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Decent start to October with strong Q4 on the cards | 7023 7113 resistance | 6930 6872 support

#1 · 4th October 2022, 9:54 am

Quote from Nick on 4th October 2022, 9:54 am
FTSE100 Analysis | Signals | Forecast | Prediction | FTSE 100 Outlook | Trading help
Stocks in Asia and US equity futures extended their gains as weak US manufacturing data eased bets on the Federal Reserve’s hawkishness. The Australian dollar dropped after the nation’s central bank delivered a smaller-than-expected rate hike. Asian stocks were also helped after Britain scrapped bits of a controversial tax cut plan, tentatively improving global market sentiment and rallying bonds and the pound.
An Asia Pacific equity benchmark rose by more than 1.6% and is on course for the highest in a week, sparked by a broad rebound in the region, with investors appearing to shrug off news that North Korea fired a missile over Japan for the first time since 2017.
In trade thinned by holidays in China and Hong Kong, MSCI’s broadest index of Asia-Pacific shares outside Japan rose 1%, led by a 2.5% gain in Australia. Japan’s Nikkei rose 2.6%. Sterling drifted up to an almost two-week high of $1.1343, making for a bounce now of almost 10% from a record low hit last week after plans for unfunded tax cuts unleashed chaos on British assets.
S&P 500 futures rose 0.6%, following a 2.6% bounce for the index overnight.
British Finance Minister Kwasi Kwarteng released a statement reversing planned tax cuts for top earners. It makes up only 2 billion out of a planned 45 billion pounds of unfunded tax cuts that had sent the gilt market into a tailspin last week.
Kwasi Kwarteng is considering publishing his debt-reduction proposals by the end of this month, the Treasury said. The medium-term fiscal plan was due to be unveiled on November 23, but a Treasury spokesman said work had been sped up and it was set to be published earlier. In his speech to the Tory conference on Monday, the Chancellor said it would be published "shortly".
The recovery for sterling has settled some nerves in the currency market, though the persistent strength of the dollar still holds a lot of major currencies near milestone lows and has authorities throughout Asia on edge.
Japan’s yen, for example hit 145 to the dollar on Monday - a level that prompted official intervention last week - and was last at 144.71. The euro was at $0.9823, about three cents stronger than last week’s 20-year trough.
Treasuries rallied in sympathy with gilts overnight and the benchmark 10-year yield dropped 15 basis points. It was steady in Asia at 3.6387%, having briefly poked above 4% last week.
Other indicators of market stress abound. The CBOE Volatility Index remains elevated and above 30. Shares and bonds of Credit Suisse hit record lows on Monday as worry about the bank’s restructuring plans swept markets.
Oil held overnight gains on news of possible production cuts, and Brent futures were last up 43 cents to $89.29 a barrel.
New Limits
The Biden administration plans to announce new restrictions on China’s access to US semiconductor technology, in an escalation of Washington’s efforts to stifle Beijing’s industrial ambitions. The Commerce Department will roll out a package of rules this week to govern which of the technologies can be exported to China, sources say. The US has been increasingly focused on limiting access to high-end semiconductor technology, and boosting its own domestic production capacity.
FTSE100 live outlook prediction analysis for 4th October 2022
A decent bull Monday yesterday as the new month money came in after the initial dip down. That dip only managed 6800 and we have now gained 150 points since. The ASX200 had a bullish Tuesday and we may well follow suit, though there is the potential for a little dip down to start with as some longs close after the initial month bounce.
October has got off to its strong seasonal start and if that continues we should see Q4 remain fairly strong now. As mentioned previously I still think cable has decent support at the 100-110 area and we have already seen a decent bounce on that from that area. A dip back down as it's now on resistance at 11350 should present another decent buying opportunity.
For the FTSE100 today, we have initial resistance at R1 and where we are as I write this at 6962 so a drop down from here to test the 30m coral and the round number at 6900 before another leg up would fit well. The S&P500 and Dax40 are also on their R1 levels so again lends some weight to a dip and rise.
Above the R1 level then the bull will be looking to crack the 7000 level again, and we have R2 at 7023 - there is a decent chance that we will see this today, as the S&P bulls will also be looking to push on and pull away from the 3700 level.
For the FTSE100 bears, as mentioned then 6900 is the first key support, and then we have the 2h Hull MA below that around the 6850 level. That is also just below the daily pivot at 6872, and just above the key fib support at 6830, so in theory that zone would offer up decent support should it get that low.
Will we get a bear Tuesday? Maybe not today as its been so weak at the end of September the market will be trying for a relief rally to start the month (and of course we have that seasonal October strength). Shorting the rallies played out perfectly for the second half of September, we now need to adjust our mindset to buy the dips for the start of October.
The various 2h charts are bullish now too so keep an eye on 6850 FTSE100, 12000 Dax40, 3635ish S&P500.
Good luck today, and let's see if we get a dip rise dip play out again today.
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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.
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Telegram live trading room and webinar group membership for discussion and realtime trade updates

FTSE100 Analysis | Signals | Forecast | Prediction | FTSE 100 Outlook | Trading help

Stocks in Asia and US equity futures extended their gains as weak US manufacturing data eased bets on the Federal Reserve’s hawkishness. The Australian dollar dropped after the nation’s central bank delivered a smaller-than-expected rate hike. Asian stocks were also helped after Britain scrapped bits of a controversial tax cut plan, tentatively improving global market sentiment and rallying bonds and the pound.

