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Dow suffers sharpest points-drop in history | FTSE follows it down | 7455 support | 6675 resistance

#1 · 28th February 2020, 10:10 am

Quote from Nick on 28th February 2020, 10:10 am
FTSE 100 live outlook prediction analysis for 28th February 2020
Dow Jones suffers sharpest points-drop in history amid coronavirus fears
Stock markets in the US and Europe plunged into correction territory on Thursday as panic over the spread of coronavirus triggered a wave of fresh sell-offs.
On Wall Street, the Dow Jones recorded its biggest one-day point drop ever, closing down 1,191 points at 25,760, while in London the FTSE 100 dropped another 3.5pc to 6796.4. The blue chip index’s fall wiped £62bn off the value of British blue-chip companies, hitting millions of savers’ pensions, and dragging the index into a correction, meaning it is now more than 10pc down from recent highs. The American Dow, pan-European Stoxx 600 and French and German markets all entered corrections too in another brutal day of selling.
Markets spent weeks pushing upwards despite concerns about the China-centred outbreak’s impact on the global economy. But the virus’s rapid spread into Italy this week broke the morale of Western investors, who have been brutally selling off since the weekend.
US shares plummeted from recent highs as Wall Street’s investment banking giants slashed their outlooks for corporate growth in the coming year. The Dow Jones has shed 12pc – or almost 3,600 points – this week alone.
Meanwhile, the International Monetary Fund said it is likely to cut global growth forecasts. A spokesman said: “Clearly the virus is going to have an impact on growth.” European Central Bank chief Christine Lagarde told the Financial Times her organisation is monitoring the virus but it is too early to know if the outbreak will cause a long-lasting economic shock.
More than $300bn (£233bn) was wiped off the value of European shares during the trading session, with the Stoxx 600 suffering its second biggest daily fall since the Brexit referendum in 2016. The index was at record highs last week, but dropped sharply on Monday and Tuesday. Markets bounced back slightly on Wednesday before resuming their plunge yesterday.
Traders are piling into safe-haven assets to protect their money, with gold edging up and the yield on US 10-year government bonds – which falls when demand is higher – hitting a new all-time low.
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FTSE 100 Outlook | Trading Signals | Forecast | Prediction | Analysis
Well, when we hit 6942 yesterday and went short I didn't think less than 24 hours later it would be at 6530! As I write this we are on S1 and also the bottom of the 10 day Raff here at 6530 so I am thinking we might see a bit of a bounce from here to regain some of the ground lost overnight, and back test the fib support level at 6671, though with the current backdrop we may not manage to get that high. We are certainly still on a path lower while there are so many unknowns with regard to the virus. Amazing to think we were at record highs last week and in a week its all changed. The markets are very fickle things!
With it being a Friday and the current backdrop today is also likely to remain tricky so not too much analysis is really applicable. However I am thinking that we get an early rise if 6530 is defended but then if we do drop off again I am looking at a drop down to the daily support at 6450 if the bears come back at it. Below that there is S2 at 6413, with S3 down at 6210! Don't think we get that low though but you never know - that would be a -500 day for the FTSE if we got that low, so not very likely.
We have also broken below the 20 day Raff channel overnight, so may well also see a backtest of that - 6590 for that level. Still short the rallies really.
The S&P is also on S1 as I write this at 2900, and also the bottom of the 10 day Raff as well. As such, we may well see a short term technical bounce on that from this level. Can it bounce 100 to hit the daily pivot at 2999 though!? If S1 breaks then we are probably going to drop to 2832.
So, stay nimble today and remember capital preservation is key. Rise and dip today I am thinking watch 6450 for the next major support (as major as they can be with the current backdrop). I don't think many will want to hold a long over the weekend, so may well see further sells towards the end of the day. Unless those that need to know expect an announcement over the weekend of course about a cure/vaccination.....
Good luck and have a great weekend.
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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.
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FTSE 100 live outlook prediction analysis for 28th February 2020

Dow Jones suffers sharpest points-drop in history amid coronavirus fears
Stock markets in the US and Europe plunged into correction territory on Thursday as panic over the spread of coronavirus triggered a wave of fresh sell-offs.

On Wall Street, the Dow Jones recorded its biggest one-day point drop ever, closing down 1,191 points at 25,760, while in London the FTSE 100 dropped another 3.5pc to 6796.4. The blue chip index’s fall wiped £62bn off the value of British blue-chip companies, hitting millions of savers’ pensions, and dragging the index into a correction, meaning it is now more than 10pc down from recent highs. The American Dow, pan-European Stoxx 600 and French and German markets all entered corrections too in another brutal day of selling.

Markets spent weeks pushing upwards despite concerns about the China-centred outbreak’s impact on the global economy. But the virus’s rapid spread into Italy this week broke the morale of Western investors, who have been brutally selling off since the weekend.

US shares plummeted from recent highs as Wall Street’s investment banking giants slashed their outlooks for corporate growth in the coming year. The Dow Jones has shed 12pc – or almost 3,600 points – this week alone.

Meanwhile, the International Monetary Fund said it is likely to cut global growth forecasts. A spokesman said: “Clearly the virus is going to have an impact on growth.” European Central Bank chief Christine Lagarde told the Financial Times her organisation is monitoring the virus but it is too early to know if the outbreak will cause a long-lasting economic shock.

More than $300bn (£233bn) was wiped off the value of European shares during the trading session, with the Stoxx 600 suffering its second biggest daily fall since the Brexit referendum in 2016. The index was at record highs last week, but dropped sharply on Monday and Tuesday. Markets bounced back slightly on Wednesday before resuming their plunge yesterday.

Traders are piling into safe-haven assets to protect their money, with gold edging up and the yield on US 10-year government bonds – which falls when demand is higher – hitting a new all-time low.

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

Well, when we hit 6942 yesterday and went short I didn't think less than 24 hours later it would be at 6530! As I write this we are on S1 and also the bottom of the 10 day Raff here at 6530 so I am thinking we might see a bit of a bounce from here to regain some of the ground lost overnight, and back test the fib support level at 6671, though with the current backdrop we may not manage to get that high. We are certainly still on a path lower while there are so many unknowns with regard to the virus. Amazing to think we were at record highs last week and in a week its all changed. The markets are very fickle things!

With it being a Friday and the current backdrop today is also likely to remain tricky so not too much analysis is really applicable. However I am thinking that we get an early rise if 6530 is defended but then if we do drop off again I am looking at a drop down to the daily support at 6450 if the bears come back at it. Below that there is S2 at 6413, with S3 down at 6210! Don't think we get that low though but you never know - that would be a -500 day for the FTSE if we got that low, so not very likely.

We have also broken below the 20 day Raff channel overnight, so may well also see a backtest of that - 6590 for that level. Still short the rallies really.

The S&P is also on S1 as I write this at 2900, and also the bottom of the 10 day Raff as well. As such, we may well see a short term technical bounce on that from this level. Can it bounce 100 to hit the daily pivot at 2999 though!? If S1 breaks then we are probably going to drop to 2832.

So, stay nimble today and remember capital preservation is key. Rise and dip today I am thinking watch 6450 for the next major support (as major as they can be with the current backdrop). I don't think many will want to hold a long over the weekend, so may well see further sells towards the end of the day. Unless those that need to know expect an announcement over the weekend of course about a cure/vaccination.....

Good luck and have a great weekend.

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

Keep up to date with new content, free sign up below

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