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A V sign... nope dip and rise | 7025 6978 support | 7080 7145 7157 7170 resistance

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

  • FTSE 100 falls 1pc Wednesday

Despite closing just below 7000, FTSE100 futures have rallied well as progress is made on the debt ceiling increase.  The S&P 500 and Nasdaq 100 erased losses of more than 1% to close with gains on a possible deal to boost the debt ceiling into December, alleviating the immediate risk of a default but leaving the political fight simmering in Washington.

Seasonal volatility continues and if it sticks to the pattern of a weak September, slightly choppy start to October, we should still see a strong year end. 7500 remains viable for the FTSE100.

Russian President Vladimir Putin has vowed to pump more gas into Europe to stabilise turbulent energy markets after prices surged to new record highs. Natural gas prices skyrocketed as much as 39pc to more than 400p a therm earlier today, sparking fears that the energy crisis will fuel inflation and hamper the economic recovery. Europe’s gas stockpiles are at their lowest seasonal level in more than a decade, while supplies from top seller Russia are limited and global competition for liquefied natural gas is intense.

Stocks rose along with U.S. equity futures Thursday, bolstered by progress on the debt-ceiling impasse in Washington and a rebound in Chinese technology shares. Treasuries dipped as traders await key jobs data. MSCI Inc.’s index of Asia-Pacific stocks was on track for its biggest gain since Aug. 31. Hong Kong jumped as a technology gauge bounced from a record low. U.S. and European futures rose after the S&P 500 and Nasdaq 100 swung higher on a possible deal to boost the debt ceiling into December.

FTSE 100 live outlook prediction analysis for 7th October 2021

Well we got the dip and rise yesterday, and the bulls are now back on the front foot having defended that move below 7000. After that the 2 hour chart has gone bullish, with decent support at 7025 and tying in with the daily pivot and green 30m coral. As such should we get a drop down to this area then its worth a long here for a climb up towards those higher resistance levels we have at the 7140+ area.

As mentioned above the usual seasonality is playing out and whilst we may still get one more drop in early October, its bodes well for continued upside over the remainder of the year. The news flow remains negative but I expect markets will probably shake that off, and lo and behold we will get some positive headlines in November and December.

Resistance wise, we have the R1 level at 7105 first up, if we pop above the 7080 overnight high, and also the red daily coral at 7099. That wouldn't be the first test of that though so its not going to be the strongest resistance there is. Above the R1 7105 level then R2 is 7157 and just above the daily resistance at 7145, 7160 is also the recent high from last week, so this area may well see a stutter, as we see some profit taking.  I'd be surprised if we push past 7160 today though and R3 at 7236 looks a bit fanciful for today. That said, the market can always surprise!

The S&P also looks bullish and a rise towards the R2 level at 4436 may well play out of the bulls can break above 4405 today. We have R1 here, and also the top of the 10 day Raff channel, so a move above here would give the bulls enough of a boost to push higher. 4310-4320 is the support level from the 2 hour chart with the coral finally going green. Though this is not the first test of the Hull moving average support (that was yesterday at 4300) and the overshoot to 4283, it may well hold this time.

For the bears they will be looking to break the 7020 level as 6961 can then be targeted as we have the key fib here. As per the above, whilst we may get one more leg lower the worm feels like its turning and we will be back in a bullish trend soon. With the key fib and S1 at the 6970 level a break of this would be significant  (and may be the catalyst for the final leg lower) and would likely lead down to S2 at 6890. 6863 is below that with the 20d Raff channel bottom here, and just below the 200ema on the daily at 6910. I am not expecting it to get that low today but do bear it in mind as a potential area of note if we get a final leg down early next week.

So, looking like the bulls will have it today, buy the dip once again and good luck!

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