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Biden inauguration today | 6701 6650 support | 6740 6785 6810 resistance

#1 · 20th January 2021, 10:00 am

Quote from Nick on 20th January 2021, 10:00 am
FTSE 100 live outlook prediction analysis for 20th January 2021
HSBC provided an upwards push to the FTSE 100, climbing 8.5p to 411.5p after Mark Tucker, its chairman, said coronavirus had forced the bank to makes its plan for an operational overhaul more radical, with a particular focus on Asian growth.
AstraZeneca also rose, climbing 60p to £77.22 after Handelsbanken’s analyst Peter Sehested said it was set for the “most dynamic” quarter of the pharmaceutical and biotech stocks covered by the Swedish bank.

But the blue chip index ended the day in the red after Entain plunged 168.5p to £12.45 after US suitor MGM Resorts backed out of a takeover bid. Fellow bookmaker Flutter was knocked as a result, falling 390p to £144.
The FTSE 100 closed down 7.7 points at 6,713.0.
Taking on China
Janet Yellen said the U.S. is prepared to take on China’s “abusive” trade and economic practices, signaling that President-elect Joe Biden’s administration will aim to continue some of Donald Trump’s hard-line policies toward Beijing. China "is undercutting American companies by dumping products, erecting trade barriers and giving illegal subsidies to corporations,” Yellen, Biden’s intended nominee for Treasury secretary, said. Secretary of State Michael Pompeo added to tensions by labelling China’s crackdown on Uighurs a "genocide". Meanwhile in a rare gesture of goodwill toward his successor, Trump said in his farewell address that he wished Biden's administration success; Senate Republican leader Mitch McConnell said the mob that stormed the Capitol was "provoked by the president"; and Biden is planning an immigration overhaul on his first day in the job.
Market Rebound
Asian stocks looked set for a muted start Wednesday after their U.S. peers rebounded from Friday’s selloff and traders parsed the latest earnings reports. The dollar retreated. Futures edged higher in Japan and Australia, though dipped in Hong Kong, which saw strong gains Tuesday. U.S. stocks rose, led by tech shares and small caps. Treasuries were steady, with the yield on 10-year notes around 1.1%. Crude oil advanced and gold was little changed. Netflix surged in after-hours trading as it added more customers than expected.
No Bears
While the risk of a correction in stocks is increasing, stimulus measures and the event-driven nature of the economic crisis make a bear market unlikely, strategists at Goldman Sachs said, recommending using any dips to buy equities. Instead of fearing bear territory, they said in a note that the market is in the early stages of a bull phase following an “explosive” valuations-led rebound in stocks that tends to start in recession and marks the start of a new cycle. Global equities have surged more than 70% since a coronavirus-induced selloff in March last year, reaching a record earlier this month on bets of a vaccine-fueled economic bounce and expanding U.S. stimulus.[Bloomberg]
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US & Asia Overnight from Bloomberg
U.S. equity futures rose Wednesday, buoyed by earnings and hopes for more stimulus, while Asian stocks were mixed. The dollar extended its retreat.
Chinese firms trading in Hong Kong saw the bulk of gains, and the Hang Seng Index approached the 30,000 level, but stocks were lower in Japan. Investors weighed comments suggesting a tough line from Joe Biden’s incoming administration toward China. Nasdaq 100 futures outperformed, with Netflix Inc. surging in after-hours trading as it added more customers than expected.
Treasuries were steady, with the yield on 10-year notes trading around 1.09%. Crude oil advanced and gold edged higher.
Investors are showing signs of returning to the reflation trade, betting that the incoming U.S. administration will use its legislative firepower to propel economic growth. Still, Janet Yellen encountered early Republican resistance to Biden’s $1.9 trillion Covid-19 relief plan in her confirmation hearing to become Treasury secretary.
Yellen -- who could be confirmed as soon as Thursday -- said that help for the unemployed and small businesses would provide the “biggest bang for the buck.” She urged lawmakers to “act big” in efforts to rescue an economy battered by the coronavirus. She also said the U.S. is prepared to take on China’s “abusive” trade and economic practices, and that the Biden administration won’t pursue a weak dollar.
FTSE 100 Outlook | Trading Signals | Forecast | Prediction | Analysis
I am expecting a bit of upside today as I don't think "they" will let the market tank on Biden's first day in office and inauguration. We saw the S&P defend the 2 hour support yesterday and rise back above the 3800 level for the possible final leg up before we do get a decent slide down late Jan/Feb. The bulls will still be targeting 3900. For the FTSE we held the 6700 level and had a fairly decent climb off that, and that is showing as support again for today with S1 and the key fib here.
To start with we are on a cluster of resistance levels at the 6745 level and we may well get an initial dip down. With the 200ema and the daily pivot at this level then the bulls may have a struggle breaking these first thing. The 30m coral is also red showing a downtrend. Whilst the 2 hour chart remains bullish we have quite a few tests of the moving average support line as the bears have tried to break it yesterday and overnight. That has support at 6720 for the moment.
If we do hold 6700 then we could well get a rise towards R1 and the other key fib at the 6780/6785 level. Should the bulls break above 6792 though then I would look to go long and target the 6850 R3 level. Likewise if the bears were to break below the 6700 level then I will flip short to target 6650 level. Entry for that probably just below the stop to 6685ish.
So bit of a mixed bag, looking for a dip and rise to play out, 6700 to hold, but if not then go for a break lower. Expecting the S&P to but in a bullish shift though and a rise towards R2 at 3832 or higher. 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 live outlook prediction analysis for 20th January 2021

HSBC provided an upwards push to the FTSE 100, climbing 8.5p to 411.5p after Mark Tucker, its chairman, said coronavirus had forced the bank to makes its plan for an operational overhaul more radical, with a particular focus on Asian growth.

