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Can the bulls push on | 7105 7180 resistance | 7040 7007 6960 support

#1 · 6th October 2022, 9:54 am

Quote from Nick on 6th October 2022, 9:54 am
FTSE100 Analysis | Signals | Forecast | Prediction | FTSE 100 Outlook | Trading help
FTSE 100 closed at 7,052.62 on Wednesday, FTSE 250 at 17,562.42
Dow Jones closed at 30,273.87, S&P 500 at 3,783.28
Fitch has become the latest ratings agency to lower the credit outlook for British government debt to "negative" from "stable".
"The large and unfunded fiscal package announced as part of the new government's growth plan could lead to a significant increase in fiscal deficits over the medium term," Fitch said last night. Fitch maintained its "AA-" credit rating for Britain, which is one notch lower than S&P's. This morning, the pound is up slightly against the dollar at just above $1.136, a narrow improvement on last night's close at $1.1349.
US equity futures erased a Wednesday decline and an index of Asian stocks traded higher as investors looked beyond the impact of rising oil prices to rekindle a rally in risk assets. Asian shares were cautiously higher on Thursday, while the dollar eased ahead of U.S. non-farm payrolls data, and oil prices gained for a fourth day after deep production cuts pledged by OPEC+ members.
Stocks in Japan and South Korea rose while Australian shares fluctuated and Hong Kong equities edged lower following their best day in six months. The gain in contracts for the S&P 500 reversed a small decline in the index on Wednesday. European futures advanced.
S&P 500 futures advanced 0.6%, and the Nasdaq futures gained 0.9%, building on a late rebound in U.S. stocks which helped limit earlier losses. The S&P 500 finished Wednesday 0.20% lower and the Nasdaq Composite ended down 0.25%.
Mainland Chinese markets remain closed for holidays.
Oil prices rose for a fourth straight day to their highest level since mid-September. Brent crude futures were up 0.6% at $93.9 a barrel while U.S. West Texas Intermediate (WTI) crude futures also gained 0.6% to $88.26 per barrel.
Earlier this week, U.S. economic data suggesting that the labor market and economy were slowing as well as the Reserve Bank of Australia’s surprise move to raise rates by only 25 basis points fuelled hopes of less aggressive interest rate hikes by central banks and lifted risk sentiment.
But those hopes were dashed after a slightly above-forecast report from the Institute for Supply Management showed a rebound in the employment index for the U.S. services sector.
U.S. non-farm payrolls data is due on Friday and analysts polled by Reuters expect 250,000 jobs were added last month and unemployment to come in at 3.7%.
Overnight, San Francisco Federal Reserve President Mary Daly underscored the U.S. central bank’s commitment to curbing inflation with more interest rate hikes, although she also said the Fed will not simply barrel ahead if the economy starts to crack.
Atlanta Fed president Raphael Bostic said the U.S. Federal Reserve’s fight against inflation is likely “still in early days.”
FTSE100 live outlook prediction analysis for 6th October 2022
Buy the dip is certainly the flavour of the month so far in October, and looks set to be the pattern today as well. Initially as I'm writing we are on R1 at 7105 so I would expect a drop down from here to test the first key support at the 7065 level where we have the 30m coral.
Below that then the gap close at 7052 is next up, along with the daily pivot at the 7041 level. As such a long around this 7050 level would make sense. It's possible that we get an overshoot though to test the 2h Hull MA line, which is at 7040 first thing but steadily rising - so should coincide with 7050 depending on how quickly the price drops first thing. This would be the first test of the FTSE100 Hull MA so should in theory bounce, just as the S&P tested its one at 3722 and then climbed well yesterday.
Lower down then the 2h coral is at the 6955 level and would be the next key level of note, just above S2 (S1 is at 6999) and should also see a reaction. The bulls need to keep their bullish momentum going for the moment, but getting the price back above the 7000 level and holding bodes well for a rise towards the next daily resistance level at 7180.
So, initial resistance 7105 as mentioned, then above that the 7148 R2 level, then the daily level 7180. If the bulls were to push past that today then 7212 is R3 but that feels like maybe a bit too far for today, especially as the S&P looks like it might stutter at the 3857 R2 level (which could coincide with 7180 FTSE100).
The news flow negativity has eased a bit as the seasonal early October bounce plays out. We may well get one more drop back as we are just testing the top of the Raff channels before the buying resuming for the Q4 push. I somewhat flippantly mentioned in the chatroom yesterday that a year end close near to 8000 may well play out, and that could well be seen. Feels very optimistic but a strong Q4 may just do it.
Looking for a dip and rise day today really so keep an eye on those support levels for a reaction.
Good luck today.
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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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Daily Analysis pre market open (sent around 7am each day) for FTSE100, DAX40, Gold and S&P500.
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FTSE100 Analysis | Signals | Forecast | Prediction | FTSE 100 Outlook | Trading help

FTSE 100 closed at 7,052.62 on Wednesday, FTSE 250 at 17,562.42
Dow Jones closed at 30,273.87, S&P 500 at 3,783.28

Fitch has become the latest ratings agency to lower the credit outlook for British government debt to "negative" from "stable".

