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Bulls need to defend 6920 | 6886 below | 6986 7020 resistance | Earnings & US CPI

#1 · 10th October 2022, 10:51 am

Quote from Nick on 10th October 2022, 10:51 am
FTSE100 Analysis | Signals | Forecast | Prediction | FTSE 100 Outlook | Trading help
Stocks slipped in Asia on Monday after a surprise drop in U.S. unemployment quashed any thought of a pivot on policy tightening ahead of a reading on inflation which is expected to see core prices move higher again.
Shares tumbled Monday amid intensifying concern over rising global interest rates and as Chinese investors returned from a week-long holiday to tighter restrictions on American technology.
A gauge of Asian equities dropped by more than 1%, led by tech stocks in Hong Kong, while US futures also slid. A rebound in Covid cases in China added to the downbeat tone. Commodities declined as traders weighed mounting risks to economic growth.
Geopolitical tensions added to the uncertainty as markets waited to see how the Kremlin might respond to the blast that hit Russia’s only bridge to Crimea.
Holidays in Japan and South Korea made for thin trading in Asia, while the Treasury market is also shut on Monday.
S&P 500 futures led the early action with a drop of 0.4%, while Nasdaq futures fell 0.5% ahead of the start of Q3 earnings later this week.
EUROSTOXX 50 futures lost 0.8%, while FTSE futures dipped 0.4%.
China’s semiconductor index fell more than 5% after Washington published a sweeping set of export controls, including a measure to cut China off from certain semiconductor chips made anywhere in the world with U.S. equipment.
Wall Street sank on Friday after an upbeat payrolls report seemed to seal the deal on another outsized rate hike from the Federal Reserve.
Futures imply a more than 80% chance of rates rising by 75 basis points next month, while the European Central Bank (ECB) is expected to match that and the Bank of England to hike by at least 100 basis points.
Headline consumer price inflation is seen slowing a touch to an annual 8.1%, but the core measure is forecast to accelerate to 6.5% from 6.3%. The U.S. CPI data will be released on Thursday at 8:30 am ET (1230 GMT).
Minutes of the Fed’s last policy meeting are also out this week and are likely to sound hawkish given how many policy makers lifted their dot plot forecasts for rates.
Earnings
Wall Street also faces a testing time on corporate earnings with the major banks kicking off the season on Friday, including JPMorgan, Citi, Wells Fargo and Morgan Stanley.
FTSE100 live outlook prediction analysis for 10th October 2022
The bulls defended the 6960 level well on Friday however the futures have dropped back and that brings the next support level at 6920 into play. We may well get a rise and dip play out today for a but of bull Monday this morning though if we see 6920 hold.
As I write this we are just double bottom'ing with the overnight low at 6936 though so may see the bulls appear a bit sooner. Either way, the bulls will be aiming to get a rise towards the daily pivot under way, at the 6985 level. We may well see a stutter here as we also have the 30m 200ema at this level.
Above that the the 7020 level looks decent resistance as we have the now bullish 2h chart showing both the red coral, and the Hull MA here and as such this level is worth a short - possibly for a bear Tuesday tomorrow.
We have the US CPI out on Thursday so may well see a rise as we head towards that - buy the rumour sell the news once again. We are also coming into earnings season starting on Friday. Earnings will likely be poor and estimates will come down but will be better than feared.
For the bears, they will be looking to break below the 6920 support as that would allow a trip down to the next daily support at the 6862, along with S3 at 6886. If we were to see that area today then I am thinking it would probably hold as that could align with S&P support at the 3600 level.
S&P500
As with the FTSE100, I am thinking a rise and dip today and would like to see the 3920 level hold initially. Below that then the 3960 level as mentioned is next up. The bulls really need to be quick out the blocks on this today, to get a rise back towards the 3700 level. In an ideal world a test of the 3720 level today would be good, and then above that we have the 2h levels both at 3764 for resistance (though slowly moving down so possibly around the 3755ish area by the time they get tested). A short off these would also make sense.
So, good luck today, lets see if we get a rise and dip play out.
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If you would like more detailed analysis for FTSE100, 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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FTSE100 Analysis | Signals | Forecast | Prediction | FTSE 100 Outlook | Trading help

Stocks slipped in Asia on Monday after a surprise drop in U.S. unemployment quashed any thought of a pivot on policy tightening ahead of a reading on inflation which is expected to see core prices move higher again.

