Stock markets continue to slide or maybe crash | 6920 6880 6800 support | 7030 7050 7200 resistance

Stock markets continue to slide or maybe crash | 6920 6880 6800 support | 7030 7050 7200 resistance

FTSE 100 live outlook prediction analysis for 26th February 2020

European stock markets fell further amid health concerns on the spreading coronavirus and the its impact on the global economy. More deaths and a surge in cases in Iran, Italy, Japan and South Korea has raised the risk of a pandemic. The FTSE 100 index ended the day at its lowest closing level in a year. The FTSE 100 closed at a one-year low today, slumping 1.94pc to 7,017.88 while the wider FTSE 250 closed 1.90pc lower at 20,715.97.  Every sector was firmly in the red, with banks, utilities and travel firms performing particularly badly.

Government Measures

Top U.S. health officials have begun to describe a range of measures the government could take if the outbreak of coronavirus eventually spreads widely in the U.S. They outlined emergency plans that could result in significant disruptions to daily life for some, including school closings, cancellations of sporting events, concerts and business meetings. Similar measures have been taken by other countries facing outbreaks as the virus has begun to pop up in meaningful numbers outside China. While the U.S. has seen a small number of cases and hopes to limit the spread, health officials are preparing as if there will be a pandemic, Nancy Messonnier, director of the CDC’s National Center for Immunization and Respiratory Diseases, said. “It is not a matter of if, but a question of when, this will exactly happen.” The comments undercut President Donald Trump’s upbeat comments on Tuesday that the virus poses little threat to the U.S.

FTSE 100 Outlook | Trading Signals | Forecast | Prediction | Analysis

Are we going to get more of the same today or will we level off a bit, or dare I say it, climb back towards 7000 or higher? Always a bit of a finger in the air when sentiment is so strong, but the S&P has support at the 3130 level and if this can hold (despite last nights brief foray below) we may well see a climb back towards 3200 on that. That would probably filter through to the FTSE 100 as well and a rise towards the pivot at 7030 could be on the cards. However, the back drop is pretty negative still so it will probably take some intervention in the form of stimulus to get the bulls buying again. At the moment the bears are fully in control still.

Breaking below 7070 yesterday doesn’t bode well for the immediate futures, with a potential very bearish move underway down towards 6000 or possibly lower. The rally was unfortunately built on sand over the past few months and the problem with that is that it collapses very quickly. Some of the valuations that were seen in January were a bit crazy – Tesla, Apple, Amazon etc – so a pull back is probably needed anyway. If the virus fears continue or worsen then we will certainly see larger stock market declines.

For today I am looking at 6957 as initial support where we have the fib level, then 6900 below that with the bottom of the 20 day Raff channel here. Should this break then 6870 is the 10 day Raff channel, and a daily support level of 6730 looms into view below that. Will we get another -200 day on the trot on the FTSE though or will we see some stabilisation come in….

If the bulls can have a go today then as mentioned the pivot at 7030 is first up as resistance, though they were rebuffed at 7000 overnight. Above 7030 then 7200 is the 200ema on the 30min and the likely next area that we will see, but as mentioned the bulls will need a helping hand for things to climb that far. The markets are certainly spooked this week about the virus. What’s really spooked the market since last Friday is the revised global outbreak data which shows there have been no cases in South America or Africa. This clearly means those two continents are doing nothing to contain the disease.

So for today, I am thinking that we see a bit ff stability, maybe not a rocket up but equally not another -200 day, Am watching that 3130 S&P level to see if that holds, if it does then we should see a climb towards 3200. If the FTSE can hold 6900 then we may well see a rise towards 7000. We also have the 27 point dividend today which may help the bulls a little bit (but probably not much!).

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