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Liz leaves.... Next! | 6895 6867 6852 support | 6945 6960 7010 resistance

#1 · 21st October 2022, 9:32 am

Quote from Nick on 21st October 2022, 9:32 am
FTSE100 Analysis | Signals | Forecast | Prediction | FTSE 100 Outlook | Trading help
Asian stocks followed US equities lower, as Treasury yields held at the highest level since the global financial crisis and investors weighed risks to Chinese markets. A gauge of the region’s equities fell to head for a second week of declines, with chip giant Taiwan Semiconductor Manufacturing Co. and major Australian banks among the biggest drags. US stock futures fell amid wariness around economic challenges that saw the S&P 500 swing from a gain of more than 1% to a loss of almost the same.
Asian shares tracked Wall Street lower on Friday while Treasury yields scaled 14-year highs as the prospect of aggressive interest rate hikes from the Federal Reserve and recession risks soured investor sentiment.
MSCI’s broadest index of Asia-Pacific shares outside Japan was down 0.55% but above the two-and-a-half year low it touched on Thursday. Australia’s resources-heavy share index lost 0.74%, while Japan’s Nikkei opened 0.38% lower.
China’s stock market opened 0.1% higher on Friday. Xi Jinping, set to clinch a third five-year term as China’s leader, will reveal the members of its elite Politburo Standing Committee at the conclusion of the twice-a-decade congress on Sunday.
Also weighing on the market were remarks from Philadelphia Federal Reserve President Patrick Harker that suggested the central bank will “keep raising rates for a while.”
U.S. economic data on Thursday showing persistent labor tightness also added to investor angst. U.S. benchmark 10-year Treasury yields to as much as 4.234%, its highest level since June 2008.
In the currency market, sterling dipped lower as investors digested the news that British Prime Minister Liz Truss had quit after just six weeks in office. The pound was last trading at $1.1205, down 0.25% on the day.
Truss’ resignation surprised no-one and was met with little market reaction given the wholesale abandonment of her policies by the finance minister
Quantum Plans
The Biden administration is exploring the possibility of new export controls that would limit China’s access to some of the most powerful emerging computing technologies. The potential plans are focused on the still-experimental field of quantum computing, as well as artificial intelligence software, sources say. The US has ramped up actions to stifle China’s ability to develop certain technologies that it sees as key in the competition with its top strategic rival. Earlier this month new restrictions on doing business with China sent shock waves through the global semiconductor industry.
FTSE100 live outlook prediction analysis for 21st October 2022
So after just a few weeks Liz has gone so in theory we should see the markets bounce as they sold off on her policies/management/plans/everything really. We won't initially of course as they are still playing the game and it will be interesting to see who the next incumbent for number 10 is. We mooted that Boris would be back on the day he left and funnily enough he has thrown his hat into the ring..... Still think it was all planned to put Liz there just to mess it up, so the next one can swan in and can therefore be made to look better.
Anyway, for today we have dropped back down to the 6900 level and a further slide down to the 6870 area could well play out initially this morning. We have fairly decent support here with a daily trend line and also the key fib so a bounce here would make sense. Prior to this then the 6894 level is first up which looks like it will get an early test - I am watching this for an initial reaction.
Below the 6860 level then the bears will be trying to take it down towards the 6810 level, and a break of that will get things quite bearish. That said, we could just be lagging a bit as the Dax remains bullish on the daily chart with support at 12560 (and also S1 here), and the S&P500 10d Raff is now also heading up.
To reverse the drop the bulls really need to get it above the Hull MA on the 2h at 6948 today, and preferably a close above 7000 - might be a big ask as the government implodes but hopefully we find out Monday who the next PM is. Anyone reading fancy a go?
If we do see the bulls step in on any dip this morning then a retest of the 6945 2h Hull line looks likely (it was this line we dropped off yesterday at 6948, no overshoot this time though) and we also have R1 here. Above that then the key fib is 6960 and again, the bulls will need to be strong to break above this. Might be a big ask for a Friday though.
The news this morning, not surprisingly, is that Government borrowing has leapt and retail sales drop by much more than expected as more tighten their belts. Something that should help cool inflation of course as demand drops. The problem now is that they have squeezed a bit too much so instead of a slow down, it's more of a screeching halt!
S&P500
The Bulls will be keen to recapture 3700 really, and a drop down (and possibly a hold) of the 3622 level looks likely today. The 2h resistance held yesterday at the 3737 level, again no overshoot to the 3740 level but dropped off steadily since. The 2h coral has now also gone red at 3713 so this level is the key for the bulls to push past. If we get a rise to this today then we could see a drop off again ahead of the weekend.
Usual caveat applies as its Friday - be a bit more cautious and lower stakes are usually better for a Friday. Good luck today and have a great weekend.
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FTSE100 Analysis | Signals | Forecast | Prediction | FTSE 100 Outlook | Trading help

Asian stocks followed US equities lower, as Treasury yields held at the highest level since the global financial crisis and investors weighed risks to Chinese markets. A gauge of the region’s equities fell to head for a second week of declines, with chip giant Taiwan Semiconductor Manufacturing Co. and major Australian banks among the biggest drags. US stock futures fell amid wariness around economic challenges that saw the S&P 500 swing from a gain of more than 1% to a loss of almost the same.

