Quote from Nick on 8th January 2021, 9:58 am

FTSE 100 live outlook prediction analysis for 8th January 2021

The FTSE 100 extended its gains after a record-breaking start of the year, shaking off a session in the red over the closing hour of trading to end up 15.1 points at 6,857.0, as investors’ sentiment remained bullish despite chaotic scenes at the US Capitol the previous day. Globally, stocks rose solidly, while weakness in the pound sparked, but a broad strengthening of the dollar offered further support to London’s blue-chips. Sainsbury’s was the biggest riser on the FTSE 100, climbing 16p to 248.5p after saying its like-for-like sales had risen 9.3pc over the Christmas period and upping its profit forecast.

Miners and energy companies once again underpinned the FTSE 100’s gains, amid hopes that the Democrats’ capture of the Senate would herald a new wave of spending in the US, as well as general optimism that vaccines will spark a recovery in global demand.

Remove Him
House Speaker Nancy Pelosi and Senate Democratic leader Chuck Schumer demanded that President Donald Trump’s cabinet immediately remove him from office and threatened a new drive to impeach him if they don’t act. They accused Trump — who has prepared a sweeping list of individuals he’s hoping to pardon in the final days of his administration — of inciting the mob that stormed the Capitol and called him a continuing threat to democracy in his waning days in the White House. Trump is “a very dangerous person who should not continue in office,” Pelosi said. Meanwhile a growing list of Trump administration officials have stepped down, Biden brands the Capitol mob "domestic terrorists", and the two Republicans beaten in Georgia's Senate runoff refuse to concede.[Bloomberg]

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US & Asia Overnight from Bloomberg

Asian stocks followed their U.S. peers higher Friday as a surge in technology shares and continued hopes for more stimulus boosted sentiment. Treasuries slipped and the dollar steadied after overnight gains.

Stocks climbed across much of the region, with South Korea outperforming after Hyundai Motor Co. said it is in early talks with Apple Inc. over developing self-driving electric vehicles. Hong Kong rose, weathering MSCI Inc.’s decision to remove China’s three major telecommunications companies from its benchmark indexes.

U.S. futures advanced after all major equity indexes notched records, with about 70% of the companies in the S&P 500 in the green and the Nasdaq 100 jumping 2.5%. The Dow Jones Transportation Average -- a proxy for economic activity -- also hit an all-time high, while the Russell 2000 Index of small caps extended a three-day advance to almost 8%. Benchmark Treasury yields climbed toward 1.10%.

Elsewhere, Bitcoin dropped after topping $40,000. Oil edged higher and gold dipped.

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

Last day of a pretty bullish week to start the year, with a nearly 500 point rally already on the FTSE 100. As such, and with the daily RSI at 72, we may well see some profit taking today towards the end of play. That said, for the session itself I am thinking that we will get a dip and rise, with a test of the 20 day Raff channel top at 6962 distinctly possible. The S&P has come into 3825 resistance overnight, and also a bit overbought on the RSI so could see a slight stutter here. That said, we may well get the Friday afternoon pump later on today on that as well.

As I write this the 30m FTSE 100 chart is showing a few negative RSI divergence signals as well so we could well start the day with a dip and a drop of the fib level at 6905.

For the bulls they will be looking to test that 6960 area today. Above that then the 7000 level is the top of the 10 day Raff and psychologically important being such a significant round number. Might be a big ask to push much past that as its the end of the week but I am thinking that the 6960 area should see a decent reaction initially if we get that high.

For support we have the 30m coral at 6877, and just above the daily pivot at 6871. As such we could see this level hold, especially if we get an initial dip to start the day. Below this, then 6819 is the key fib and would be worth a try long. However, should this break then the 2h chart is slowing a green coral support line at 6735 and we may well see the bears start trying to take control to target that area before too long.

It's all a bit frothy so the bulls will be wanting to bank some profits soon I think, though with stocks and shares still being the best place for investment at the moment, dips being bought is likely to continue for a little bit longer. Investors are also hopeful that the new US Presidency will lead to a bit of calm.

So watching for initial support at the 6880 area to see if a dip and rise plays out from this level. As its Friday it can pay to do lower stakes as it can often be a bit of a choppier session. Good luck today and have a good weekend.

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