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Bulls need to defend 7570 now | 7520 below | 7625 7688 resistance | Inflation hit a fresh 30-year high in January

#1 · 16th February 2022, 10:26 am

Quote from Nick on 16th February 2022, 10:26 am
FTSE 100 Analysis | Signals | Forecast | Prediction | FTSE 100 Outlook | Trading help

We got 0.8% rise on the FTSE 100 yesterday, which rebounded following Monday’s sell-off as fears of an imminent conflict between Russia and Ukraine eased, as the bulls managed to break through the 7600 level and have also held it overnight.

London’s top index slightly lagged its European neighbours yesterday, but is the continent’s standout – not that that means very much – for the year so far, up 3pc while most major peers are in the red.

Stocks rose Wednesday and crude oil held a drop as traders weighed the prospect of diminishing tension over Ukraine as well as the risk of further twists after Russia said it was withdrawing some forces.

Shares were up in Japan, Hong Kong and China, where slowing inflation is boosting the central bank’s scope to ease policy to prop up growth. U.S. contracts fell after tech stocks helped the S&P 500 snap three days of losses.

Russia announced a partial pullback of thousands of troops massed near the Ukrainian border and appeared to favor a diplomatic solution to the crisis there. President Joe Biden said the U.S. has yet to verify Moscow’s claims and an invasion remains possible, which the Kremlin has repeatedly denied.

Oil was around $92 a barrel as traders reassessed worries about potential disruptions to commodity supplies. Havens like longer-maturity Treasuries and gold that sold off in past 24 hours largely maintained those losses.

At the same time, other parts of global markets are flashing ongoing nervousness. Volatility gauges for both the S&P 500 and the Treasury market are sitting significantly above 12-month averages, a sign that traders remain on edge about risks such as the Ukraine standoff.

The latest data from China showed elevated but easing factory-gate inflation, raising tentative hopes that the manufacturing powerhouse could help to curb global price pressures if the trend continues. For now, investors are continuing to fret about escalating costs and the likelihood of tightening monetary policy in places like the U.S. and Europe.

Threat Remains
U.S. President Joe Biden said it remains possible that Russia will invade Ukraine because its troops are still in a “threatening position,” after the Russian defense ministry signaled it was withdrawing some of the soldiers massed on the border. Biden and his team have sought to deter a Russian invasion, which would plunge Europe into its biggest security crisis in decades. Biden said the U.S. stood ready to respond to a Russian attack with crippling economic sanctions, but warned they could hurt U.S. consumers at the gas pump.

FTSE 100 live outlook prediction analysis for 16th February 2022

We are coming into the seasonally stronger period now and having had the wobble earlier this month, freaked out retail to the point that lots have pulled money out of funds, namely Baillie Gifford*, we should see a climb start to play out.

Overnight the bulls have held onto the 7600 level and the S&P has stabilised and formed a base around the 4460 level. As such we may well see a rise towards the 7688 daily resistance level, and the 4526 R2 area on the S&P today. The key though will be the bulls defending any drops today and to that end the main support to start with is from the 2 hour which is now bullish and has 7567 as Hull moving average support. That also ties in with the daily pivot at the 7565 level and just below a backtest of the previous resistance at 7578.

I am looking for the bulls to defend this area if we drop down there. A break of that however and we will likely slip down to the S1 and key fib at 7519, along with that previous support at 7513. A break of the 7565 will actually be quite bearish and will upset the apple cart (and probably delay the seasonal strength for end of Feb).

A break of the 4440 S&P support will also likely lead to a test of the 4420 level which is Hull moving average support on the 2h chart.

For the FTSE bulls, a rise towards the 7688 level would fit well, as we have R2 and daily resistance here so that looks fairly key for the bulls today, if they can break above the key fib resistance to start with at 7625. As such we could see an early stutter here, though with the ASX200 (Australia) putting in a decent bullish session today we should follow suit. That said, the ASX200 is just testing the red coral on the daily at 7275 so they need to push past this for further upside (it was this resistance line they dropped off at 7340 last Wednesday).

Above the 7688 level then 7715 is next up for daily level of note. Both the Raffs are back heading up and the picture isn't looking quite as bearish as it was. The FTSE100 has certainly started the year strongly, and much better than other markets.

So looking for a bit of a dip and rise to play out and hopefully the bulls defend the 7570 area for support.

Good luck today.

*Investors pulled a record amount out of Baillie Gifford’s UK-based funds as tech stocks plunged last month, new data shows.
The Edinburgh-based fund house lost a total of 10pc from its UK funds in January, taking the total down to £56bn, data from research firm Morningstar showed. While most of this was due to poor performance, Baillie Gifford also suffered a rare month of outflows, with clients withdrawing a net £875m, according to the data.