Shares tumbled Monday amid intensifying concern over rising global interest rates and as Chinese investors returned from a week-long holiday to tighter restrictions on American technology.

A gauge of Asian equities dropped by more than 1%, led by tech stocks in Hong Kong, while US futures also slid. A rebound in Covid cases in China added to the downbeat tone. Commodities declined as traders weighed mounting risks to economic growth.

Geopolitical tensions added to the uncertainty as markets waited to see how the Kremlin might respond to the blast that hit Russia’s only bridge to Crimea.

Holidays in Japan and South Korea made for thin trading in Asia, while the Treasury market is also shut on Monday.

S&P 500 futures led the early action with a drop of 0.4%, while Nasdaq futures fell 0.5% ahead of the start of Q3 earnings later this week.

EUROSTOXX 50 futures lost 0.8%, while FTSE futures dipped 0.4%.

China’s semiconductor index fell more than 5% after Washington published a sweeping set of export controls, including a measure to cut China off from certain semiconductor chips made anywhere in the world with U.S. equipment.

Wall Street sank on Friday after an upbeat payrolls report seemed to seal the deal on another outsized rate hike from the Federal Reserve.

Futures imply a more than 80% chance of rates rising by 75 basis points next month, while the European Central Bank (ECB) is expected to match that and the Bank of England to hike by at least 100 basis points.

Headline consumer price inflation is seen slowing a touch to an annual 8.1%, but the core measure is forecast to accelerate to 6.5% from 6.3%. The U.S. CPI data will be released on Thursday at 8:30 am ET (1230 GMT).

Minutes of the Fed’s last policy meeting are also out this week and are likely to sound hawkish given how many policy makers lifted their dot plot forecasts for rates.

Earnings
Wall Street also faces a testing time on corporate earnings with the major banks kicking off the season on Friday, including JPMorgan, Citi, Wells Fargo and Morgan Stanley.

FTSE100 live outlook prediction analysis for 10th October 2022

The bulls defended the 6960 level well on Friday however the futures have dropped back and that brings the next support level at 6920 into play. We may well get a rise and dip play out today for a but of bull Monday this morning though if we see 6920 hold.

As I write this we are just double bottom'ing with the overnight low at 6936 though so may see the bulls appear a bit sooner. Either way, the bulls will be aiming to get a rise towards the daily pivot under way, at the 6985 level. We may well see a stutter here as we also have the 30m 200ema at this level.

Above that the the 7020 level looks decent resistance as we have the now bullish 2h chart showing both the red coral, and the Hull MA here and as such this level is worth a short - possibly for a bear Tuesday tomorrow.

We have the US CPI out on Thursday so may well see a rise as we head towards that - buy the rumour sell the news once again. We are also coming into earnings season starting on Friday. Earnings will likely be poor and estimates will come down but will be better than feared.

For the bears, they will be looking to break below the 6920 support as that would allow a trip down to the next daily support at the 6862, along with S3 at 6886. If we were to see that area today then I am thinking it would probably hold as that could align with S&P support at the 3600 level.

S&P500
As with the FTSE100, I am thinking a rise and dip today and would like to see the 3920 level hold initially. Below that then the 3960 level as mentioned is next up. The bulls really need to be quick out the blocks on this today, to get a rise back towards the 3700 level. In an ideal world a test of the 3720 level today would be good, and then above that we have the 2h levels both at 3764 for resistance (though slowly moving down so possibly around the 3755ish area by the time they get tested). A short off these would also make sense.

So, good luck today, lets see if we get a rise and dip play out.

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 FTSE100, 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 FTSE100, DAX40, Gold and S&P500.
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