Quote from Nick on 21st March 2022, 10:14 am

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

Oil prices rose and stock markets were stable to slightly higher on Friday at the end of a week of high volatility related to the war in Ukraine. After trading in negative territory most of the day, European stock markets turned higher at the close, shrugging off concerns about aggressive monetary tightening by different central banks around the world, sky-high inflation and soaring commodity prices. The FTSE 100 closed 0.3pc higher at 7,404.

U.S. equity futures and stocks slipped Monday as crude oil jumped and investors monitored diplomatic efforts to bring an end to Russia’s almost month-old war in Ukraine.

Shares dropped in China, Hong Kong and South Korea, where data signaled a rising energy-import bill and easing export growth. S&P 500, Nasdaq 100 and European contracts retreated. Overall, the moves pointed to a pause in global equities after their best weekly performance since 2020.

West Texas Intermediate oil rose past $108 a barrel as investors assessed the war as well as Middle East tension. Australia’s ban on exports of alumina to Russia sparked an advance in aluminum. A gauge of the dollar climbed.

Russia is pressing on with its invasion of Ukraine, which has stoked inflation by pushing up the price of key commodities such as oil and wheat. Turkey said Moscow and Kyiv are moving closer in talks toward a cease-fire.

The bond market continues to flash caution about risks from the war and rising U.S. interest rates. The Treasury yield curve is flattening, and portions are inverted, which for some is an indicator of a looming economic slowdown. Treasury futures fell. There’s no cash trading in Asia due to a Japan holiday.

A key question is whether last week’s stock rebound and moderation in volatility are durable. China’s vow to support its markets and economy is helping, though the wait for more easing continues after Chinese banks left borrowing costs unchanged.

FTSE 100 live outlook prediction analysis for 21st March 2022

Can the bulls follow through on Fridays rise for a bull Monday? We managed to test the 7450 daily resistance level after hours and have gapped down this morning after a weaker Asian session but are hovering around Fridays close of 7404 as I write this. As such we may well see the bulls try for that 7450 level again this morning, and if so we may well see a drop off here.

Initial resistance is slightly lower though at 7440 with the key fib here. If the bulls were able to break above the 7450 level then 7479 is the red daily coral and would be the first test since it changed to bearish - as such this should provide some decent resistance and it's worth s short here.

Above that then bulls will be looking to 7500 as we have R1 just below this and of course its the round number. As the war rumbles on unfortunately, with even hypersonic weapons now being used by Russia, China have inferred that they “will do everything” to de-escalate the war in Ukraine.

On the support side of things, then 7400 will provide some support initially, and we may get a rise of this to start with, though below this then S1 is at 7358 and will probably get seen if the bears have their way. Ultimately today I am thinking that we get a drop down to the key fib at 7334. We also have the green 2h coral here, so I would expect a bit of a reaction, though how far a bounce may run depends a lot on sentiment at the moment.

Below 7333 the bears will have 7311 (200ema 30m) in their sights and a potential break of 7300. That seems rather pessimistic for today though as the markets are holding up pretty well against the current back drop and after the rate rises last week.

We have the "mini budget" on Wednesday and the chancellors Spring statement and there are rumblings of measures to help the cost of living "crisis", including a fuel duty cut. Ministers are understood to be considering plans to wipe out the 1.25 percentage point National Insurance (NI) tax rise for low earners by raising the threshold above which it is paid. There was speculation at the weekend that officials have been studying similar changes to income tax thresholds and allowances.

For the S&P I think we will also see a dip and rise and with it sitting below Fridays gap at 4473 we may well see any dip get bought up to target that level. The daily S&P chart is on the cusp of going bullish as well, and would lock in 4350 as support if we have a decent show from the bulls today. Nearer term the 4410 level is the Hull MA support on the 2h chart and a level that I would like to see the bulls appear at for a push higher later today.

So, dip and rise may well play out today, watch the 7350, 7333 and 7311 levels for support; 7450 and 7500 for resistance.

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