Jump to content

FTSE100 - Daily Analysis


Recommended Posts

Hi Rich88,


I see it a bit differently.  I see a classic small 1-5 downward move, which should hopefully be followed by an A-B-C retrace before a further bigger move down.  We are at a resistance point just now but I can see another leg down to maybe 2210-20 (strong support/resistance zone - more easily seen on the 4 hourly chart).  Mining rather than Oil seems to be the main driver down just now and I believe Oil will move up another leg to about 4700 (Brent) before deciding its next move, likely down).


So net my thinking is further softness this morning to complete that 1-5 wave down then a retrace, possibly triggered by the US markets before a major drop.


Link to comment
  • Replies 263
  • Created
  • Last Reply

Recent price action makes me think that the wave 1 may already have completed and now the market may be approaching completion of wave 2 retrace.  There are signs of a turn (high Stochastic/RSI after a Neg Mom Div) and a touch and rebound away from the 38% Fib, near some strong resistance.  The EW count works 1-5 down, followed by an A-B-C back up.  In addition the market is finding resistance on a decent set of parallel tramlines with a potential Tramline break and kiss back set up.


There are similar set ups on the US markets and Dax but not the Russell, there the market is at a potential top.


Link to comment

Lower low achieved on FTSE 100 (and Dax but the FTSE is the important one).  Watch US markets for same.  This now completes the 1-5 down followed by A-B-C retrace up and turn I was tracking.  It took the BoJ overnight to trigger it but c'est la vie.  Good shorting opportunity at the 62% and 50% fibs on the main indices overnight.  If you didn't get in at those points then look for the next retrace.  This current move should be a Wave 3 but can put in a quick mini wave 1-2 retrace early in the move.


Once again the market has offered up a nice tramline break and multiple kiss back on 2 tramlines, this proved them as valid for me.  now with the new lower low the bear is on.


Link to comment

Whew!  Is anyone else feeling a little neck-sore with whiplash on these stock markets?  Quite a day of volatile reversals yesterday, especially on US markets.  Now I don't know about you but that is suggestive of uncertainty to me and an indication of a trend change (basically a struggle raging between Bulls and Bears and you don't want to get caught up in that!  Sheep!)


I was feeling like the move down was strong until the US opened and now I am suffering the same indecision as the market so I went back to my FTSE analysis (let's leave the US for now) to see what I could see.  The big issue for me was putting the recent strong rally into the contest of the overall picture.  It is not a classic move but I think I have teased out a structure that makes sense (watch out for Bearish Bias here...)


The rally up from Feb is in an A-B-C with 1-5 count on both Wave A and C.  The B is not deep, which is suggestive of a strong rally but experienced commentators have said that a Bear counter rally can seem stronger than a Bull rally so...  Neg Mom Div is strong on the Daily and Stochastic and RSI came out of over bought at the 21 Apr peak.


On the Hourly I have a 1-5 down to a small wave 1 and we have just had the A-B-C back up to Wave 2 (green labels).  There was strong Neg Mom Div at the 21 Apr turn that is still in operation I think.  2 sets of tramline breaks and Kiss backs and now a Wave 1-2 move (brown labels) yesterday with turn at 88.6% Fib and resistance line.  Unlike the US the European markets did not make a new lower low (irritating as that would have clinched it for me) and this got me thinking about an A-B-C but I think this is a red herring and prefer the small scale 1-2 (Grey labels) as a set up.  So I am forecasting a turn back down at the Fib 50% or 62% off yesterdays second turn (Brown w2 - I haven't shown the Fib on the chart as I have it on my 15mins) and somewhere inside the resistance zone described by the red lines (plus or minus a bit).  I suppose we cannot rule out a very strong retrace, which has been a feature of the current market (regularly making 76% and even 88% fibs).  Watch and take your best guess on turning point but turn it will I believe.  Another good point to enter short would be a break of the lower tramline.


anyone see it differently?



