We saw the FTSE 100 index bounce off two levels overnight, support at 6045 and resistance at 6100. Pre-open the market had dropped back down to 6062 level and the plan of action was to short any pullbacks to key levels marked on my chart. The market raced up to the 6100 level immediately at the open and I waited till it seemed to running out of steam before getting in short with the MACD histogram bars shrinking, indicating a change in momentum.
Well the market rarely does what you think it’ll do and today was another example of that. My bullish bias to the day was put into question fairly early on this morning as the FTSE 100 index failed to hold the 6137 support level. That was the first sign that the market was not quite ready to move on up as quickly as I had first anticipated.
I traded that particular level again and was immediately in the red for about 30 minutes, and just lucky not to have been stopped out. The FTSE recovered and I managed to bag a few points as the FTSE dipped back below the 20EMA and looking rather bearish at the time.
I was out for lunch and by the time I returned the FTSE had broken through the 6137 level despite sitting on it for about an hour. The US session saw further downside with the FTSE retesting the 6100 level several times. I managed to get in and out off the 6100 support level for a few more points and called it a day.
The FTSE stayed above the 6100 level overnight and moved up bullishly pre-open. I suspect that we could see further upside today and I’m quite happy to buy the dips today. I managed to get in at 6141 after price had bounced off a previous support / resistance level, and came back down to re-test the 20MA.
As anticipated it turned out to be a fairly bullish day for the FTSE despite the dip towards the end of the day. I scaled out of my long position gradually, closing out half once I had 20 points in the bag, and the rest another 10 points to the good as the market pulled back following another MACD divergence.
The market seemed to hold around the 6062 level and I managed to get long again with further support from the 20 period moving average. The second trade was closed out for 15 points. After lunch it was a different story as the US markets dragged the FTSE down with the anticipated interest rate rise weighing in heavily.
