24th April 2019
Strong corporate earnings in the US and the jump in oil prices are driving global markets higher yesterday afternoon. The S&P 500 has surpassed its record close of 2,930 points after jumping 0.8pc. The S&P 500 and Nasdaq reached new milestones as Twitter, Lockheed Martin and Hasbro climbed following favorable first-quarter reports, adding to a rally led by the biggest technology companies. Crude also extended its climb as the U.S. tightened the screws on Iran. Saudi Arabia is ready to boost output, but wants to first see a drop in Iranian shipments, people familiar said.
The FTSE 100 has rallied 0.9pc to hit a fresh six-month high, propelled above 7,500 points by oil majors BP and Shell and the pound’s weakness. Tech stocks are lifting US markets after Twitter kicked off this week’s slew of results from Silicon Valley giants by beating analysts’ estimates. The social media platform’s shares have surged 17pc this afternoon, hitting a nine-month high.
Oil prices have rallied to a near six-month high after the US ended waivers that allowed certain countries to avoid sanctions on Iranian crude exports. The Trump administration stoked fears of an oil supply squeeze by confirming that major buyers of Iranian crude exports, including China, India and Japan, will not be exempt from the sanctions next month. Brent crude, the global benchmark oil price, jumped towards $75 per barrel, climbing 3.2pc in a two-day surge.
US Secretary of State Mike Pompeo said that removing the waivers would “deprive the outlaw regime of the funds that it has used to destabilize the Middle East for decades”. There will be no grace period for countries adjusting to the changes as the White House attempts to cut off Tehran’s oil revenue. Donald Trump said that the shortfall in supply will be offset by oil cartel Opec as the price of oil jumped. Saudi Arabia, Iran’s biggest rival in the region, pledged to ramp up crude exports to stop the measures sending prices surging.
FTSE 100 Trading Signals, Forecast and Prediction
Overnight, despite Asia weakness, but fuelled by an optimistic US, we have remained above the 7500 level. That has now become support on the 2 hour chart, but we have a decent looking long level slightly below at 7484 and S1 at 7482. Below this then 7415 is key. As the 30min chart has started to show some weak bearishness we may well see an initial dip down to this level, before a rise towards the key resistance at the 7561 level. We also have a fib here at 7558.
As such, I am thinking that the bulls might see a bit of a stutter at this 7560 area, as we also have the top of the 10 day Raff channel at the 7569 level, and R2 here. So there are a few levels all lining up with similar levels. Knowing which ones are key remains the challenge!
The daily trends are still firmly up for the moment, and the bears haven’t really made much of their presence felt at the 7510 area which suggests that we should see further upside. The rise yesterday was helped by oil as prices rose, and today we may well see the bulls try and build on those foundations. The slight issue is that the RSI remains above 70 (72 currently) and the fear gauge is stating to get into extreme greed territory (75/100 currently). As such once this starts happening the buying appetite can diminish at some point soon. Whilst calling a top (or bottom) is usually pretty hard, it pays to be aware of when we are nearing tops and bottoms. US GDP is also out on Friday, and earnings continue this week. Good luck today.
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