Link to comment

You have to keep an eye on Ft at the moment, what with all the terror threats around and Brexit issue, just look when Brussels terror happened, the FT went down a fair bit when the news came out, 

Link to comment

 the challenge is, does Gold drive the stock markets or the other way around?  Sometimes they move in opposition and sometimes they move in concert, hard to know which in advance.  Best to analyse each independently and only then look for any potential correlation but don't bank on it happening all the time.

Link to comment

Not sure I agree , I meant I get you but I think such things generally inject only short term volatility.  Important if you are a day trader but what can you do with this?  Once the news hits the market reacts and the pros react much faster than we can so...  Only a major catastrophe can change market sentiment in my view, I mean why would a bomb in Belgium impact global markets?

Link to comment

EU ref is a distraction for me and still too far off to worry about.  By June 23 I expect global forces to have a firm grip of markets (my view to the bearish side but who really knows).  This is a much bigger factor than the EU Ref.

Link to comment

Wow when technical analysis works it really works!  And when it doesn't I have to assume I have got it wrong rather than the method is wrong as it usually becomes apparent where I went wrong after the fact.  My only error on this market of late was expect the turn too soon, should have known that Fib 76% or 88% was more likely in this market.  Not sure that will hold true from here on in but that is a topic for another day.


I just wanted to share this chart with you guys.  Since the ending Triangle break we have had 3 tramline breaks and kiss backs (the middle one being a double kiss).  The EW count works well with a small 1-5 down to Green 1 followed by a retrace to the 50% fib and resistance line and then another 1-2 of wave 3 (2 turns in the resistance zone before a straight strong drop to thee next tram.  These trams are proving very accurate and one might be forgiven for expecting yet another break and kiss back but I don't think so.  Once the Wave 3 gets going it will not retrace very strongly and the current bounce off the lowest tram is likely to be the last for a while so this time I an anticipating a fast drop through the tram and away down.  The break of the lowest tram is a good Short point in my view.


Link to comment

A little sideways drift early this morning on the DAX, which can't get past my tramline to the upside (Bearish indicator?).  The FTSE 100 did spike a new lower low, showing the direction of travel?  I think the FTSE has shown us that these markets have entered a Wave 3 of 3 down, which should be a strong move down.  If that happens we would then get a retrace (relief) rally before the final move to conclude this wave before a stronger rally back up (NFP triggered I wonder?)


Link to comment

 can you explain your reasoning?  Is it just support line?


For me there is a clear congestion zone and 2050 is about the bottom of it so if the support area holds then a rally from here is possible, how long and how strong I couldn't say just yet.  There is Pos Mom Div building but not yet confirmed and NFP could be the catalyst for a rally for sure but also could be the reverse and a catalyst for a further drop.  For me the US markets have not yet dropped sufficiently in this move, could they be due another drop?  Could this coincide with another rally leg in USD?


It is all too unclear to make a clear trading decision just now, I will be clearing anything too close to the congestion zone and waiting for a confirmed breakout after NFP volaitility settles into a set direction before entering again and stop protecting my higher shorts for profit (got to keep ticking over).

Link to comment

I'm still quite bullish about the market at the mo. Obviously we need to get non farms out of the way first, but I don't think this will decide the mid term direction. Worst case sinario would be a boring figure (200ish) lower could confirm the bearish bias. My thinking a bounce in equities/oil for now then a retrace at the end of the month moving into June. Brexit would help this.

Link to comment

The bounce is what, to new highs or just a retrace and then drop?  I think you showed the latter on one of your charts, which I would read as a Bearish view (short term bullish maybe) is that right?  I don't see Brexit as a factor (maybe only for GBP temporarily).  the FTSE100 is much more influenced by global economic factors, exchange rates and commodity prices than local politics in my view.

Link to comment

The FTSE 100, is mostly dominated heavily by mining and oil companies, therefore if those sectors are down, it will heavily impact on the FTSE100. In relation to the US indices, their has been heavy skepticism of the value of SP500 and DOW jones, being heavily overvalued. However i still advocate that trends can only last so long and therefore always best to revisit those weekly, montly charts. The FTSE100 is overall on a downtrend and it will take one almight push through the daily tramline to see a complete opposite scenario.

ftse 100 2h.pngftse100 daily.png

Link to comment

I agree, although I do anticipate a significant retrace before a longer drop.  The bigger picture tramline pair you have drawn allows lots of room for such a retrace, which would be EW1-2 and could go back quite a way.


