*Taking a look at the FTSE 100 index and my trade open positions*
Welcome back to the blog! In this post I am going to show you the current price chart for the FTSE100 index and talk you through my trade management of my various short positions that are open. I will also show you an update on my Spot Gold long trade and what I think will happen next.
Let’s get right in to it and look at the current daily price chart for the FTSE.
One of the main technical confluences for my continued short bias has been that price is making lower highs and bouncing off of the daily 50EMA. Once again, this continued to occur last week with another lower high forming and price using the 50EMA as a dynamic resistance.
Today has seen a large sell-off on the FTSE and price is now back at the 5800 support zone and retesting it with some pressure. If this support zone breaks then we could see another lower low made and confirmation that the trend is bearish.
As before, the 50EMA has remained below the 200EMA on the daily timeframe chart and the “recovery” is clearly failing and starting to look more like a double “dip” with two clear bottoms.
The intraday charts (4hr and 1hr) show a more choppy or messy image of what has been happening over the past few days and weeks but what you can see is that really, the price trend remains bearish. The 4hr chart has the 50EMA trading below the 200EMA like the daily and price is failing to break previous highs. On the 1hr chart, you can see todays bearish momentum where almost immediately from the UK Markets open at 8am, sellers took control and pushed price right down to the 5800 support zone.
As you can see, a lot rests on the 5800 price support zone right now and I believe a daily close below this level will see the further downside come soon. The fundamentals and economic situation support my bearish bias and have done for some time, it is now up to the market participants to make it happen.
As I have previously mentioned last week, I actually explained my reasonings for entering short positions on the FTSE100 index and showed my technical analysis in a 10 minute video which is now on YouTube. Click on the video below to view it.
Spot Gold – long position.
Gold has been consolidating sideways for some time now with the last 4 weeks keeping price within a range of around $80 per ounce ($1850 – $1930). As of today it seems price is actually trying to push its way up and breakout of this range which I believe would be a very good sign for buyers to come back in to the market.
Gold is seeing two main influences on price this year. The first is the coronavirus pandemic seeing buyers come in to gold from other assets and investments because historically, it has been seen as a less risky investment. The second influence if from the U.S Dollar (and other currencies) getting weaker vs the precious metal thanks to increased QE and spending on fiscal stimulus and economic support. Gold can be treated as a currency as well as a commodity and if the counter currency (in my case, USD) is weakening then the value of gold will appreciate.
I think a strong break above the $1930 per ounce level and a positive bullish weekly candle closure should see more buyers come back in to Gold and push it back up to this years highs around $2080 per ounce and higher in to next year.
I apologise for writing such a short blog post today but I am extremely busy this week. On Friday I plan to publish a post which will contain my complete technical and fundamental analysis of an FX currency pair which I am looking at trading. Keep an eye out for that one.
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