FTSE 100 live outlook prediction analysis for 27th August 2020
Global stock markets hit an all-time high on Wednesday, as a bull market that has seen equities quickly shake off their virus-driven losses showed no signs of slowing. The MSCI All-Country World Index – the broadest gauge of stock markets across developed countries and emerging markets – touched 581.11 near the end of the European session, taking it above February’s peak.
Global stocks have risen more than 50pc from their March lows, reflecting a charge into equities that has been driven by soaring tech valuations, and a paucity of alternative risk options for investors.
Despite the bleak outlook, a string of better-than-expected bursts of economic news have added fuel to the fire in recent weeks. The rally has been far from secular: even as companies such as Apple have chalked up new record highs, sectors such as real estate and transport remain in the doldrums.
Wall Street strategists have been forced to ramp up their expectations for how far markets will rise, as investors defiantly pile into stocks to drive an unprecedented rally. In recent days, signs of progress on vaccines and trade have raised sentiment, with officials from the US and China confirming talks earlier this week.
The FTSE 100 was the black sheep amid a generally positive session for European equities yesterday, closing flat after spending most of the day in the red. The blue-chip index only gained slightly despite thin summer news flows, with several heavyweights such as Diageo, HSBC and AstraZeneca weighing.
Ahead of a reshuffle of London’s main market next month, FTSE Russell said ITV was likely to lose its spot in the FTSE 100 after nine years, with B&M European Retail in pole position for promotion.
Missiles and Sanctions
U.S.-China tensions over the South China Sea escalated on Wednesday with Beijing firing four missiles into the disputed waterway. Separately, the U.S. announced trade and visa restrictions on 24 companies for their efforts to help China “reclaim and militarize disputed outposts” in the disputed waterway. Meanwhile, China says it has made concessions in proposing to let U.S. regulators audit some of its most sensitive companies, and is now calling for direct talks to iron out disagreements. U.S. officials have recently stepped up a push to gain access to audit working papers for Chinese companies that trade in the U.S., that could end up triggering delisting shares — such as those of Alibaba and Baidu — if the request isn’t met. Fang Xinghai, vice chairman of the China Securities Regulatory Commission said he reached out to the U.S. to hold a video or phone meeting, but has yet to get a response.[Bloomberg]
FTSE 100 Outlook | Trading Signals | Forecast | Prediction | Analysis
A rally that pushed global equities to a record stalled Thursday ahead of a speech from Federal Reserve Chair Jerome Powell on a monetary policy framework review. Treasuries edged higher.
Asian stocks traded mixed, with Japan, South Korea and Hong Kong declining, while China posted modest gains and Australia outperformed. U.S. futures dipped while Europe’s were flat. A surge in technology shares earlier pushed the S&P 500 index and the Nasdaq Composite to fresh highs for a fourth straight day.
Next up for traders will be the closely watched Jackson Hole symposium later Thursday, when Powell will speak.
We got a decent bounce from 5990 back to the 6060 level at the end of the day and the 2 hour resistance there yesterday. That level remains as resistance for the moment, but there looks to be a likelihood of a push up towards R1 at 6080 today, if the initial 30min support at 6035 holds.
We of course have Jackson Hole starting today, the spectre of which has probably helped the S&P rise yesterday and push through that 3470 resistance level. Its dropped back a bit from the 3486 level but the bigger resistance remains at 3530 where we have the top of the 10 day Raff channels. The FTSE has certainly been lagging though over recent sessions. Leading the way and not getting ahead of itself or just being stubborn?!
As mentioned initial support is 6035, and then below this we have S1 at 6008 for today, with yesterday’s low at 5990. The 2 hour chart remains bearish though, and with 6060 resistance holding steady overnight we may well see any spikes get sold today. Unless Powell talks it all up of course.
Below 5990 and then I am looking at a slide to test last weeks low at 5949 again, with 5900 below that. Would get things pretty bearish again if we start seeing that lower level, and the bottom of the Raff channels are both around the 5870 level so a bit of a pause here would be likely, before a possible further slide towards 5770.
Above the 6060, we have R1 at 6080 and the key fib here – this level looks to be worth a short if seen, though a move above this will likely get the bulls all excited again, and 6106 (R2) and then possibly Tuesday’s high at 6176 would be the next levels to watch. However, we have the top of the 10 day Raff channel splitting those level with resistance at 6145 – if we see this level then a short here also looks to be worth a go.
So, few levels of note today, watching the S&P and Jackson Hole output today as the main market movers. Seems to have shaken off that US/China news overnight anyway. 6035 6008 main supports, 6060, 6080, 6145 as the main resistance levels. Good luck today.
Recommended Broker
IC Markets – offers market leading pricing and trading conditions by providing clients with True ECN Connectivity; this allows you to trade on institutional grade liquidity from the world’s leading investment banks, hedge funds and dark pool liquidity execution venues. Highly recommended!
Membership and Live Trading
If you would like more detailed analysis for FTSE 100, DAX, Gold and S&P, including the trades that I am looking to take myself, then please join my active members community.
What you get
- Daily Analysis pre market open (sent around 7am each day) for FTSE, DAX, Gold and S&P.
- Daily email pre market includes my trading plan for the day including ORDER levels, with stops and targets/limits
- Telegram live trading room and webinar group membership for discussion and realtime trade updates
Keep up to date with new content, free sign up below
[yikes-mailchimp form=”4″]