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Bulls defend but need to hold above 6950 and ideally 7000 | 7058 7099 resistance

#1 · 14th May 2021, 9:18 am

Quote from Nick on 14th May 2021, 9:18 am
FTSE 100 live outlook prediction analysis for 14th May 2021
London’s markets spent the afternoon trying to drag themselves higher after plunging sharply into the red for the second time this week. The FTSE 100 fell as much as 2.5pc early in the day to wipe around £48bn off the combined value of its constituent companies. It touched its lowest level since April 7 by midmorning while all blue-chip stocks were on a downward trajectory. The slide came as inflation fears once again spooked global stock markets, and following Asian markets which reached seven-week lows overnight. Such lows were short-lived, however, with the FTSE 100 closing down a lesser 0.6pc, or 41.3 points, at 6,963.33.

Signs of Strengthening
Stocks in Asia look set to rally after U.S. benchmarks halted a three-day slide, with investors migrating to value from growth companies as signs of a strengthening labor market tempered inflation worries. Futures pointed higher in Japan, Hong Kong and Australia. Treasuries rallied from the prior session’s weakness sparked by stronger-than-expected consumer price inflation data. Bitcoin remains under pressure despite paring losses. Oil slumped the most in over a month as growing inflation concerns raise the specter of a less accommodative Federal Reserve.
Covid Trade-Off
Places like Singapore and Hong Kong, which have achieved astonishing success in containing the virus, now risk being left behind as better-vaccinated cities like New York and London re-open. “Covid Zero” nations have suffered few coronavirus deaths, but eliminating the virus requires stop-start lockdown cycles, near-blanket bans on international travel and strict quarantine policies. As other parts of the world begin to normalize, experts and residents are starting to question whether walling off from Covid is worth the long-term trade-off. Meanwhile, public health officials said fully vaccinated Americans can ditch their masks in most settings, even indoors or in large groups, and U.K. statistics showed the country’s cases of a Covid variant from India more than doubled in the past week.[Bloomberg]
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US & Asia Overnight from Bloomberg
Stocks rebounded Friday and U.S. equity futures rose after Wall Street halted a three-day slide on signs of a strengthening economic recovery that helped soothe some of the concerns about risks from inflation.
MSCI Inc.’s Asia-Pacific share gauge advanced about 1%, led by Japan, bringing some relief after a bruising week in which worries about price pressures sapped equities. S&P 500 and Nasdaq 100 contracts climbed after the indexes gained overnight, with industrial and financial shares outperforming, while energy producers joined a slump in oil.
Treasuries rallied from the prior session’s weakness, with the 10-year yield easing to 1.66% despite a lackluster auction of 30-year bonds. The Federal Reserve tweaked its purchasing plan to focus more on longer-dated Treasuries, while leaving the $80 billion monthly total unchanged.
Tesla Inc. fell after Chief Executive Officer Elon Musk said the electric-car maker is suspending purchases using Bitcoin over environmental concerns. Bitcoin pared some of the losses sparked by the move to trade around $50,000.
Markets appear to have recovered from a bout of volatility following an unexpectedly sharp increase in the U.S. consumer price index. The latest data reinforced inflation pressures, with producer prices outpacing forecasts, but a drop in jobless claims helped sentiment. Still, global stocks are headed for their biggest weekly drop since February.
Federal Reserve Governor Christopher Waller reiterated the central bank’s view that the economic reopening from the pandemic is driving a temporary surge in price pressures, though they may last through 2022.
FTSE 100 Outlook | Trading Signals | Forecast | Prediction | Analysis
A valiant fight back by the bulls yesterday from the 6830 level, and nice to se the bottom of the Raff channels hold across the board. Was that just a big flushing exercise and we can resume the uptrend? The S&P needs to break 4130 now where we have the 200ema, and if it manages to do so then we should see a rise towards R1 at 4152 and R2 at 4190. Support is at the 30m coral and daily pivot at 4093 though so the bulls will be keen to defend this area, as well as they defended the 4040 Raff area yesterday really.
I am thinking that the strength may well remain today and an opening dip and then subsequent rise to close the week above 7000 may well play out. We have a few supports to start with, namely 6988 for the 25ema on the 30m, then the 30m coral (green) at 6960, then more crucially the daily pivot and 2 hour support at 6930 and 6935 respectively. This lower level needs to hold today for the bulls to stay in the game otherwise we are looking at a slide down towards 6850 again.
The bulls will be looking to target the 7058 level where we have a daily fib level and just below the cam break out today and if they can push past this then R2 at 7099 is possible. Initial resistance is at 7010 though which is the overnight high so this is the initial line in the sand that the bulls need to push past this morning.
As its Friday it can be prudent to be a little bit more cautious but a dip and rise would fit quite well, especially if the S&P manages to push past the 4130 area. Just watch that 6930 area as the major support for today if we reach that.
Have a great weekend.
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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.
What you get
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 14th May 2021

