The FTSE behaved somewhat similar to yesterday in that it sold off from late morning onwards. Having missed out yesterday I was keen to get on the right side of the market and shorted the FTSE as it came back up to retest the previous support level at 6196. At the same time, the MACD histogram looked like it was starting to run out of steam and a doji candle had formed on the 5 minute chart. I closed out half the position at 6175 and left the remainder to run to 6165 (closed the position after the bullish pin-bar formed).

By the time the markets opened in the US the FTSE was heading back up and I didn’t manage to place any further trades – the FTSE did seem to be oversold at the time, especially on the hourly chart. There was also a lot of air on my charts and no clear support or resistance levels on the higher timeframes, so I decided to stay out of the market for the rest of the afternoon.

The FTSE had sold off steadily overnight at the open I was hoping to get short off any bounce up to any previous levels of support and resistance. However, ended up taking a speculative long as the FTSE came off the lower Bollinger band with the MACD histogram bars rising indicating a change in momentum. Managed to scalp a few points off that trade.

The market has since reversed off the overnight support level at 6218, creating a classic pin-bar on the 5 minute chart, and proceeded to fall through yesterdays lows of 6208, as well as the 6200 level.

Quick round up of todays action with the help of the updated chart below. The FTSE traded within the range anticipated for most of the morning, then sold off in the afternoon and broke though the support level at 6249. I took a small long as price hit the support level and managed to scalp a few points.

In hindsight I should have traded off the MACD divergence signal and switched my bias – apart from the early rise this morning the market has been trading under the 20 SMA (simple moving average) and I would have done better getting short this afternoon.

On the daily and hourly charts the break in market structure is quite clear, so I’m expecting further weakness for the rest of the week.

Just looking at the charts below, here were my observations at the open:

• On the daily chart the market was trading below the 20MA, although we had seen the market push up from previous support on Friday, and potentially this looks like a good area to bounce up from
• On the hourly chart the FTSE seems to be trading in an upwards sloping channel, and quickly dipped back down to tested the bottom of that channel at the open
• On the 5 minute chart, the market had been trading in a tight range overnight, then headed lower and bounced off support at approx. 6249 (one of the pink lines drawn on the chart prior to the open).

As I look at the chart now, price has come off an intraday resistance level at 6283 (a red line on the chart that was drawn a few minutes ago). I think that we could be range-bound between the 6249 & 6283 levels for most of the day.

Looking at my economic calendar, BOE Governor Mark Carney is scheduled to speak this afternoon at 3pm, so expect some volatility at the end of the day.