My strategy is to swing trade this move down and then back up and then seek a longer term set of Shorts for a massive wave 3 to come, while guarding against the alternative scenario of new all time highs, which can't be fully ruled out even if we think it not very likely.

Link to comment

Because current price action is bang on the tramline and is now heading north, as you say would be the opportunity to just sit and wait for this opportunity, unless you have already joined earlier in the week of course, but other wise good opportunity to grab this indice by the horns when it hits the 50% retracement level of which if confirmed W2 complete, W3 to follow.

Link to comment

When it turns yes but I am not yet sure we have a Wave 1 (Daily) completed just yet.  It could be but I'd have expected a longer drop on US markets in particular.  I would need to see a tramline break and confirmed bounce off current congestion zone to be confident in the W1 turn.  If the markets move back down through the congestion zone a further drop is firmly on the cards before any retrace.

Link to comment

FTSE100 has made a small scale retrace to my tramline for a Kiss but is now closed for the weekend so over to the US for the remainder of the evening to decide whether this is a larger scale turning point or just NFP driven small scale retrace.


Lots of volatility still out there and too soon to call the post NFP trend direction for me.


Link to comment


This topic is now archived and is closed to further replies.

  • General Statistics

    • Total Topics
    • Total Posts
    • Total Members
    • Most Online
      10/06/21 10:53

