FTSE 100 pulls back initially on Monday to find buyers

The FTSE 100 pulled back a bit during the open on Monday, testing the 7700 level. That level offered a bit of support and has now sent buyers back into the market. That area should offer a bit of a short-term floor, but I think that overall we are looking at a situation where the buyers are jumping in and trying to take advantage of value. I think longer term the market will probably reach towards the 7750 level, and then break above there to reach towards the 7800 level, and longer-term of the 8000 handle. I believe that buying the dips continues to be the case, and I believe that value hunters continue to come in and tried to push to the upside. If we break down below the 7650 level, then I think we could unwind a bit. I believe that the absolute “floor” in the uptrend is at the 7500 level, so I don’t have any interest in shortening until we break down below that level.

I believe that the Bank of England should continue to be as accommodative as possible, although eventually we will have to raise interest rates. However, it’s going to be slow and steady, so that should continue to offer a bit of support to this market. I think that the market has enough support underneath the continue to find reasons to go long, but I think it could be a bit volatile. I would add slowly as we go forward.

FTSE 100 Video 15.05.18