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Bearish start to the week with bad news flow | 6930 7050 resistance | 6833 6765 support

#1 · 7th March 2022, 10:28 am

Quote from Nick on 7th March 2022, 10:28 am
FTSE 100 Analysis | Signals | Forecast | Prediction | FTSE 100 Outlook | Trading help

Global stocks were plunged into turmoil on Friday as an escalation in the fighting in Ukraine sent shockwaves through markets. Futures have continued the trend with the FTSE currently down 150 points at 6860, but up form the lows at 6760.

Traders were gripped by fears of nuclear disaster after heavy Russian shelling sparked a blaze at Europe’s largest nuclear power plant in Zaporizhzhia. The fire was extinguished and the plant was said to be safe after Russian forces seized control of the site, but world leaders condemned the “reckless” assault that risked nuclear catastrophe.

Combat raged elsewhere, with Vladimir Putin stepping up the bombardment of several Ukrainian cities as the war entered its second week.

The FTSE 100 crashed 3.5pc, wiping just under £79bn off Britain’s biggest companies for a total of £133bn across the week. It was the first weekly performance for the blue-chip index since the outbreak of Covid in March 2020.

Oil giants Shell and BP were among the biggest drags on the index, even as oil prices continued their recent rally to trade at around $115 a barrel.

Financial stocks including HSBC and Barclays also slid as the ramping up of sanctions and surging commodity prices fuelled fears of further inflation and a hit to economic growth.

Wall Street’s three main indices also fell as much as 2pc, with nearly three quarters of companies on the S&P 500 in the red.

Benchmark Brent crude maintained its ascent after hitting its highest level since 2008 near $120 a barrel earlier in the week. That capped off its most tumultuous week ever, as it gained more than 20pc and swung wildly within a $20 range.

European natural gas prices surged to an all-time high above €200 per megawatt-hour, while the UK equivalent also hit its highest level ever.

Fears of supply disruption spread to a range of products, ranging from wheat and corn to nickel and aluminium, driving commodities to their biggest weekly surge since the 1974 oil crisis.

Market panic also pushed investors towards safe-haven assets, with the dollar climbing to its highest since 2020. The euro dropped to its lowest level in almost two years.

Stakes Rise
As Russia’s invasion of Ukraine heads toward the two-week mark, President Vladimir Putin reiterated that the war will continue until Ukraine accepts his demands and halts resistance, dimming hopes for a negotiated settlement. The United Nations said more than 1.5 million people have already fled the country since hostilities began. Meanwhile, TikTok and Netflix are the latest companies to halt operations in Russia; the U.S. and Poland are working on a way to provide Ukraine with warplanes; and Russia says sanctions will determine whether international bondholders get paid.

Oil Ban?
Stocks face a challenging open after the U.S. raised the prospect of working with allies to ban imports of Russian oil, a step that could stoke the rally in crude and intensify inflationary pressures. Secretary of State Antony Blinken said the U.S. and its allies were looking at a coordinated embargo, while ensuring appropriate global supply. Equity futures earlier were already pointing to declines in Japan and Hong Kong and a muted start in Australia. The dollar was mixed against key peers in early trading.

FTSE 100 live outlook prediction analysis for 7th March 2022

Well thats quite a bearish start to the day but I expect we may well see a concerted effort across the board to drive markets back up at least initially. The newsflow is pretty dire at the moment and the spectre of $200 oil has once again reared its head. The problem with such an interlinked world is that the repercussions from one element going bad is felt globally across the board. The rising costs, inflation, war, etc are all effecting sentiment.

Anyway, I'll just focus on the technicals today and try and make some sense of these moves for you! I expect volatility to continue apace this week and we will lurch from one headline driven move to the next. Sentiment is obviously quite fearful and bearish at the moment so shorting the rallies is still the right play.

Initially we have climbed off the overnight low pretty well and are heading back towards the 6900 level as I write this. The bulls will be keen to regain this as that may well see a push for 7000 then, and with the daily pivot at 7050 we could see that. A short here though is definitely worth a go! Prior to that though we have decent resistance at 6928 with the 30m coral here.

Above 7050 then the 7140 level is the Hull MA on the 2h and would be the first test since that went bearish on Thursday. I don't think we will get that high today but if we did then a drop from here may well play out. The 2h coral is now also red (unsurprisingly!) and has 7280 as resistance for the moment.

Support wise, then S1 is first up again at 6833 and I am thinking that if we do see that effort from the bulls to start with then this may well hold. Otherwise a retest of the overnight low at 6760 is likely to materialise. Below that then 6696 is S2 and things are looking pretty ropey off we get that low!

Will we get a bull Monday? I think they may well try. We do also have the larger dividend of nearly 28 points this week though that wont really be enough to counter the negative sentiment at the moment. One fund has even said there is a 10% chance of nuclear war but keep buying stocks anyway. Might as well as if it goes nuclear it won't matter, and if it doesn't then we have had a decent dip to buy into! #thinkpositive.....

So, continue to stay nimble and the volatility should continue to present decent opportunities. It can also be worth hoping on a move as it starts to play out though do please also stay cautious!

Watching 6833 and 6760 for support; 6930 and 7050 for resistance. Good luck today.

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If you would like more detailed analysis for FTSE 100, DAX, Gold and S&P, including the trades that I am looking to take myself, then please join my active members community.

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Daily Analysis pre market open (sent around 7am each day) for FTSE, DAX, Gold and S&P.

