7th December 2018
Well that was bearish! The benchmark FTSE 100 index suffered its worst day of trading since Britain voted to leave the EU, closing 217.79 points down, or 3.15pc to 6,704.05. The FTSE 250 tumbled 2.83pc to 17,753.31. Shares were firmly down in Europe and are still down in the US with the Dow Jones and S&P 500 more than 2pc lower. Technology and automotive stocks were among the hardest hit, as well as mining and oil companies.
Following a sharp decline in US stocks, markets in Europe and Asia were sent tumbling yesterday as hopes of a US-China trade war truce fizzled out and concerns surrounding Theresa May’s Brexit deal were rekindled.
Chinese officials finally ended their silence on the ceasefire with the US but it did very little to ease investor concern as details on the agreement still remained unclear.
Stocks in Europe headed south for a second consecutive day with the FTSE 100 closing 100.9 points, or 1.4pc, lower at 6,921.84. Europe’s construction and material stocks were among the worst performers while housebuilders and banks received a boost.
The FTSE 250 closed 46.77 points, or 0.26pc, behind at 18,282.87. In the eurozone, the Paris CAC 40 fell 1.1pc to 4955.98, while the Frankfurt DAX fell 1pc, trading at 11,222.22.
Asian stocks saw cautious gains with the region getting an early tailwind after the sharp rebound on Wall St, where most majors finished lower albeit off worse levels. UK PM May is said to be weighing plan to postpone next week’s Brexit vote, with her allies urging her to delay the vote amid forecasts for a catastrophic defeat. Oil prices subdued following the lack of solid breakthrough at yesterday’s OPEC meeting and with Saudi Energy Minister Al-Falih lacking confidence of reaching a deal today.
Looking ahead news highlights include EZ Revised GDP, US (NFP) and Canadian Jobs Reports, US EIA Natural Gas Storage, Fed’s Brainard Speaking, OPEC+ Meeting in Vienna.
The forecast for the NFP jobs report today is 198k versus 250k previously.
FTSE 100 Trading Signals, Forecast and Prediction
It’s NFP Friday so most of todays action will be driven by anticipation of that, as well as the actual release. However, we may well see a bit of consolidation after yesterday rather wild move. We have risen well off the lows and looking to open at +100. It is pretty rare to get a -250 point day as per yesterday on the FTSE so it may well want to catch its breath today. I have a fairly positive 30min chart to start with today, with support at 6782 with the daily pivot and the 25ema, but also the coral has gone green for the first time in a while, with support at 6742. If this level holds then we may well have seen the low at 6670 for the moment. If not then a lower level around 6600 is still possible. That move down will certainly have flushed out a lot of longs that were positioning earlier this week for a possible Santa Rally.
Can the bulls break 6827?
On the upside, I am looking at 2 hour resistance at 6827, and we also have a key fib here at 6824. if this holds as resistance then the bears are likely to go for a decent drop again. Higher up we have a red coral on the 2hour chart at 6930 and a level that might well see the bears reload if it were to get that high.
The gold short is still running at 1242 with the stop at breakeven currently. All things considered gold was remarkably flat yesterday even with the sell off in indices.
Non Farm Payrolls
As it’s Friday and NFP again it will pay to be slightly cautious, especially with this fairly wild price action. If a trade doesn’t go your way off a key level fairly quickly then it pays to cut it rather than hold on hoping it comes back, as it rarely does.
Good luck for today and have a great weekend.
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