    Newest Member
    Joined 24/05/22 14:22
  • Posts

    • GOLD OUTLOOK U.S. rates, dollar and geopolitics sustain gold. $1850 in focus! IG client sentiment: Mixed.   XAU/USD FUNDAMENTAL BACKDROP Gold is in a great space at the moment with almost all supporting markers favoring the yellow metal. U.S. 10-year TIPS (see graphic below) has plateaued giving added impetus to gold upside because of the reduced cost of holding gold – traditionally an inverse relationship. U.S. 10-YEAR TIPS BREAKEVEN RATE Source: Refinitiv From the dollar perspective, we have seen a drop off in the USD frenzy of late due to a combination of factors including a more hawkish ECB, an overstretched dollar and an easing in the Chinese economy (COVID-19). Finally, talks around an impending Russian oil embargo may come sooner than expected according to German Finance Minister Lindner who anticipates a concrete decision by the week’s end. While President Joe Biden’s address regarding intervention should China invade Taiwan has added to bullions safe haven allure. On the economic calendar there are a few dollar influencing releases today including PMI’s and housing sales – look out for changes in interest rate markets! Later this evening , we look forward to Fed Chair Jerome Powell’s speech for guidance on the U.S. economy and the Fed’s outlook. ECONOMIC CALENDAR Source: DailyFX Economic Calendar TECHNICAL ANALYSIS GOLD PRICE DAILY CHART Chart prepared by Warren Venketas, IG Technically, gold price action has confirmed its place above the 1850.00 psychological level after yesterday’s daily candle close above this resistance zone. I would be hesitant to favor a long preference just yet, leaving today’s candle close that much more important. This close coincides with the 200-day SMA (grey), and a strong push higher could establish the indicator as support going forward. Resistance levels: 1900.00 50-day EMA (blue)/100-day EMA (yellow) Support levels: 1850.00/200-day SMA 1832.51 (23.6% Fibonacci) 1800.00 IG CLIENT SENTIMENT: CAUTIOUS IGCS shows retail traders are currently distinctly LONG on gold, with 86% of traders currently holding long positions (as of this writing). At DailyFX we typically take a contrarian view to crowd sentiment however, due to recent changes in long and short positioning we arrive at a mixed disposition.     May 24, 2022 | DailyFX Warren Venketas, Analyst
    • BTC/USD TECHNICAL OUTLOOK: Trading around big support under 30k The longer it trades here the more bearish it looks On May 12 BTC/USD sank through a big macro level of support and reversed powerfully for the day to close back above it. This was initially viewed as a positive, at least in the near-term. However, if BTC continues to tread water around 28600 the more likely it is to break. Whenever you see price sit at a level after a large move, whether it be on the downside or topside, the more likely it is that the level is about to break and a continuation of the trend develop. Given the significance of the support level at hand, a level that runs back to the beginning of 2021, and given the powerful reversal that came on the break earlier in the month, a breakdown here is seen as likely to send BTC/USD much lower. Overall, the outlook for BTC/USD has been a bearish one, and with risk assets in general rolling downhill, it appears likely we see cryptos continue to get pummeled. At some point the hard selling is anticipated to turn into a drift lower as residual selling and a lack of buying interest see prices deflate at a persistent rate. But the latter behavior isn’t expected until more pain is experienced. A break below 28600 will have the cycle low at 25401 in focus. A breakdown beneath that point is seen as having the 2017 high in play at 19666. This would be another significant point to watch BTC try and hold. It may hold initially, but more downside from there is anticipated as the selling turns from aggressive to a long slow drift. For now, while the outlook is bearish we must respect support as support until broken. If we see BTC/USD pop hard from here that won’t get it out of the woods, but does save it for the time-being. Turning things around is going to require a significant shift in sentiment that doesn’t appear to be anywhere on the horizon.     BTC/USD DAILY CHART BTC/USD Chart by TradingView Resources for Forex Traders Whether you are a new or experienced trader, we have several resources available to help you; indicator for tracking trader sentiment, quarterly trading forecasts, analytical and educational webinars held daily, trading guides to help you improve trading performance, and one specifically for those who are new to forex. ---Written by Paul Robinson, Market Analyst. DailyFX  |   24th May 2022
    • POUND STERLING (GBP) ANALYSIS UK PMI (Flash) data for May revealed the slowest rise in business activity since the global recovery Services sector strained by the fastest rise in operating expenses since the index began Tracking the chart response for GBP/USD, EUR/GBO and GBP/JPY   HIGHLIGHTS OF THE S&P GLOBAL UK PMI (FLASH) REPORT FOR MAY 2022: UK private sector firms signalled a sharp slowdown in business activity growth during May as escalating inflationary pressures and heightened geopolitical uncertainty acted as constraints on customer demand. Latest data indicated the fastest rise in operating expenses since this index began in 1998 The report showed the slowest rise in business activity since the current phase of recovery began in March 2021 The actual figure represents a 6.4 index point drop – 4th largest monthly decline on record Customize and filter live economic data via our DaliyFX economic calendar MARKET REACTION ACROSS SELECTED STERLING CROSSES In the aftermath of the negative surprise, the already weakened pound lost ground to the US dollar. Over a long term horizon, the pound has weakened against the dollar as the Fed accelerated rate hiking plans to combat inflation. GBP/USD 5-Minute Chart Source: TradingView, prepared by Richard Snow Over the shorter term, a much softer dollar has allowed the pound to recover some of its losses, but the shocking PMI release has halted the recent sterling appreciation. 1.2400 becomes a level of interest if it is to halt further bearish price action. GBP/USD Daily Chart Source: TradingView, prepared by Richard Snow The euro has emerged as a surprising beneficiary of the sterling sell-off given. However, euro sentiment has turned hawkish recently as a number of ECB officials have communicated a preference for a July rate hike – with one member in particular not ruling out a 50 bps hike. In addition, the Bank of England foresees an economic contraction on the horizon for the UK while the ECB has played down recessionary risks for the region as despite struggling to distance themselves from Russian oil and gas purchases. 0.8595/0.8600 remains a key level if the recent EUR/GBP rise is to continue. EUR/GBP Daily Chart Source: TradingView, prepared by Richard Snow The GBP/JPY chart declined by around 200 pips, or around 1.25%, in the aftermath of the PMI print. GBP/JPY 5-Minute Chart Source: TradingView, prepared by Richard Snow   --- Written by Richard Snow for DailyFX.com. 24th May 2022
  • Create New...