18th December 2018
That was pretty bearish again yesterdays the USA was weak once again, and its all eyes on the Federal Reserve’s crucial meeting this week and Donald Trump as turned up the heat on its rate-setters ahead of the vote. Markets are expecting the central bank to lay the groundwork for a pause in its rate rises next year but the US president has suggested that its rate-setters should not even lift interest rates this week as expected.
14 month low
U.S. equity indexes slid to their lowest close in 14 months as investors weighed the impact of a Federal Reserve hike on growth in an economy already anxious over trade, geopolitical tensions and a possible government shutdown. The S&P 500 Index finished Monday’s session at its lowest since October 2017. The technology, health-care and consumer sectors led the rout
Retail suffering
With more jobs than ever before, rising wages and low interest rates – the hope was that Brits would be enthusiastically hitting the shops again this winter. Yet retailers are reporting that shoppers are staying at home instead of venturing out to the high street. The latest was ASOS issuing a shock profit warming. That wiped billions of redials shares yesterday and added to the general malaise. Asos slashed its full-year sales guidance after suffering a “significant deterioration in the important trading month of November”. It now expects sales growth of 15pc, compared to its previous guidance of 20-25pc. Asos blamed “economic uncertainty” for weakening consumer confidence across its main markets and a “high level of discounting and promotional activity” for its worst sales growth in recent years. You probably saw my tweet yesterday and I think a lot of the issues also boils down to high prices, most of which feel a bit of a rip off fro what you get. Not just on retail but on everything. The cost of living seems to have increased significantly in recent years, outstripping inflation. People have realigned their priorities, and buying “stuff” has dropped down the list.
Federal Reserve
Donald Trump’s hectoring aside, it’s exceedingly rare for the Federal Reserve to raise interest rates when stocks are behaving this badly. In fact, were policy makers to follow through with their widely expected hike Wednesday, it would be the first time since 1994 they tightened in this brutal a market. And a chart level that most investors thought would never be tested again in 2018 is shaping up as its best hope after U.S. stocks staged their worst back-to-back declines since October. It’s 2,532.69 on the S&P 500, the intraday bottom touched on Feb. 9, and until Monday the lowest trading level of the year. It was briefly breached in the last 15 minutes before the index finished at 2,546, down 54 points to the lowest level since October 2017.
FTSE 100 Trading Signals, Forecast and Prediction
Not a good sign that the bears were able to break 6740 overnight, and we saw a low of 6693 which may well act as support today if we dip again. However, the recent major low is at 6670 and that area looks like it might be seen again if yesterdays weakness, and jitters ahead of the Fed, carry on. The 30min chart has resistance from the coral at 6766 area to start with and we also have the daily pivot here, so I am thinking that we may well see a dip from this area first thing.
Higher up, the 2 hour coral has gone red after yesterday’s drop and has resistance at 6832 currently. It does still seem like any rallies are being shorted quite heavily as the news back drop continues to remain negative. There isn’t any sign of any “Santa rally” as yet (its not guaranteed!)
If the bulls are to do some sort of rally this week then they will probably try and defend the 6670 area. We also have S1 at 6678 for today.
So, could be on for an interesting day. Watching to see if the 6670 holds for the moment, but watching 6766 and 6830 resistance. Might be worth longing a break of 6766 as well as the bulls may well try and take it higher. The S&P defended the February low price yesterday so may well have just set up a double bottom for 2018 so watch that 2530 level closely on the S&P. The S&P still has 2 hour resistance at 2594 currently.
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