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FED steps in as we climb off the bottom of the Raff channels | 6236 6317 resistance | 6160 6100 support

#1 · 16th June 2020, 11:01 am

Quote from Nick on 16th June 2020, 11:01 am
FTSE 100 live outlook prediction analysis for 16th June 2020
European shares mounted a comeback during the session after a painful start, pulling back 2.5pc–3pc losses to end the day down only moderately.
Britain’s housebuilders missed out on a rally for continental construction firms, with the FTSE 100 gainers dominated by financials and household goods firms.
Wall Street was down by 300 points by late morning in New York, but soon recovered after the Fed announced that they will start buying individual corporate bonds.
Earlier in Asia, Tokyo, Hong Kong and Shanghai all tumbled following signs that the COVID-19 disease had returned to China with new cases reported in Beijing.
Oil prices also dived as more pressure on growth would ravage demand for energy.
The FTSE 100 fell 0.66pc to 6,064.70 while the FTSE 250 ended 0.07pc higher.
The Federal Reserve said Monday that it will begin buying individual corporate bonds under its Secondary Market Corporate Credit Facility, an emergency lending program that to date has purchased only exchange-traded funds. The central bank also spelled out for the first time how it plans to implement its buying strategy, saying it would follow a diversified market index of U.S. corporate bonds created expressly for the facility. The Fed built the index internally, and a spokesman couldn’t immediately say whether its details would be made public. “This index is made up of all the bonds in the secondary market that have been issued by U.S. companies that satisfy the facility’s minimum rating, maximum maturity and other criteria,” the Fed said in a statement. The creation of the index removed a potential hurdle for companies that would have had to certify that they were in compliance with restrictions outlined for the program, causing cause for cheer with investors.
Markets Lift
Asian stocks are set to start trading stronger on Tuesday after the Fed's announcement, which overshadowed concerns of a second pandemic wave and helped to lift U.S. equities. The dollar fell against peers. Futures were higher in Japan, Australia and Hong Kong. The S&P 500 closed up 0.8% after swinging from loss of as much as 2.5% to a gain of as much as 1.3%. Oil rebounded after dropping to less than $35 a barrel. Treasuries dipped. Elsewhere, oil was back above $37 a barrel amid signs of improving demand and declining production.
Second wave
WHO said more than 100 cases have now been confirmed in Beijing and China warned there is a very high risk of the new Beijing coronavirus cluster spreading
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FTSE 100 Outlook | Trading Signals | Forecast | Prediction | Analysis
Asian stocks rebounded from their biggest decline since March and U.S. futures climbed after news about U.S. monetary and fiscal stimulus plans bucked up investor sentiment in face of worries over a second wave of the coronavirus. S&P 500 futures spiked to session highs on news the Trump administration is considering $1 trillion in infrastructure spending. The index Monday erased losses and closed higher after the Federal Reserve detailed plans to buy individual corporate bonds, underscoring its role as a backstop. The MSCI Asia Pacific Index climbed over 3%, while the dollar slumped and Treasuries dropped.
After the initial wobble yesterday the bulls came charging back and helped by the Fed, we have risen substantially. The 10 day Raff channel held well with the bottom at the 5950 area, and as such we may well be on course for a rise to test the top, currently at 6470, in the fullness of time.
For today I am thinking that we may get a quick dip down to the 200ema on the 30min at the 6160 level, as we see some profits being banked from the rise. Especially as the Beijing case count has risen a bit further today. That area is also a test of the 25ema on the 30min, and just above a back test of the fib level at 6141. As such, buying this initial dip is what I am thinking for a rise back to R1 at 6236, with an eventual rise towards the R2 level at 6317 today. The ASX200 steadily rose today as well, and I think that we will get a similar pattern. Can't fight the Fed after all!
For the bears if they were to break below the 6140 level today then I would expect a drop down to the pivot at 6083. We do also have the 30min coral at 6100 though, so I am thinking that should we get a dip down to this area then the bulls will reappear here.
After the rise yesterday the 2 hour chart is now of course bullish again, with moving average support at 6009 for the moment. That also coincides with the bottom of the 20 day Raff channel, so the bulls will certainly be keen to keep the price above 6000 for the moment. We had the bull Monday yesterday but it still looks strong for a bear Tuesday to kick in just yet, and I am thinking that buying the dip is still the right play for today, certainly initially. The S&P defended the 200ema on the daily at the 2960 level (with an overshoot though) and is now sitting on daily resistance at 3120, which may also account for an initial dip this morning.
For today therefore, watch the 6236 level as initial resistance, 6315 above that. With it rising so far yesterday, most of the indicators are lagging a bit so it's a case of using R1 and R2 initially. For support 6160, 6140, 6100 are the main ones I am looking at. Good luck today
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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 16th June 2020