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

Global stocks were plunged into turmoil on Friday as an escalation in the fighting in Ukraine sent shockwaves through markets. Futures have continued the trend with the FTSE currently down 150 points at 6860, but up form the lows at 6760.

Traders were gripped by fears of nuclear disaster after heavy Russian shelling sparked a blaze at Europe’s largest nuclear power plant in Zaporizhzhia. The fire was extinguished and the plant was said to be safe after Russian forces seized control of the site, but world leaders condemned the “reckless” assault that risked nuclear catastrophe.

Combat raged elsewhere, with Vladimir Putin stepping up the bombardment of several Ukrainian cities as the war entered its second week.

The FTSE 100 crashed 3.5pc, wiping just under £79bn off Britain’s biggest companies for a total of £133bn across the week. It was the first weekly performance for the blue-chip index since the outbreak of Covid in March 2020.

Oil giants Shell and BP were among the biggest drags on the index, even as oil prices continued their recent rally to trade at around $115 a barrel.

Financial stocks including HSBC and Barclays also slid as the ramping up of sanctions and surging commodity prices fuelled fears of further inflation and a hit to economic growth.

Wall Street’s three main indices also fell as much as 2pc, with nearly three quarters of companies on the S&P 500 in the red.

Benchmark Brent crude maintained its ascent after hitting its highest level since 2008 near $120 a barrel earlier in the week. That capped off its most tumultuous week ever, as it gained more than 20pc and swung wildly within a $20 range.

European natural gas prices surged to an all-time high above €200 per megawatt-hour, while the UK equivalent also hit its highest level ever.

Fears of supply disruption spread to a range of products, ranging from wheat and corn to nickel and aluminium, driving commodities to their biggest weekly surge since the 1974 oil crisis.

Market panic also pushed investors towards safe-haven assets, with the dollar climbing to its highest since 2020. The euro dropped to its lowest level in almost two years.

Stakes Rise
As Russia’s invasion of Ukraine heads toward the two-week mark, President Vladimir Putin reiterated that the war will continue until Ukraine accepts his demands and halts resistance, dimming hopes for a negotiated settlement. The United Nations said more than 1.5 million people have already fled the country since hostilities began. Meanwhile, TikTok and Netflix are the latest companies to halt operations in Russia; the U.S. and Poland are working on a way to provide Ukraine with warplanes; and Russia says sanctions will determine whether international bondholders get paid.

Oil Ban?
Stocks face a challenging open after the U.S. raised the prospect of working with allies to ban imports of Russian oil, a step that could stoke the rally in crude and intensify inflationary pressures. Secretary of State Antony Blinken said the U.S. and its allies were looking at a coordinated embargo, while ensuring appropriate global supply. Equity futures earlier were already pointing to declines in Japan and Hong Kong and a muted start in Australia. The dollar was mixed against key peers in early trading.

FTSE 100 live outlook prediction analysis for 7th March 2022

Well thats quite a bearish start to the day but I expect we may well see a concerted effort across the board to drive markets back up at least initially. The newsflow is pretty dire at the moment and the spectre of $200 oil has once again reared its head. The problem with such an interlinked world is that the repercussions from one element going bad is felt globally across the board. The rising costs, inflation, war, etc are all effecting sentiment.

Anyway, I'll just focus on the technicals today and try and make some sense of these moves for you! I expect volatility to continue apace this week and we will lurch from one headline driven move to the next. Sentiment is obviously quite fearful and bearish at the moment so shorting the rallies is still the right play.

Initially we have climbed off the overnight low pretty well and are heading back towards the 6900 level as I write this. The bulls will be keen to regain this as that may well see a push for 7000 then, and with the daily pivot at 7050 we could see that. A short here though is definitely worth a go! Prior to that though we have decent resistance at 6928 with the 30m coral here.

Above 7050 then the 7140 level is the Hull MA on the 2h and would be the first test since that went bearish on Thursday. I don't think we will get that high today but if we did then a drop from here may well play out. The 2h coral is now also red (unsurprisingly!) and has 7280 as resistance for the moment.

Support wise, then S1 is first up again at 6833 and I am thinking that if we do see that effort from the bulls to start with then this may well hold. Otherwise a retest of the overnight low at 6760 is likely to materialise. Below that then 6696 is S2 and things are looking pretty ropey off we get that low!

Will we get a bull Monday? I think they may well try. We do also have the larger dividend of nearly 28 points this week though that wont really be enough to counter the negative sentiment at the moment. One fund has even said there is a 10% chance of nuclear war but keep buying stocks anyway. Might as well as if it goes nuclear it won't matter, and if it doesn't then we have had a decent dip to buy into! #thinkpositive.....

So, continue to stay nimble and the volatility should continue to present decent opportunities. It can also be worth hoping on a move as it starts to play out though do please also stay cautious!

Watching 6833 and 6760 for support; 6930 and 7050 for resistance. Good luck today.

Recommended Broker

IC Markets - offers market leading pricing and trading conditions by providing clients with True ECN Connectivity; this allows you to trade on institutional grade liquidity from the world’s leading investment banks, hedge funds and dark pool liquidity execution venues. Highly recommended!

Membership and Live Trading

If you would like more detailed analysis for FTSE 100, DAX, Gold and S&P, including the trades that I am looking to take myself, then please join my active members community.

What you get

Daily Analysis pre market open (sent around 7am each day) for FTSE, DAX, Gold and S&P.
Daily email pre market includes my trading plan for the day including ORDER levels, with stops and targets/limits
Telegram live trading room and webinar group membership for discussion and realtime trade updates