End of month profit taking yesterday | New month money today | 7220 support | 7299 7320 resistance

Post election rise to continue for a strong year end | 7540 resistance | 7355 support | buy the dip

FTSE 100 Outlook and Analysis for 1st November 2019

The FTSE 100 suffered its biggest drop in almost a month yesterday as a series of heavyweight falls and fears that progress in US-China trade war talks may be stalling dragged on the blue-chip index.  It closed the day down 82.40 points at 7,248.38, after its biggest fall since fears of a worldwide slowdown rocked shares on Oct 2 during a week of wipe-outs.

Global markets received a fresh shot of uncertainty yesterday, after a report by Bloomberg said Chinese officials were pouring cold water on the likelihood of the US and China reaching a full, comprehensive deal to resolve the dispute over trade that has haunted investors.

With traders running from risk, there were widespread sell-offs, with the FTSE 100 feeling the biggest impact as the additional impact of a rising pound and several heavy fallers was felt.

The pound stayed at its highest level in a week all day, to close out its best month since the financial crisis. It rose above $1.29 on Wednesday night as the dollar pulled back after the US Federal Reserve made another cut to interest rates. Sterling held those levels throughout yesterday’s session, putting extra pressure on the internationally exposed index.

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

Start of a new month and we may well see the new month money have a bit of an initial effect. However, the 2 hour chart is bearish with resistance at the 7299 level and we have also moved below the 200ema on the 30min chart which now has resistance at the 7293 level. That said we also have initial support at the 7275 level which the bears will be keen to break though as that leads to a test of the 30min coral at 7261. We have climbed off the daily support yesterday at the 7250 level though not exactly rocketed away from it as yet.

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

Below the 7260 level then we have the 20 day Raff channel bottom at 7220 and with S1 at 7222, along with the fib at 7226 I am thinking that if we were to drop that low then a long at this level is worth ago. Of course, we may well see the 7250 remain as support for a push back towards the 7330 level which has remained as resistance for a while now.  If the bulls were to break above the 7299 level then this 7330 level is the next resistance area likely to be tested, and the bulls may well need a bit of external help to push past this.

The S&P has dropped back a little bit from its 3055 high, and now has 2 hour resistance at the 3049 level. So we may well see a drop down from this area to the daily support level at 2998 now.

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