Asian shares tracked Wall Street lower on Friday while Treasury yields scaled 14-year highs as the prospect of aggressive interest rate hikes from the Federal Reserve and recession risks soured investor sentiment.

MSCI’s broadest index of Asia-Pacific shares outside Japan was down 0.55% but above the two-and-a-half year low it touched on Thursday. Australia’s resources-heavy share index lost 0.74%, while Japan’s Nikkei opened 0.38% lower.

China’s stock market opened 0.1% higher on Friday. Xi Jinping, set to clinch a third five-year term as China’s leader, will reveal the members of its elite Politburo Standing Committee at the conclusion of the twice-a-decade congress on Sunday.

Also weighing on the market were remarks from Philadelphia Federal Reserve President Patrick Harker that suggested the central bank will “keep raising rates for a while.”

U.S. economic data on Thursday showing persistent labor tightness also added to investor angst. U.S. benchmark 10-year Treasury yields to as much as 4.234%, its highest level since June 2008.

In the currency market, sterling dipped lower as investors digested the news that British Prime Minister Liz Truss had quit after just six weeks in office. The pound was last trading at $1.1205, down 0.25% on the day.

Truss’ resignation surprised no-one and was met with little market reaction given the wholesale abandonment of her policies by the finance minister

Quantum Plans
The Biden administration is exploring the possibility of new export controls that would limit China’s access to some of the most powerful emerging computing technologies. The potential plans are focused on the still-experimental field of quantum computing, as well as artificial intelligence software, sources say. The US has ramped up actions to stifle China’s ability to develop certain technologies that it sees as key in the competition with its top strategic rival. Earlier this month new restrictions on doing business with China sent shock waves through the global semiconductor industry.

FTSE100 live outlook prediction analysis for 21st October 2022

So after just a few weeks Liz has gone so in theory we should see the markets bounce as they sold off on her policies/management/plans/everything really. We won't initially of course as they are still playing the game and it will be interesting to see who the next incumbent for number 10 is. We mooted that Boris would be back on the day he left and funnily enough he has thrown his hat into the ring..... Still think it was all planned to put Liz there just to mess it up, so the next one can swan in and can therefore be made to look better.

Anyway, for today we have dropped back down to the 6900 level and a further slide down to the 6870 area could well play out initially this morning. We have fairly decent support here with a daily trend line and also the key fib so a bounce here would make sense. Prior to this then the 6894 level is first up which looks like it will get an early test - I am watching this for an initial reaction.

Below the 6860 level then the bears will be trying to take it down towards the 6810 level, and a break of that will get things quite bearish. That said, we could just be lagging a bit as the Dax remains bullish on the daily chart with support at 12560 (and also S1 here), and the S&P500 10d Raff is now also heading up.

To reverse the drop the bulls really need to get it above the Hull MA on the 2h at 6948 today, and preferably a close above 7000 - might be a big ask as the government implodes but hopefully we find out Monday who the next PM is. Anyone reading fancy a go?

If we do see the bulls step in on any dip this morning then a retest of the 6945 2h Hull line looks likely (it was this line we dropped off yesterday at 6948, no overshoot this time though) and we also have R1 here. Above that then the key fib is 6960 and again, the bulls will need to be strong to break above this. Might be a big ask for a Friday though.

The news this morning, not surprisingly, is that Government borrowing has leapt and retail sales drop by much more than expected as more tighten their belts. Something that should help cool inflation of course as demand drops. The problem now is that they have squeezed a bit too much so instead of a slow down, it's more of a screeching halt!

S&P500
The Bulls will be keen to recapture 3700 really, and a drop down (and possibly a hold) of the 3622 level looks likely today. The 2h resistance held yesterday at the 3737 level, again no overshoot to the 3740 level but dropped off steadily since. The 2h coral has now also gone red at 3713 so this level is the key for the bulls to push past. If we get a rise to this today then we could see a drop off again ahead of the weekend.

Usual caveat applies as its Friday - be a bit more cautious and lower stakes are usually better for a Friday. Good luck today 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 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

Keep up to date with new content, free sign up below with just your email address

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