Bulls are certainly trying | 5475 5400 5270 support | 5630 5710 7800 resistance | Jobs data

Bulls are certainly trying | 5475 5400 5270 support | 5630 5710 7800 resistance | Jobs data

FTSE 100 live outlook prediction analysis for 26th March 2020

  • Global stocks push higher after US politicians strike $2 trillion stimulus deal
  • Stoxx 600 ends 3.1pc higher, its best two-day gain since 2008
  • Wall Street notches up minor rise
  • UK companies continue to withdraw guidance and ditch dividends as Covid-19 cash shock continues
  • Yesterday: Wall Street posts best performance in nearly 90 years, Europe and Asia see strongest gains since 2008

The picture in Europe was positive again yesterday with the FTSE 100 and the CAC showing solid gains. London’s benchmark index jumped 3.46pc, breaking through 5,600 points, while the FTSE 250 ended 4.09pc higher at 14,752.19 The Stoxx 600 ended 3.1pc higher, its best two-day gain since 2008.

The Dow and the S&P 500 closed higher on stimulus hopes while the tech-heavy Nasdaq ended lower.

Anti-Virus Stimulus

The Federal Reserve could now have as much as $4.5 trillion to keep credit flowing and make direct loans to U.S. businesses through the massive coronavirus stimulus bill being considered by U.S. lawmakers. The bipartisan agreement, which still needs to be passed by the Senate and House and signed into law by President Donald Trump, will include $454 billion in funds for the Treasury to backstop emergency actions by the Fed to support the U.S. economy, Senator Patrick Toomey said on Wednesday. The central bank will work with the U.S. Treasury to use that money as a backstop against credit risk as it supports markets for corporate and short-term state and local debt, while also loaning directly to businesses. Its lending facilities have typically required a loss-absorbing cushion of around 10% from the Treasury to protect it from loans that don’t get paid back. Congress’s stimulus package, meanwhile, keeps meeting snags. A dispute in the Senate over expanded unemployment benefits for lower wage workers is threatening to delay passage of the $2 trillion coronavirus relief package as several Republicans demanded changes. Independent Senator Bernie Sanders said he would hold up a vote if the legislation is altered.

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

The US Weekly jobs figures are published today. With many businesses closed for the duration, we will more than likely see a spike is jobless figures.

For most of this week we have adopted a buy the dip frame of mind and that has worked well as we have seen a rise generally, peaking at 5750 yesterday, just shy of the 5800 resistance level. However, for today I am now switching to a short the rallies mindset as the bulls have failed to hang on to the gains and another leg lower could well play out now. We have dropped off the 20 day Raff channel now, and that has 5660 as resistance for the moment. To negate a slide the bulls will now need to break above the 5713 level which is the most recent high. If they did manage that then it does keep the 5800 level alive. However, having risen on the most recent stimulus package, we may well see focus short back to the virus – spread, mortality, impact on the economy etc etc.

If the bears break below 5500 initially then there are a few support levels in play, but it does feel that a short bias is better for today. The first major support is off the 2 hour chart at 5441, then the round number and S1 at 5400. I have gone for a tentative long here in the plan in case it holds and garners a bit of a reaction. Below this then 5355 is the 200ema on the 30min chart. However, a slide down towards the 5250 level looks like it may well happen to end the week.

So for today I am thinking that we get a rise and dip play out, and am looking at 2500 on the S&P where we now have the 30min coral for resistance, and 5650 on the FTSE, again with a red coral here.

Good luck today.

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