An Asia Pacific equity benchmark rose by more than 1.6% and is on course for the highest in a week, sparked by a broad rebound in the region, with investors appearing to shrug off news that North Korea fired a missile over Japan for the first time since 2017.

In trade thinned by holidays in China and Hong Kong, MSCI’s broadest index of Asia-Pacific shares outside Japan rose 1%, led by a 2.5% gain in Australia. Japan’s Nikkei rose 2.6%. Sterling drifted up to an almost two-week high of $1.1343, making for a bounce now of almost 10% from a record low hit last week after plans for unfunded tax cuts unleashed chaos on British assets.

S&P 500 futures rose 0.6%, following a 2.6% bounce for the index overnight.

British Finance Minister Kwasi Kwarteng released a statement reversing planned tax cuts for top earners. It makes up only 2 billion out of a planned 45 billion pounds of unfunded tax cuts that had sent the gilt market into a tailspin last week.

Kwasi Kwarteng is considering publishing his debt-reduction proposals by the end of this month, the Treasury said. The medium-term fiscal plan was due to be unveiled on November 23, but a Treasury spokesman said work had been sped up and it was set to be published earlier. In his speech to the Tory conference on Monday, the Chancellor said it would be published "shortly".

The recovery for sterling has settled some nerves in the currency market, though the persistent strength of the dollar still holds a lot of major currencies near milestone lows and has authorities throughout Asia on edge.

Japan’s yen, for example hit 145 to the dollar on Monday - a level that prompted official intervention last week - and was last at 144.71. The euro was at $0.9823, about three cents stronger than last week’s 20-year trough.

Treasuries rallied in sympathy with gilts overnight and the benchmark 10-year yield dropped 15 basis points. It was steady in Asia at 3.6387%, having briefly poked above 4% last week.

Other indicators of market stress abound. The CBOE Volatility Index remains elevated and above 30. Shares and bonds of Credit Suisse hit record lows on Monday as worry about the bank’s restructuring plans swept markets.

Oil held overnight gains on news of possible production cuts, and Brent futures were last up 43 cents to $89.29 a barrel.

New Limits
The Biden administration plans to announce new restrictions on China’s access to US semiconductor technology, in an escalation of Washington’s efforts to stifle Beijing’s industrial ambitions. The Commerce Department will roll out a package of rules this week to govern which of the technologies can be exported to China, sources say. The US has been increasingly focused on limiting access to high-end semiconductor technology, and boosting its own domestic production capacity.

FTSE100 live outlook prediction analysis for 4th October 2022

A decent bull Monday yesterday as the new month money came in after the initial dip down. That dip only managed 6800 and we have now gained 150 points since. The ASX200 had a bullish Tuesday and we may well follow suit, though there is the potential for a little dip down to start with as some longs close after the initial month bounce.

October has got off to its strong seasonal start and if that continues we should see Q4 remain fairly strong now. As mentioned previously I still think cable has decent support at the 100-110 area and we have already seen a decent bounce on that from that area. A dip back down as it's now on resistance at 11350 should present another decent buying opportunity.

For the FTSE100 today, we have initial resistance at R1 and where we are as I write this at 6962 so a drop down from here to test the 30m coral and the round number at 6900 before another leg up would fit well. The S&P500 and Dax40 are also on their R1 levels so again lends some weight to a dip and rise.

Above the R1 level then the bull will be looking to crack the 7000 level again, and we have R2 at 7023 - there is a decent chance that we will see this today, as the S&P bulls will also be looking to push on and pull away from the 3700 level.

For the FTSE100 bears, as mentioned then 6900 is the first key support, and then we have the 2h Hull MA below that around the 6850 level. That is also just below the daily pivot at 6872, and just above the key fib support at 6830, so in theory that zone would offer up decent support should it get that low.

Will we get a bear Tuesday? Maybe not today as its been so weak at the end of September the market will be trying for a relief rally to start the month (and of course we have that seasonal October strength). Shorting the rallies played out perfectly for the second half of September, we now need to adjust our mindset to buy the dips for the start of October.

The various 2h charts are bullish now too so keep an eye on 6850 FTSE100, 12000 Dax40, 3635ish S&P500.

Good luck today, and let's see if we get a dip rise dip play out again 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