Quote from Nick on 4th October 2021, 10:49 am

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

Asian stocks and U.S. equity futures started the week on the back foot, as investors weighed the prospects for growth against concern over inflationary pressures.
Japanese and Hong Kong shares dropped alongside contracts on the S&P 500. Earlier gains vanished after trading of China Evergrande Group shares was suspended in Hong Kong, along with those of its property management unit. Mainland Chinese markets are closed through Thursday for the Golden Week holidays. Australian shares bucked the trend, and European futures were steady.

The dollar steadied after two sessions of losses. Treasuries fluctuated, with 10-year yields inching up to 1.47%. The S&P 500 closed higher Friday after promising results for a Covid-19 pill and positive manufacturing data triggered a rally in companies that stand to benefit from an economic reopening.

FTSE 100 live outlook prediction analysis for 4th October 2021

The bulls defended the 7000 level (and the slight overshoot to 6986) well on Friday and it looks like we may well get some October strength start to appear. The crucial factor is that the S&P500 2h chart is bullish with support at 4315 currently and that level will need to be defended today if seen. 4309 is also the key fib support for today. The slight spanner in the works is that we have a red coral on the 2h at 4355 so that is the level that the bulls need to break and it is this line that has been tested Sunday night and we are seeing the drop off.

I am thinking that we may well get another dip and rise play out, a bit like Friday as the bulls are starting to dip their toes back into the water. For the FTSE100 7007 level looks good to start with - we have S1 and the key fib here, along with it being the daily support level - though admittedly that was also the case on Friday and we got the break below it.  Helping it today though is the green 30m coral with support at 7032 to start with. We are just above this as I write this email so we could still a spike below then back up again.

Below 7007 then Fridays low at 6986 is the next support level of note, with the S2 level at 6948 below that. That said, we do have the bottom of the 10 day Raff channel for support also at 6968 and I would like to see this level hold if seen, as it would set up a good climb for October. The 10d Raff channel has turned and is heading up again now, lending some weight to there being a bullish period coming up. Just need the S&P to play ball too.

The news flow remains negative, with China probing Taiwan, and then the usual doom and gloom that we seem to see every day at the moment. They do say that markets like to climb a wall of worry though!

For the bulls on the FTSE100, they will be looking to break above the 7080 level where we have the red 2h coral, and have dropped from on Sunday night. Initial resistance is therefore there today, and then we have 7119 above that where we have the key fib. Higher up, and maybe a bit of a big ask for today is 7143 with daily resistance there along with R2. The top of the Raff channels are at 7260 currently, and a rise towards them during early October would play out well.

Really looking to see if the bulls can defend an opening drop this morning, and I suspect they will be keen to defend the 7000 level again if it were to get there first thing. Just depends on the ability to shake off the bad news. I am watching that 2h support on the S&P500 at 4315 closely today.

Good luck today.

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