London’s markets spent the afternoon trying to drag themselves higher after plunging sharply into the red for the second time this week. The FTSE 100 fell as much as 2.5pc early in the day to wipe around £48bn off the combined value of its constituent companies. It touched its lowest level since April 7 by midmorning while all blue-chip stocks were on a downward trajectory. The slide came as inflation fears once again spooked global stock markets, and following Asian markets which reached seven-week lows overnight. Such lows were short-lived, however, with the FTSE 100 closing down a lesser 0.6pc, or 41.3 points, at 6,963.33.

Signs of Strengthening

Stocks in Asia look set to rally after U.S. benchmarks halted a three-day slide, with investors migrating to value from growth companies as signs of a strengthening labor market tempered inflation worries. Futures pointed higher in Japan, Hong Kong and Australia. Treasuries rallied from the prior session’s weakness sparked by stronger-than-expected consumer price inflation data. Bitcoin remains under pressure despite paring losses. Oil slumped the most in over a month as growing inflation concerns raise the specter of a less accommodative Federal Reserve.

Covid Trade-Off

Places like Singapore and Hong Kong, which have achieved astonishing success in containing the virus, now risk being left behind as better-vaccinated cities like New York and London re-open. “Covid Zero” nations have suffered few coronavirus deaths, but eliminating the virus requires stop-start lockdown cycles, near-blanket bans on international travel and strict quarantine policies. As other parts of the world begin to normalize, experts and residents are starting to question whether walling off from Covid is worth the long-term trade-off. Meanwhile, public health officials said fully vaccinated Americans can ditch their masks in most settings, even indoors or in large groups, and U.K. statistics showed the country’s cases of a Covid variant from India more than doubled in the past week.[Bloomberg]

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US & Asia Overnight from Bloomberg

Stocks rebounded Friday and U.S. equity futures rose after Wall Street halted a three-day slide on signs of a strengthening economic recovery that helped soothe some of the concerns about risks from inflation.

MSCI Inc.’s Asia-Pacific share gauge advanced about 1%, led by Japan, bringing some relief after a bruising week in which worries about price pressures sapped equities. S&P 500 and Nasdaq 100 contracts climbed after the indexes gained overnight, with industrial and financial shares outperforming, while energy producers joined a slump in oil.

Treasuries rallied from the prior session’s weakness, with the 10-year yield easing to 1.66% despite a lackluster auction of 30-year bonds. The Federal Reserve tweaked its purchasing plan to focus more on longer-dated Treasuries, while leaving the $80 billion monthly total unchanged.

Tesla Inc. fell after Chief Executive Officer Elon Musk said the electric-car maker is suspending purchases using Bitcoin over environmental concerns. Bitcoin pared some of the losses sparked by the move to trade around $50,000.

Markets appear to have recovered from a bout of volatility following an unexpectedly sharp increase in the U.S. consumer price index. The latest data reinforced inflation pressures, with producer prices outpacing forecasts, but a drop in jobless claims helped sentiment. Still, global stocks are headed for their biggest weekly drop since February.

Federal Reserve Governor Christopher Waller reiterated the central bank’s view that the economic reopening from the pandemic is driving a temporary surge in price pressures, though they may last through 2022.

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

A valiant fight back by the bulls yesterday from the 6830 level, and nice to se the bottom of the Raff channels hold across the board. Was that just a big flushing exercise and we can resume the uptrend? The S&P needs to break 4130 now where we have the 200ema, and if it manages to do so then we should see a rise towards R1 at 4152 and R2 at 4190. Support is at the 30m coral and daily pivot at 4093 though so the bulls will be keen to defend this area, as well as they defended the 4040 Raff area yesterday really.

I am thinking that the strength may well remain today and an opening dip and then subsequent rise to close the week above 7000 may well play out. We have a few supports to start with, namely 6988 for the 25ema on the 30m, then the 30m coral (green) at 6960, then more crucially the daily pivot and 2 hour support at 6930 and 6935 respectively. This lower level needs to hold today for the bulls to stay in the game otherwise we are looking at a slide down towards 6850 again.

The bulls will be looking to target the 7058 level where we have a daily fib level and just below the cam break out today and if they can push past this then R2 at 7099 is possible. Initial resistance is at 7010 though which is the overnight high so this is the initial line in the sand that the bulls need to push past this morning.

As its Friday it can be prudent to be a little bit more cautious but a dip and rise would fit quite well, especially if the S&P manages to push past the 4130 area. Just watch that 6930 area as the major support for today if we reach that.

Have a great weekend.

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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