Quote from Nick on 21st November 2018, 11:21 am

21st November 2018

The tech rout on Wall Street soured the mood on markets yesterday, leaving the FTSE 100 on the brink of slipping to an eight-month low. The index survived the worst of the sell-off but lost 52.97 points to close at 6,947.92. It was a volatile day and unfortunate that the short order at 7011 missed by 1 point as we hit 7010.5 and then fell to 6902. That however triggered the long at 6909 which made a very nice gain as the bulls appeared and drove the price to a 6970 high. Overnight we have retested the lows at 6905 and gained some ground to 6950. With a very bearish backdrop I am still looking at 6870ish below 6900, with a possibility that we see 6650 at some point soon. Today however, it looks like we might get a climb back towards 7000, though S1 is at 6873 and may well make an appearance soon (today if it gets bearish).

U.S. stocks plunged Tuesday, on the worst day of an awful year for markets. Sinking oil prices hit energy companies, tech hardware continued to plunge with Apple Inc. leading the way, and retailers saw little joy from the coming Christmas shopping season. Even Treasuries and gold fell. All major equity benchmarks were down more than 1.5 percent. The S&P 500 Index briefly slid 10 percent below its September record close before clawing back just above that threshold. The Nasdaq Composite Index was almost 14 percent below the closing high it reached in August. And the Dow Jones Industrial Average shed more than 550 points, or 2.2 percent, as angst spread across global markets. Investors pointed to escalating trade tensions, signs of a looming slowdown in retail growth and cracks in the credit market as reasons for the decline.

Oil tumbled below $53 a barrel for the first time in a year amid concern OPEC’s plans to cut production won’t be enough to stem a surge in stockpiles. Futures fell more than 7 percent in New York and London. A government report Wednesday may show U.S. crude inventories rose for a ninth straight week

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FTSE 100 Trading Signals, Forecast and Prediction

Was a very bearish day yesterday so we may see a bit of a relief rally today as the bulls continue to defend the 6905 level. We have double bottomed there now and bounced twice, so they will be keen to build on that to target a rise through 7000. The bears however, will be targeting the 6870 level on a break of 6905 and possibly lower as we have that negative sentiment prevalent at the moment. The tech sell off is certainly gathering pace and they have been the main drivers of the US boom in the past few years. If they start to wobble it will drive everything down. Question remains if this is the start of the leg down/recession/correction, or just a pull back in the overall bullish trend. Probably a bit early to start saying recession (still think we should have just let everything go pop in 2008 rather than do all the QE as we would probably have flushed out the rubbish and be in the midst of a healthier economy but that is bye the bye).

Anyway, onto today and I am looking at an initial rise towards the 6980 resistance area where we have R1 and also the key fib at 6985. We may well see a stutter here initially and then a dip back down to the 30min support at 6950, and the daily pivot at 6941. If that area holds then we should see a rise above 7000 today.

Generally I feel cautiously bullish today and buying dips to the 6940 area seems a decent play but looking at 6868 still as a possibility.

As mentioned, if the bears break 6940 then a retest of 6905 looks pretty inevitable. 6868 and 6863 below that so worth a long at this level as I think we will see a bounce here - maybe a repeat of yesterday where the higher support breaks later and we drop right down to the lower one, before a decent rally off it.

Buy the dip today!

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