FTSE 100 live outlook prediction analysis for 16th November 2020
London’s FTSE 100 closed Friday down 0.36pc at 6316.39, after excitement from earlier in the week over a coronavirus vaccine whittled down as cases rose to record levels in the UK and US. Still, falls later in the week weren’t enough to offset earlier rises. The index saw its best weekly gains since April.
Rishi Sunak is poised to stoke up consumer spending with a fresh multi-billion pound giveaway blitz after official figures revealed that the economic recovery has almost ground to a halt. The Chancellor is preparing to take emergency action following statistics which showed that the economy remained more than 8pc below its pre-crisis peak at the end of September, despite an unprecedented GDP rebound of 15.5pc in the third quarter as businesses reopened.
Biggest Trade Deal
Asia-Pacific nations including China, Japan and South Korea on Sunday signed the world’s largest regional free-trade agreement, encompassing nearly a third of the world’s population and gross domestic product. Top officials from 15 nations that also include Australia, New Zealand and the 10 members of the Association of Southeast Asian Nations — but not India — inked the RCEP (Regional Comprehensive Economic Partnership) on the final day of the 37th Asean Summit. Supporters of the trade pact, which covers 2.2 billion people with a combined GDP of $26.2 trillion, said it will reduce tariffs, strengthen supply chains with common rules of origin, and codify new e-commerce rules.
Market Open
The yen slipped at the start of the trading week, while Asian stocks were poised to gain. On Friday, both the S&P 500 and the Russell 2000 Index of small caps rallied to all-time highs, while the Dow Jones Industrial Average rose to pre-pandemic levels. The tech-heavy Nasdaq 100 underperformed major gauges amid the rotation to economically sensitive industries. Ten-year Treasury yields ended last week at 0.9%. The pound dipped as barriers remain to reaching a trade deal in Brexit talks. Global stocks have recovered to their pre-pandemic highs after optimism about a vaccine last week drove a rotation into value and cyclical sectors, whereas more defensive industries underperformed. Still, concerns about a sustainable economic recovery persist amid a flare-up in cases around the world.
No Lockdown
Two of President-elect Joe Biden’s coronavirus advisers said they favor targeted local measures to stem the pandemic rather than a nationwide U.S. lockdown. Vivek Murthy, a former U.S. surgeon general who is one of Biden’s top three advisers on the virus, said that the preferred approach to fighting it is “a dial that we turn up and down, depending on severity.” Finding ways to curb Covid-19 infections is increasingly urgent for Biden after U.S. cases hit records over the past two weeks.[Bloomberg]
FTSE 100 Outlook | Trading Signals | Forecast | Prediction | Analysis
Asian stocks and U.S. futures climbed on Monday, buoyed by positive sentiment on regional trade and signs of opposition to a national American lockdown despite surging virus cases. The dollar retreated.
The Asian benchmark was on track for a record close, with Japan and South Korea outperforming. A slew of Asia-Pacific nations on Sunday signed the world’s largest regional free-trade agreement, encompassing nearly a third of the globe’s population and gross domestic product. In Australia, share trading was suspended for the day due to a market data issue.
S&P 500 futures extended last week’s advance after advisers to President-elect Joe Biden said they opposed a nationwide U.S. lockdown. Oil pushed higher and Treasuries were steady. On Friday, both the S&P 500 and the Russell 2000 Index of small caps rallied to all-time highs. The tech-heavy Nasdaq 100 underperformed amid the rotation to economically sensitive industries.
Bull Monday has kicked in with a bolt today, with a decent gap up on the S&P at 3615. We may well see it try and close the gap (with Fridays close at 3587) though so be prepared for a dip and rise to play out today. That would tie in with a similar pattern on the FTSE for today, as we are at R1 as I write this at 6375, and a dip down to the 30min coral support at 6325 and daily pivot at 6316 may well play out intially. Possibly as low at 6299 where we have a key fib level too.
The FTSE 2 hour chart remains bearish following the decline after last Monday’s vaccine news, and resistance from that is at 6416. That is also just above R2 at 6410, so we may well see a stutter in this area, and that may well coincide with the S&P R3 resistance level of 3684.
For the FSTE bulls, above 6416 would likely see a rise towards the 6505 level, possibly with a slight pause at R3 for today at 6468. Feels like we may well see another bullish Monday though, and buying the dip this morning looks like it is the right play. We have held steady above the 200ema the past week in a good sign for more bullishness (support from that is at 6212 now) and both the Raff channels are heading upwards. The markets looks six months ahead as you may well know, so it is pricing in a successful roll out of the vaccine and getting a global economic recovery underway in the New Year.
For the FTSE bears, below the 6300 level then 6268 is the 200ema on the 30min and the next main support blow the fib level at 6298. I’d be surprised if we go below that level today, but if we did then 6212 is the 200ema on the daily as mentioned. Ultimately, there is a decent swing long brewing with support from the 25ema on the daily at 6010 currently, so should we get down to test that moving average anytime soon, it may act as the springboard for the Santa Rally to resume. Of course, this may have already started on 2nd November!
Anyway, back to today and in summary, look for resistance at 6375, 6410 and possibly 6468 and 6500. Support is at 6330, 6316, 6298. Good luck today.
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