FTSE 100 Analysis | Signals | Forecast | Prediction | FTSE 100 Outlook | Trading help
In hours yesterday the FTSE 100 extended gains for the second straight session, as a rally in oil and mining stocks helped counter early gloom amid concerns about tighter US monetary policy. After falling as much as 0.2pc, the index reversed course to gain 0.2pc, closing at its highest since February 2020. However it all changed after the Fed at 7pm, with a major sell off after hours. The S&P failed to break above the 4795 level and we are now down at 4680, with the FTSE100 just above 7400. We got the 7500 year end I was expecting a bit later and have failed to really push on past that. Is that the short term high?
Stocks in Asia and U.S. and European futures extended a global selloff Thursday as the rout in technology shares and bonds accelerated after the Federal Reserve signaled interest-rate hikes may be more aggressive than many had expected.
An MSCI Inc. index of the region’s equities retreated for the third day in four with a gauge of tech shares among the worst performing. Treasury yields headed higher, with the 10-year yield at the highest since March as traders increased bets U.S. rates will rise at least three times this year.
The Nasdaq 100 tumbled the most since March Wednesday as rising yieldsadded to concerns over growth and profitability. The S&P 500 also retreated. Overnight swaps markets moved to price in an 80% chance of a 25 basis-point hike at the Fed’s meeting in March. The dollar and yen climbed as safe havens caught a bid.
A selloff in Chinese tech companies worsened on concerns firms will pare holdings amid Beijing’s regulatory crackdown on the sector. The Hang Seng Tech Index fell for a fourth day.
Covid News
Tennis star Novak Djokovic has been denied entry to Australia to contest the first tennis Grand Slam of 2022, after failing to provide sufficient evidence that he cannot be vaccinated against Covid for medical reasons. In Asia, Hong Kong imposed a raft of strict new virus control measures as the government pursues its Covid Zero policy; Singapore said boosters will be required for people to maintain their “vaccinated” status; and India is ratcheting up curbs on movement as a third wave takes hold. Meanwhile in the U.S., data suggests New York City’s omicron peak is yet to come, while the nation’s hospitals battle their worst staffing shortage in a year; the U.K. plans to ease Covid testing rules with cases at a record high; and France hit a new daily record with infections at 332,000.
FTSE 100 live outlook prediction analysis for 6th January 2022
That sell off last night has brought things down to some key supports, namely the 4680 S&P500 level and the 7400 round number on the FTSE. As such we may well see a bit of a bounce initially as the bulls “buy the dip”. However if they fail to recapture some key levels then we may well start to see a weaker period kick in earlier this month. Things are a bit jittery anyway and rate rises, spending squeeze, supply chain issues, and the general business environment all throwing spanners into the works we could see a weaker start to year. Some talk starting again of the recession kicking in this year too with pay cuts and redundancies.
For the FTSE100 I am looking at a climb to start with towards the 2hour resistance level at 7480, as we also have the daily pivot and the 30m coral here for resistance. This is the level that the bulls will need to push past today for a retest of the 7500 level, and will need to hold above it. Above 7500 then 7530 recent high and then the daily resistance at 7560. Not sure we will get that high today though. 7480 looks key!
Of course it’s planned to do rate hikes rather than actual ones at this stage so could of course just be a shot across the bows to gauge the reaction. Start priming the market if you like – and then each time its mentioned the reaction is lessened, to the point where it actually happens it is “priced in”.
For the bears they will be looking to take this below 7400 as we then have the recent low at 7360 as the next key level with 7293 below that with the daily coral (green) here. However 7380 is the bottom of the 10 day Raff channel for now so we could well see that hold instead – a long here is worth a go, along with the 7393 S2 level in play at this area. I have a feeling that the bulls will be quick out the blocks though today.
So, not too much more to say really, looking at a rise and dip and if the bulls fail to recapture and hold the key resistance levels then we may well be back to “shorting the rallies” a bit earlier in January than usual.
Good luck today
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