"The large and unfunded fiscal package announced as part of the new government's growth plan could lead to a significant increase in fiscal deficits over the medium term," Fitch said last night. Fitch maintained its "AA-" credit rating for Britain, which is one notch lower than S&P's. This morning, the pound is up slightly against the dollar at just above $1.136, a narrow improvement on last night's close at $1.1349.

US equity futures erased a Wednesday decline and an index of Asian stocks traded higher as investors looked beyond the impact of rising oil prices to rekindle a rally in risk assets. Asian shares were cautiously higher on Thursday, while the dollar eased ahead of U.S. non-farm payrolls data, and oil prices gained for a fourth day after deep production cuts pledged by OPEC+ members.

Stocks in Japan and South Korea rose while Australian shares fluctuated and Hong Kong equities edged lower following their best day in six months. The gain in contracts for the S&P 500 reversed a small decline in the index on Wednesday. European futures advanced.

S&P 500 futures advanced 0.6%, and the Nasdaq futures gained 0.9%, building on a late rebound in U.S. stocks which helped limit earlier losses. The S&P 500 finished Wednesday 0.20% lower and the Nasdaq Composite ended down 0.25%.

Mainland Chinese markets remain closed for holidays.

Oil prices rose for a fourth straight day to their highest level since mid-September. Brent crude futures were up 0.6% at $93.9 a barrel while U.S. West Texas Intermediate (WTI) crude futures also gained 0.6% to $88.26 per barrel.

Earlier this week, U.S. economic data suggesting that the labor market and economy were slowing as well as the Reserve Bank of Australia’s surprise move to raise rates by only 25 basis points fuelled hopes of less aggressive interest rate hikes by central banks and lifted risk sentiment.

But those hopes were dashed after a slightly above-forecast report from the Institute for Supply Management showed a rebound in the employment index for the U.S. services sector.

U.S. non-farm payrolls data is due on Friday and analysts polled by Reuters expect 250,000 jobs were added last month and unemployment to come in at 3.7%.

Overnight, San Francisco Federal Reserve President Mary Daly underscored the U.S. central bank’s commitment to curbing inflation with more interest rate hikes, although she also said the Fed will not simply barrel ahead if the economy starts to crack.

Atlanta Fed president Raphael Bostic said the U.S. Federal Reserve’s fight against inflation is likely “still in early days.”

FTSE100 live outlook prediction analysis for 6th October 2022

Buy the dip is certainly the flavour of the month so far in October, and looks set to be the pattern today as well. Initially as I'm writing we are on R1 at 7105 so I would expect a drop down from here to test the first key support at the 7065 level where we have the 30m coral.

Below that then the gap close at 7052 is next up, along with the daily pivot at the 7041 level. As such a long around this 7050 level would make sense. It's possible that we get an overshoot though to test the 2h Hull MA line, which is at 7040 first thing but steadily rising - so should coincide with 7050 depending on how quickly the price drops first thing. This would be the first test of the FTSE100 Hull MA so should in theory bounce, just as the S&P tested its one at 3722 and then climbed well yesterday.

Lower down then the 2h coral is at the 6955 level and would be the next key level of note, just above S2 (S1 is at 6999) and should also see a reaction. The bulls need to keep their bullish momentum going for the moment, but getting the price back above the 7000 level and holding bodes well for a rise towards the next daily resistance level at 7180.

So, initial resistance 7105 as mentioned, then above that the 7148 R2 level, then the daily level 7180. If the bulls were to push past that today then 7212 is R3 but that feels like maybe a bit too far for today, especially as the S&P looks like it might stutter at the 3857 R2 level (which could coincide with 7180 FTSE100).

The news flow negativity has eased a bit as the seasonal early October bounce plays out. We may well get one more drop back as we are just testing the top of the Raff channels before the buying resuming for the Q4 push. I somewhat flippantly mentioned in the chatroom yesterday that a year end close near to 8000 may well play out, and that could well be seen. Feels very optimistic but a strong Q4 may just do it.

Looking for a dip and rise day today really so keep an eye on those support levels for a reaction.

Good luck today.

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