy is her first since Donald Trump became president, vowing to boost U.S. growth, which could push the Federal Open Market Committee to pick up the pace of rate hikes if such steps fan higher inflation. She reiterated that falling behind on inflation could harm to the economy and possibly cut short the expansion. Yellen gave no indication of the timing of the next hike in her prepared remarks. Investors see about a 34 percent chance of an increase at the next meeting of the FOMC on March 14-15, up from about 30 percent before she spoke.
FTSE 100 Outlook and Prediction
For today we are pretty likely to see a rise towards the close as the divi hunters come in so going long around 15:00 this afternoon usually works out well as a way to benefit. You want to close before the bell though, especially if on IG, which applies the divi at 16:30. Rather than try and get the divi itself you want to just get the rise before it.
Initially we have resistance at 7312 to start with and the bulls have just tested 7300 while I have been writing this. If we get a pop up to here then technically we should see a bit of a dip down, which I think will get to the daily pivot at 7280, but might dip to test the 10 day bianca again at 7261. We have a few other supports there - S1 and the 200ema - so may hold that level as support.
If the bulls were able to break 7321 today then we should get a rise to the next area of interest which is 7365 though with the daily RSI back above 70 and with the US markets still racing ahead I am thinking that we may well start to see some profit taking soon. Mind you, there was always the possibility of 22000 on the Dow for 2017, i just thought it might come later in the year!
So for today, fairly simple plan really, long off any initial dip in a similar pattern to yesterday.