FTSE 100 Analysis | Trading Signals | Forecast | Prediction | FTSE 100 Outlook | Trading help
I hope you enjoyed the weekend. Markets have already started to retrace some of Fridays drop after the drop to 7000 on the FTSE, and the test of the daily coral on the S&P500 at 4565 which has held well.
The FTSE 100 suffered its worst fall in nearly 18 months on Friday and stock markets plunged around the world owing to fears that a new variant of Covid would trigger a return to lockdowns and wreck the global recovery. Britain’s blue chip index dropped 3.6pc in its worst session since June last year when the initial crisis was in full swing, wiping £72bn off the value of Britain’s biggest companies. German markets closed down 4.2pc and France fell 4.8pc.
In the US, the S&P 500 tumbled 2.3pc in its biggest drop since February. Oil plunged amid concerns about a collapse in demand triggered by international travel curbs and work from home orders, with Brent Crude suffering a 10pc drop – its biggest decline since April last year.
However, things have stabilised over the weekend with news that the vaccine does help protect against the Omicron mutation, and indeed so far the symptoms of this variant remain mild. This week could remain choppy though.
U.S. equity futures, crude oil and Treasury yields climbed Monday as investors tried to calibrate economic risks from the omicron coronavirus strain, bringing some calm back to markets.
S&P 500, Nasdaq 100 and European contracts jumped, WTI oil rallied back above $71 a barrel and the 10-year U.S. Treasury yield rose past 1.50%. Asian stocks fell but the moves were modest compared with Friday’s global equity selloff. Japan led declines after the government shut borders to visitors.
The yen and euro slipped and a dollar gauge edged higher. The currency of South Africa, where the variant was identified, climbed against the greenback. While much remains unanswered about the new strain, two South African health experts suggested it’s presenting with mild symptoms so far. The World Health Organization urged caution, saying it will take time to assess the pathogen.
Investors are trying to work out if the omicron flareup ends up being a relatively brief scare that markets eventually rebound from, or a bigger blow to the global economic recovery. The prospect of tighter monetary policy to tackle price pressures was already complicating the outlook.
Omicron’s Impact
Airlines, passengers and businesses scrambled to respond to a deluge of travel restrictions announced over the weekend to slow the spread of the omicron variant. Australia suspended direct flights from nine southern African countries. Singapore is watching the impact of the new strain “very closely” and may be forced to roll back some easing measures. The Philippines won’t welcome travelers from some European countries for the next several weeks. Meanwhile, the WHO is urging caution after two South African health experts, including the doctor who first sounded the alarm about omicron, indicated that symptoms linked to it have been mild so far. The variant appears to be more transmissible, reinforcing the need for vaccinations or booster shots, said the U.S.’s top infectious-disease doctor, Anthony Fauci.
FTSE 100 live outlook prediction analysis for 29th November 2021
If you longed the levels sent out in the update on Friday –
- 7014 200ema daily FTSE100
- 4580 daily support S&P500
- 15240 DAX 200ema daily
Then its worth banking some of them here this morning pre open – 7140, 4640 and 15450.
So, what will today have in store….. We have seen a bit of the initial panic subside so far and a decent bounce from the lows on Friday with the FTSE back above 7100 as I write this. It bodes well for a bit more upside towards the 7200 resistance area, where we have the 200ema on the 30m, along with R1 and the Hull moving average on the 2h chart. Above this the 2h coral is red with resistance at the 7242 level – a concerted push to there this morning could then see the bears have another go.
Of course, we squeezed the bulls on Friday, and we will now more than likely squeeze the bears today! The market does like to try and trap as many in both directions. Those supports mentioned above though have held well and should the news that this latest variant, Omicron, indeed be mild and also trigger better natural immunity then we remain on track for the stronger year end. If nothing else then the drop on Friday reset the fear/greed and all the overbought indicators rather well!
For support the bears will be looking to break below 7105 initially as we have the daily pivot here, and then the 30m coral below that is the next support, at 7070 and also aligns with the key fib support there. I am however thinking that once again buying the dip today will be good unless the news flow turns negative again.
The government acted quickly this time to counter the threat of the Omicron spreading by shutting the travel corridor quickly, having been accused of waiting too long last time with Delat etc. Of course you’re damned if you do and damned if you don’t when making these decisions but easier to go full on then back off having learnt from previous spreads.
If the bears were to break below the 7070 level though then we will likely see a slide down to the 7000 level again, and S1 is right down at 6915. Would take some negative news again to take us that low though. Not expecting that today though…. Famous last words maybe!
Anyway, bank some of those longs here first thing, and lets see if we can get a rise towards 7200 this morning. Good luck today.
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