Quote from Nick on 6th May 2020, 9:45 am

FTSE 100 live outlook prediction analysis for 6th May 2020

Equities rallied as investors cheered a further easing of lockdowns in some countries, which offset fears of a renewed trade war between China and the United States. Oil also rose as the economic outlook seemed to brighten with the markets' peak-to-trough fall now less than half what it was earlier in the crisis. With signs that the spread of coronavirus is easing, governments in Europe and parts of Asia-Pacific as well as some US states have begun to allow businesses to reopen.

London's benchmark index ended 1.66pc higher at 5,849.42 while the domestically-focused FTSE 250 climbed 0.89pc to 16,093.14. Germany’s DAX gained 2.5pc and the Europe-wide Stoxx 600 index rose 2.1pc BP and Royal Dutch Shell are were some of the biggest gainers on the FTSE 100 thanks to the rally in the oil market.

Disease Disagreement

To hear U.S. President Donald Trump and Secretary of State Michael Pompeo tell it, the evidence is clear: The novel coronavirus that has killed more than a quarter million people worldwide likely escaped from the Wuhan Institute of Virology, a laboratory that studies some of the world’s most dangerous pathogens. But the U.S. intelligence community is less convinced, and so too are others. A majority of the 17 agencies that provide and analyze intelligence for the U.S. government believe the pandemic started after the virus was leaked from the Wuhan lab, according to a person familiar with the matter. Others more familiar with the intelligence, however, describe pronounced divisions among and within the agencies, which often look at the same set of facts but come to different interpretations. The case for any possible origin is largely circumstantial, since the U.S. has very little information from the ground to back up the lab-escape theory or any other, they said. On the pandemic front, the U.K.’s coronavirus death toll soared passed that of Italy, making it the worst hit country in Europe. Hong Kong moved to ease restrictions, and the state of Bavaria set out plans to reopen its economy in what may serve as a blueprint for the rest of Germany. Meanwhile, Pfizer administered the first U.S. patients with its experimental vaccine for the virus.[Bloomberg]

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

China’s yuan rose in offshore trading after a slightly stronger-than-anticipated fixing for the domestic exchange rate, while U.S. equity futures erased losses. Stocks in Shanghai recovered to trade flat after opening modestly lower as Chinese traders came back online after a five-day break. Australian shares fell, while Hong Kong and Korean ones advanced. European futures retreated. Oil prices added slightly to recent gains, while the yen climbed to the highest since mid-March, back when markets were roiled by emergency demand for dollar cash.

The FTSE stalled just shy of the 5880 resistance level yesterday and dropped off to test 5790 overnight, but interestingly the 5875 level remains as resistance for today with the key fib and R1 at this level. As that would also then tie in with a double top from yesterday its worth a short again. Initially we have the red 30min coral as I write this with resistance at 5845, so we may well see an initial dip to start things off today. The ASX200 had a dip and rise play out during their Wednesday session and we may well see something similar. If the bulls were able to push past the 5875 level then R2 at 5913 is next up, and if they managed to break that then we should see a retest of the 6000 level. The charts are actually still looking pretty bullish on most time frames, and the FTSE 100 is being helped by oil recovering over the past week to get back up to near $25.

If the bears do try today then a break of 5790 will likely mean a drop down to 5750 where we have the 2 hour support, though we did climb off the first test of this yesterday, again at 5790. That said, the 30min chart is bullish to start with today and has support at 5825 so we may find we bounce off this early on today. If the bears were to break below 5750 then we are probably back on that path to test the bottom of the Raff channels at the 5600 level.

The S&P tried to break above the 2880 resistance level and managed a high of 2899 in the end, but saw a drop back at the end of the session. However it has since recovered to 2881 and again the charts are looking bullish for the moment. Another attempt to rise to 3000 remains distinctly possible. 2838 is the main support level for the moment.

So for today on the FTSE I am thinking that we see some bearishness to start with, but a possible recovery later on. We have a shortened week this week in the UK, with a public holiday on Friday, so traders will probably be looking to reduce weekend exposure. We also have a 7.89 point dividend today, which may see a bit of help for the bulls towards the end of the day, though dividends have less effect these days. So, whilst looking bullish still, the bulls need to break 5880 still.

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