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More bank woes | Sell in May kicks in | 7817 7845 resistance | 7755 7737 7710 support

#1 · 3rd May 2023, 8:22 am

Quote from Nick on 3rd May 2023, 8:22 am
FTSE100 Analysis | Signals | Forecast | Prediction | FTSE 100 Outlook | Trading help
FTSE100 live outlook prediction analysis for 4th May 2023
Fears of a US banking crisis were reignited on Tuesday after shares in two regional lenders plummeted following the failure of First Republic. PacWest, a Californian lender, saw trading in its shares suspended after the stock plunged as much as 39pc, while Arizona's Western Alliance fell by more than a fifth. The steep drops stoked concerns about a crisis of confidence in the US banking system and led to calls for the Federal Reserve to stop raising interest rates.
The FTSE 100 ended in the red, closing down 1.24pc at 7,773.03. The mid-cap FTSE 250 index ended 0.57pc lower at 19,314.23.
Asian stocks fell for a second session in a row on Wednesday, as global investors contended with signs of a softening U.S. economy, and were in full flight from U.S. regional lenders, ahead of an expected U.S. interest rate hike later in the day.
Overnight, tumbling regional bank stocks dragged the S&P 500 down 1.2% and oil dived more than 5% on fears that shaky bank confidence and signs of weakness in the U.S. job market were harbingers of a looming broader slowdown.
Well that all got bearish yesterday with more bank woes coming to the fore. Wasn't quite ready for that so it upset the apple cart somewhat. Focus will now also shift to the Fed and the highly likely 25bps rate increase to be announced at 7pm. The press conference follows at 7:30pm, and traders will be looking at that for clues on the future - rate increase, bank bailouts etc.
Initially today we well see a kick up and the price to move above and hold above the 7800 level. A rise towards the 30m 200ema at 7845 would fit pretty well, but as a result of yesterday the 2h chart is, as you would expect, bearish, with the 7850 area now resistance from a red coral and the Hull MA. As such, we could see any early rise fizzle out here and the bears to have another go at trying to take it down to ultimately the 7710 next daily support level. Might not get that low today though.
We have decent support to start with at the 7755 level and the key fib here, and then the S1 level just below that at the 7737 level. 7737 is also the first test of the now green daily coral line, and also below both the Raff channels so I would like to see a snap back from here if it did get that low.
7770 is the 20d Raff channel bottom also, but is still heading up though given the recent weakness the 10d Raff isn't quite as optimistic now heading down.
Gold has levelled off after its rise yesterday and is holding steady at the 2015 level. Its also near the top of the 10d Raff at 2020 and the 20d at 2030, so if that starts to drop back it may well front run a bounce on indices as they retrace some of yesterday's drop.
Below 7710 then the S2 level at 7683 would be next up. I don't think we will get that low (another bank issue notwithstanding though!) and we will probably see a buy the rumour sell the news day play out ahead of the Fed this evening.
Above the 7850 are atone the bulls will be aiming to break R1 at 7871, and then target 7951 where we have R2. Given the largish drop yesterday the support and resistance levels are quite spread out today.
The S&P500 has bounced well from the 4085 level and is back above, and pulling away from, the 4100 level, and a rise towards 4160 would fit well on that to test the Hull MA on the 2h here. 4163 is also R1. If it did get that high then a drop back from there would make sense.
Good luck today.
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FTSE100 Analysis | Signals | Forecast | Prediction | FTSE 100 Outlook | Trading help

FTSE100 live outlook prediction analysis for 4th May 2023

Fears of a US banking crisis were reignited on Tuesday after shares in two regional lenders plummeted following the failure of First Republic. PacWest, a Californian lender, saw trading in its shares suspended after the stock plunged as much as 39pc, while Arizona's Western Alliance fell by more than a fifth. The steep drops stoked concerns about a crisis of confidence in the US banking system and led to calls for the Federal Reserve to stop raising interest rates.

The FTSE 100 ended in the red, closing down 1.24pc at 7,773.03. The mid-cap FTSE 250 index ended 0.57pc lower at 19,314.23.

Asian stocks fell for a second session in a row on Wednesday, as global investors contended with signs of a softening U.S. economy, and were in full flight from U.S. regional lenders, ahead of an expected U.S. interest rate hike later in the day.

Overnight, tumbling regional bank stocks dragged the S&P 500 down 1.2% and oil dived more than 5% on fears that shaky bank confidence and signs of weakness in the U.S. job market were harbingers of a looming broader slowdown.

Well that all got bearish yesterday with more bank woes coming to the fore. Wasn't quite ready for that so it upset the apple cart somewhat. Focus will now also shift to the Fed and the highly likely 25bps rate increase to be announced at 7pm. The press conference follows at 7:30pm, and traders will be looking at that for clues on the future - rate increase, bank bailouts etc.

Initially today we well see a kick up and the price to move above and hold above the 7800 level. A rise towards the 30m 200ema at 7845 would fit pretty well, but as a result of yesterday the 2h chart is, as you would expect, bearish, with the 7850 area now resistance from a red coral and the Hull MA. As such, we could see any early rise fizzle out here and the bears to have another go at trying to take it down to ultimately the 7710 next daily support level. Might not get that low today though.

We have decent support to start with at the 7755 level and the key fib here, and then the S1 level just below that at the 7737 level. 7737 is also the first test of the now green daily coral line, and also below both the Raff channels so I would like to see a snap back from here if it did get that low.

7770 is the 20d Raff channel bottom also, but is still heading up though given the recent weakness the 10d Raff isn't quite as optimistic now heading down.

Gold has levelled off after its rise yesterday and is holding steady at the 2015 level. Its also near the top of the 10d Raff at 2020 and the 20d at 2030, so if that starts to drop back it may well front run a bounce on indices as they retrace some of yesterday's drop.

Below 7710 then the S2 level at 7683 would be next up. I don't think we will get that low (another bank issue notwithstanding though!) and we will probably see a buy the rumour sell the news day play out ahead of the Fed this evening.

Above the 7850 are atone the bulls will be aiming to break R1 at 7871, and then target 7951 where we have R2. Given the largish drop yesterday the support and resistance levels are quite spread out today.

The S&P500 has bounced well from the 4085 level and is back above, and pulling away from, the 4100 level, and a rise towards 4160 would fit well on that to test the Hull MA on the 2h here. 4163 is also R1. If it did get that high then a drop back from there would make sense.

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 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