AstraZeneca also rose, climbing 60p to £77.22 after Handelsbanken’s analyst Peter Sehested said it was set for the “most dynamic” quarter of the pharmaceutical and biotech stocks covered by the Swedish bank.

But the blue chip index ended the day in the red after Entain plunged 168.5p to £12.45 after US suitor MGM Resorts backed out of a takeover bid. Fellow bookmaker Flutter was knocked as a result, falling 390p to £144.

The FTSE 100 closed down 7.7 points at 6,713.0.

Taking on China

Janet Yellen said the U.S. is prepared to take on China’s “abusive” trade and economic practices, signaling that President-elect Joe Biden’s administration will aim to continue some of Donald Trump’s hard-line policies toward Beijing. China "is undercutting American companies by dumping products, erecting trade barriers and giving illegal subsidies to corporations,” Yellen, Biden’s intended nominee for Treasury secretary, said. Secretary of State Michael Pompeo added to tensions by labelling China’s crackdown on Uighurs a "genocide". Meanwhile in a rare gesture of goodwill toward his successor, Trump said in his farewell address that he wished Biden's administration success; Senate Republican leader Mitch McConnell said the mob that stormed the Capitol was "provoked by the president"; and Biden is planning an immigration overhaul on his first day in the job.

Market Rebound

Asian stocks looked set for a muted start Wednesday after their U.S. peers rebounded from Friday’s selloff and traders parsed the latest earnings reports. The dollar retreated. Futures edged higher in Japan and Australia, though dipped in Hong Kong, which saw strong gains Tuesday. U.S. stocks rose, led by tech shares and small caps. Treasuries were steady, with the yield on 10-year notes around 1.1%. Crude oil advanced and gold was little changed. Netflix surged in after-hours trading as it added more customers than expected.

No Bears

While the risk of a correction in stocks is increasing, stimulus measures and the event-driven nature of the economic crisis make a bear market unlikely, strategists at Goldman Sachs said, recommending using any dips to buy equities. Instead of fearing bear territory, they said in a note that the market is in the early stages of a bull phase following an “explosive” valuations-led rebound in stocks that tends to start in recession and marks the start of a new cycle. Global equities have surged more than 70% since a coronavirus-induced selloff in March last year, reaching a record earlier this month on bets of a vaccine-fueled economic bounce and expanding U.S. stimulus.[Bloomberg]

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US & Asia Overnight from Bloomberg

U.S. equity futures rose Wednesday, buoyed by earnings and hopes for more stimulus, while Asian stocks were mixed. The dollar extended its retreat.

Chinese firms trading in Hong Kong saw the bulk of gains, and the Hang Seng Index approached the 30,000 level, but stocks were lower in Japan. Investors weighed comments suggesting a tough line from Joe Biden’s incoming administration toward China. Nasdaq 100 futures outperformed, with Netflix Inc. surging in after-hours trading as it added more customers than expected.

Treasuries were steady, with the yield on 10-year notes trading around 1.09%. Crude oil advanced and gold edged higher.

Investors are showing signs of returning to the reflation trade, betting that the incoming U.S. administration will use its legislative firepower to propel economic growth. Still, Janet Yellen encountered early Republican resistance to Biden’s $1.9 trillion Covid-19 relief plan in her confirmation hearing to become Treasury secretary.

Yellen -- who could be confirmed as soon as Thursday -- said that help for the unemployed and small businesses would provide the “biggest bang for the buck.” She urged lawmakers to “act big” in efforts to rescue an economy battered by the coronavirus. She also said the U.S. is prepared to take on China’s “abusive” trade and economic practices, and that the Biden administration won’t pursue a weak dollar.

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

I am expecting a bit of upside today as I don't think "they" will let the market tank on Biden's first day in office and inauguration. We saw the S&P defend the 2 hour support yesterday and rise back above the 3800 level for the possible final leg up before we do get a decent slide down late Jan/Feb. The bulls will still be targeting 3900. For the FTSE we held the 6700 level and had a fairly decent climb off that, and that is showing as support again for today with S1 and the key fib here.

To start with we are on a cluster of resistance levels at the 6745 level and we may well get an initial dip down. With the 200ema and the daily pivot at this level then the bulls may have a struggle breaking these first thing. The 30m coral is also red showing a downtrend. Whilst the 2 hour chart remains bullish we have quite a few tests of the moving average support line as the bears have tried to break it yesterday and overnight. That has support at 6720 for the moment.

If we do hold 6700 then we could well get a rise towards R1 and the other key fib at the 6780/6785 level. Should the bulls break above 6792 though then I would look to go long and target the 6850 R3 level. Likewise if the bears were to break below the 6700 level then I will flip short to target 6650 level. Entry for that probably just below the stop to 6685ish.

So bit of a mixed bag, looking for a dip and rise to play out, 6700 to hold, but if not then go for a break lower. Expecting the S&P to but in a bullish shift though and a rise towards R2 at 3832 or higher. 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

Keep up to date with new content, free sign up below

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