European shares mounted a comeback during the session after a painful start, pulling back 2.5pc–3pc losses to end the day down only moderately.
Britain’s housebuilders missed out on a rally for continental construction firms, with the FTSE 100 gainers dominated by financials and household goods firms.
Wall Street was down by 300 points by late morning in New York, but soon recovered after the Fed announced that they will start buying individual corporate bonds.
Earlier in Asia, Tokyo, Hong Kong and Shanghai all tumbled following signs that the COVID-19 disease had returned to China with new cases reported in Beijing.
Oil prices also dived as more pressure on growth would ravage demand for energy.

The FTSE 100 fell 0.66pc to 6,064.70 while the FTSE 250 ended 0.07pc higher.

The Federal Reserve said Monday that it will begin buying individual corporate bonds under its Secondary Market Corporate Credit Facility, an emergency lending program that to date has purchased only exchange-traded funds. The central bank also spelled out for the first time how it plans to implement its buying strategy, saying it would follow a diversified market index of U.S. corporate bonds created expressly for the facility. The Fed built the index internally, and a spokesman couldn’t immediately say whether its details would be made public. “This index is made up of all the bonds in the secondary market that have been issued by U.S. companies that satisfy the facility’s minimum rating, maximum maturity and other criteria,” the Fed said in a statement. The creation of the index removed a potential hurdle for companies that would have had to certify that they were in compliance with restrictions outlined for the program, causing cause for cheer with investors.

Markets Lift

Asian stocks are set to start trading stronger on Tuesday after the Fed's announcement, which overshadowed concerns of a second pandemic wave and helped to lift U.S. equities. The dollar fell against peers. Futures were higher in Japan, Australia and Hong Kong. The S&P 500 closed up 0.8% after swinging from loss of as much as 2.5% to a gain of as much as 1.3%. Oil rebounded after dropping to less than $35 a barrel. Treasuries dipped. Elsewhere, oil was back above $37 a barrel amid signs of improving demand and declining production.

Second wave

WHO said more than 100 cases have now been confirmed in Beijing and China warned there is a very high risk of the new Beijing coronavirus cluster spreading

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

Asian stocks rebounded from their biggest decline since March and U.S. futures climbed after news about U.S. monetary and fiscal stimulus plans bucked up investor sentiment in face of worries over a second wave of the coronavirus. S&P 500 futures spiked to session highs on news the Trump administration is considering $1 trillion in infrastructure spending. The index Monday erased losses and closed higher after the Federal Reserve detailed plans to buy individual corporate bonds, underscoring its role as a backstop. The MSCI Asia Pacific Index climbed over 3%, while the dollar slumped and Treasuries dropped.

After the initial wobble yesterday the bulls came charging back and helped by the Fed, we have risen substantially. The 10 day Raff channel held well with the bottom at the 5950 area, and as such we may well be on course for a rise to test the top, currently at 6470, in the fullness of time.

For today I am thinking that we may get a quick dip down to the 200ema on the 30min at the 6160 level, as we see some profits being banked from the rise. Especially as the Beijing case count has risen a bit further today. That area is also a test of the 25ema on the 30min, and just above a back test of the fib level at 6141. As such, buying this initial dip is what I am thinking for a rise back to R1 at 6236, with an eventual rise towards the R2 level at 6317 today. The ASX200 steadily rose today as well, and I think that we will get a similar pattern. Can't fight the Fed after all!

For the bears if they were to break below the 6140 level today then I would expect a drop down to the pivot at 6083. We do also have the 30min coral at 6100 though, so I am thinking that should we get a dip down to this area then the bulls will reappear here.

After the rise yesterday the 2 hour chart is now of course bullish again, with moving average support at 6009 for the moment. That also coincides with the bottom of the 20 day Raff channel, so the bulls will certainly be keen to keep the price above 6000 for the moment. We had the bull Monday yesterday but it still looks strong for a bear Tuesday to kick in just yet, and I am thinking that buying the dip is still the right play for today, certainly initially. The S&P defended the 200ema on the daily at the 2960 level (with an overshoot though) and is now sitting on daily resistance at 3120, which may also account for an initial dip this morning.

For today therefore, watch the 6236 level as initial resistance, 6315 above that. With it rising so far yesterday, most of the indicators are lagging a bit so it's a case of using R1 and R2 initially. For support 6160, 6140, 6100 are the main ones I am looking at. 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 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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