Technical analysis for FTSE 100 for 4th September 2024
The UK's benchmark FTSE 100 tumbled on Tuesday to the lowest levels in over a week, hurt by a steep sell-off in commodity-linked stocks over lower metal and crude prices.
The blue-chip FTSE 100 index ended 0.8% lower, its biggest one-day decline in two weeks. The domestically focused mid-cap FTSE 250 also lost 0.8%, touching its lowest levels in three weeks.
Chip shares dragged Asian indexes lower on Wednesday and European futures fell after growth concerns drove the steepest selloff in a month on Wall Street and investors wiped $279 billion from the value of market darling chipmaker Nvidia.
Oil hit year-to-date lows in Asia trade, the safe-haven yen rose, Japanese stocks fell more than 3% and the regional shares ex-Japan dropped nearly 2%.
Asian shares and global stock futures tumbled on Wednesday, led by a heavy decline in technology names and as worries about the global growth outlook drove investors out of risky assets, while oil prices hit multi-month lows.
September has historically been a bad month for stocks, though analysts pointed to a confluence of factors behind the rout, including tepid U.S. manufacturing data.
Wall Street closed sharply lower on Tuesday after the U.S. returned from a holiday at the start of the week, with AI darling Nvidia tumbling a record $279 billion as investors reined in their enthusiasm about artificial intelligence.
U.S. stock futures meanwhile extended declines. S&P 500 futures eased 0.55%, while Nasdaq futures shed 0.74%. EUROSTOXX 50 futures slid more than 1% and FTSE futures declined 0.75%.
Brent crude futures bottomed at $73.14 a barrel on Wednesday while U.S. crude hit a trough of $69.72, both their lowest levels since December. They had fallen nearly 5% in the previous session.
A slew of U.S. economic data is due this week, including figures on job openings, jobless claims and the closely watched nonfarm payrolls report out on Friday. Given the Federal Reserve's labour market focus, Friday's release could decide whether a rate cut expected this month will be regular or super-sized.
FTSE 100 technical analysis for today, 4th September 2024
A full on bear Tuesday yesterday.....
For today we may well see a dead cat bounce as the bulls try and defend the 8200 area and the bottom of the (still ascending) Raff channels. 8204 is also S1 to start with and a rise towards the pivot at the 8297 level does make sense.
Traders will probably latch onto potential rate cuts in the near future which may well give the markets some strength for today, though as you know September is usually a weaker month anyway.
Below the 8204 level then the 8150 S2 would likely be seen in fairly short order, though the supports below the 8200 level are a bit thin on the ground so we may well see the slide just continue. S3 at 8058 seems a bit unlikely today but you never know!
Resistance wise, then the daily pivot as mentioned is the first one to look for with 8333 above that and likely to get a reaction as it's the 200ema on the 30 minute chart. 8351 is then R1 and if the bulls were that strong to get it here, we may well see a stall here and the bears try and regain control.
Recession fears linger still, the AI hype is dying down a bit (was never totally convinced on that anyway, and still not!) and weakening data coming out at the moment are all weighing on markets.
A bit of a mixed bag for today really, possibly a rise and dip if the bulls are convinced enough to start with that the drop is a buying opportunity.
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