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

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

We got 0.8% rise on the FTSE 100 yesterday, which rebounded following Monday’s sell-off as fears of an imminent conflict between Russia and Ukraine eased, as the bulls managed to break through the 7600 level and have also held it overnight.

London’s top index slightly lagged its European neighbours yesterday, but is the continent’s standout – not that that means very much – for the year so far, up 3pc while most major peers are in the red.

Stocks rose Wednesday and crude oil held a drop as traders weighed the prospect of diminishing tension over Ukraine as well as the risk of further twists after Russia said it was withdrawing some forces.

Shares were up in Japan, Hong Kong and China, where slowing inflation is boosting the central bank’s scope to ease policy to prop up growth. U.S. contracts fell after tech stocks helped the S&P 500 snap three days of losses.

Russia announced a partial pullback of thousands of troops massed near the Ukrainian border and appeared to favor a diplomatic solution to the crisis there. President Joe Biden said the U.S. has yet to verify Moscow’s claims and an invasion remains possible, which the Kremlin has repeatedly denied.

Oil was around $92 a barrel as traders reassessed worries about potential disruptions to commodity supplies. Havens like longer-maturity Treasuries and gold that sold off in past 24 hours largely maintained those losses.

At the same time, other parts of global markets are flashing ongoing nervousness. Volatility gauges for both the S&P 500 and the Treasury market are sitting significantly above 12-month averages, a sign that traders remain on edge about risks such as the Ukraine standoff.

The latest data from China showed elevated but easing factory-gate inflation, raising tentative hopes that the manufacturing powerhouse could help to curb global price pressures if the trend continues. For now, investors are continuing to fret about escalating costs and the likelihood of tightening monetary policy in places like the U.S. and Europe.

Threat Remains
U.S. President Joe Biden said it remains possible that Russia will invade Ukraine because its troops are still in a “threatening position,” after the Russian defense ministry signaled it was withdrawing some of the soldiers massed on the border. Biden and his team have sought to deter a Russian invasion, which would plunge Europe into its biggest security crisis in decades. Biden said the U.S. stood ready to respond to a Russian attack with crippling economic sanctions, but warned they could hurt U.S. consumers at the gas pump.

FTSE 100 live outlook prediction analysis for 16th February 2022

We are coming into the seasonally stronger period now and having had the wobble earlier this month, freaked out retail to the point that lots have pulled money out of funds, namely Baillie Gifford*, we should see a climb start to play out.

Overnight the bulls have held onto the 7600 level and the S&P has stabilised and formed a base around the 4460 level. As such we may well see a rise towards the 7688 daily resistance level, and the 4526 R2 area on the S&P today. The key though will be the bulls defending any drops today and to that end the main support to start with is from the 2 hour which is now bullish and has 7567 as Hull moving average support. That also ties in with the daily pivot at the 7565 level and just below a backtest of the previous resistance at 7578.

I am looking for the bulls to defend this area if we drop down there. A break of that however and we will likely slip down to the S1 and key fib at 7519, along with that previous support at 7513. A break of the 7565 will actually be quite bearish and will upset the apple cart (and probably delay the seasonal strength for end of Feb).

A break of the 4440 S&P support will also likely lead to a test of the 4420 level which is Hull moving average support on the 2h chart.

For the FTSE bulls, a rise towards the 7688 level would fit well, as we have R2 and daily resistance here so that looks fairly key for the bulls today, if they can break above the key fib resistance to start with at 7625. As such we could see an early stutter here, though with the ASX200 (Australia) putting in a decent bullish session today we should follow suit. That said, the ASX200 is just testing the red coral on the daily at 7275 so they need to push past this for further upside (it was this resistance line they dropped off at 7340 last Wednesday).

Above the 7688 level then 7715 is next up for daily level of note. Both the Raffs are back heading up and the picture isn't looking quite as bearish as it was. The FTSE100 has certainly started the year strongly, and much better than other markets.

So looking for a bit of a dip and rise to play out and hopefully the bulls defend the 7570 area for support.

Good luck today.

*Investors pulled a record amount out of Baillie Gifford’s UK-based funds as tech stocks plunged last month, new data shows.
The Edinburgh-based fund house lost a total of 10pc from its UK funds in January, taking the total down to £56bn, data from research firm Morningstar showed. While most of this was due to poor performance, Baillie Gifford also suffered a rare month of outflows, with clients withdrawing a net £875m, according to the data.

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