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Trump's Speech Doesn't Help Bulls

Published 01/03/2017, 08:25
Updated 14/05/2017, 11:45

Support 7270 7268 7251 7241 7225 7192 7180
Resistance 7281 7300 7317 7324 7343 7425

Off we go with the start of another new month off the back of the first address by President Trump to Congress last night. The speech offered few new proposals, and Trump made no suggestions on how he would pay for his plans, including a replacement of Obamacare, a tax overhaul offering cuts for the middle class, $1 trillion in infrastructure investment and a large increase in defense spending. He did not mention Russia, the federal deficit, banks, financial regulations or college education. Wall Street was unimpressed. Futures on the benchmark U.S. S&P 500 Index, which had been up 0.3 percent going into the speech, pared their gains as the president was speaking to 0.2 percent.

We had a fairly tight range on the FTSE yesterday, spending most of the day at 7250, with a quick spurt up to close the month just before the bell which was soon relinquished. Overnight we have risen again to the 7290 area, and just above the 10 day bianca at 7281.

FTSE 100 Outlook and Prediction
The start of the new month and not too much of a bearish reaction from Trump's speech last night so we should get the usual kick up to start things off as the months new money comes in. We have resistance initially at 7303 then 7324 above that so both these levels might well be worth shorts, though with tight stops. There also wasn't too much in the speech last night to fuel the bulls, so the Trump rally might be tempered a bit.

Support wise, the 7270 area is looking fairly key to start with today, though we are also just at the top of the 10 day bianca channel at 7281. If this 7270 level holds then we should see the 2 resistance levels mentioned above. However, if it breaks then yesterday's lows at 7250 are likely, and then 7225 where we have the bottom of the 10 day bianca as the next support. Below that the recent low at 7192, and a break of that would probably open up a trip to 7100.

I am not feeling overly bullish at the moment and once the new month new money rise (assuming we get one) wears off this morning then we could be on for a dip down towards 7225 or lower - thats what I am thinking at the moment.

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