28th November 2018
Those levels worked perfectly yesterday and the bulls are still pushing up from the 6990 level. There was a bit of a wobble as the bears tried to break it, taking the FTSE 100 down to 6983, but the US and a bit of risk on sentiment helped it rise back above the 7000 level. The S&P has continued to push on and is back at 2690 now.
European stocks closed in the red following yesterday’s bullish trading, driven by fears surrounding the ongoing US-China trade war, Italy’s draft budget deficit and Brexit trade.
President Donald Trump suggested Theresa May’s Brexit agreement could threaten a deal between the UK and the US, which drove the pound down against the dollar and the euro. President Trump also threatened to impose more tariffs on Chinese imports, raising them from 10pc to 25pc on $200bn (£156bn) worth of Chinese goods. The news dampened hopes of a deal being struck at the G20 summit this week.
The FTSE 100 ended the day 13.70 points, or 0.19pc, lower at 7,022.30, while the FTSE 250 closed 58.23 points down, or 0.31pc, at 18,660.89. In the Eurozone, Frankfurt’s DAX 30 index closed 0.36pc lower at 11,313.35 points and the Paris CAC 40 dropped 0.17pc to 4,986.28.
President Donald Trump and China’s Xi Jinping will meet over dinner Saturday evening in Buenos Aires, marking a pivotal moment in the escalating trade war between the world’s two largest economies. Trump is hopeful for a breakthrough with Xi but is ready to impose more tariffs if the upcoming talks don’t yield progress, Larry Kudlow, Trump’s top economic adviser, told reporters Tuesday during a briefing ahead of the Group of 20 meeting in Argentina. The president believes “there is a good possibility that we can make a deal” and he “is open to it,” Kudlow said later Tuesday. Meanwhile, China’s economy slowed for a sixth straight month in November as the ongoing trade war with the U.S. continued to weigh on the outlook for economic growth.
Federal Reserve Vice Chairman Richard Clarida said the central bank’s gradual approach to interest-rate hikes is appropriate as U.S. monetary policy gets closer to its optimal longer-run setting. “As the economy has moved to a neighborhood consistent with the Fed’s dual-mandate objectives, risks have become more symmetric and less skewed to the downside than when the current rate cycle began three years ago’’
FTSE 100 Trading Signals, Forecast and Prediction
After yesterday working so well on the FTSE 100 I am a bit more cautious today as it will be trying to break those levels – 7082 for resistance and 6990 for support. However, it is looking bullish to start with and a rise from an initial dip down towards the pivot at 7035 looks like it might well get bought up. The bulls have fought back to get the price back above the 7000 level and once again will be keen to keep it there.
There is initial resistance at 7055 to start with, which may be the catalyst for an initial drop. Above the 7055 level then we have yesterday’s high at 7084, but also start geeing into resistance at 7091 from the fib, and the top of the two Raff channels around here. If the bulls can break out above the 10 day channel at 7097 then I think we could well be on for a rise towards 7200 and that maybe we are starting to see the early stages of the Santa Rally kicking in. Of course the back drop remains pretty volatile and with oil down 36% over the past 40 sessions, that is weighing on markets. Along with tariffs, FAANGs, sluggish economies etc etc. That said, if we do look to be breaking above 7100 then it will be worth going long.
On the support side, as mentioned I am watching the 7035 area to start with as we have the pivot here, and also the 30min coral at 7032. I am thinking that this may well hold this morning if we dip down and we do see a push back towards the 7100 level. If the bears were to break 7032, then 6992 once again looks to be decent support, with the 2hr coral line here, and also the key fib for today. As per yesterday, if 6980 breaks then I am looking instead at a drop towards 6900.
For today though, it looks positive and buying the dip today looks a decent play. Good luck!
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