The bulls tried to go for the 7670 yesterday after managing to push through the 7630 resistance area, however they were dragged back by the bears and overnight we have dipped back below the 7600 level. Boris managed to survive the vote of no confidence as expected, though is now looking weaker so only a matter of time… The Prime Minister secured the support of 211 Tories against 148 rebels, prompting him to declare that it was time to “move on”.
With the overnight weakness we are starting with a slightly more bearish outlook and we may well get the usual bear Tuesday with shorting the rallies looking viable for today. Initial resistance is at the 7610 level where we have the daily pivot and the red 30m coral to start with. Above this then the bulls will be looking to target yesterday’s high at 7647, and then the 7670 resistance level above that is still relevant.
If we get a decent dip today we may well see the bulls appear, especially if we dip down to the 25ema daily support level at 7515 currently. That level is also just below the S2 level so should hold. Below that then the daily coral is also green (showing an uptrend) with 7480 support. Not expecting that low today, even though the S&P/ASX 200 had a significant drop today.
Initial support this morning is at the 7560 level where we have the key fib and the S1 level at 7565. If this holds then we may well get an initial rise to start the day off then the bigger drop from the 7610 area.
The S&P500 will be keen to defend the 4085 level that it’s testing as I write this, and that should get a rise towards the 4125 level where we have the 30m coral and the 30m 200ema. A break lower will likely see 4071 with S2 here, and again, we should see the bulls defend any drop. Was a bit of a stop hurting spike up to 4170 yesterday prior to this drop – chop ahead of FOMC next Wednesday and more CPI on Friday. Interesting news on Bloomberg that we may be past peak inflation though, even though oil and energy prices continue to rise. Below 4071 then 4035 is next up with the bottom of the 10d Raff here, and also S3.
If the bulls break 4125 though then we should see a rise towards 4152 where we have the key fib.
Bear Tuesday On The Cards As Oil Climbs