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Overnight drop so initial climb today | bear Tuesday | 7363 7392 resistance | 7290 7250 support

#1 · 20th December 2022, 11:08 am

Quote from Nick on 20th December 2022, 11:08 am
FTSE100 Analysis | Signals | Forecast | Prediction | FTSE 100 Outlook | Trading help
FTSE100 live outlook prediction analysis for 20th December 2022
US stocks dropped for a fourth session Monday after central bank officials vowed to keep raising rates until they’re confident inflation is coming down. The S&P 500 closed at its lowest level in more than a month, dragged by declines in big-tech firms including Apple, Microsoft and Amazon. Treasuries fell, led by longer-dated securities, as traders speculated about the potential for a hawkish pivot from the Bank of Japan.
The yen rallied while stocks and bonds slumped in the wake of the Bank of Japan’s unexpected adjustment to its yield-curve control policy. A day that began with listless, mildly downbeat trading in Asia was thrown into turmoil when the BOJ increased the upper limit of its tolerance band on 10-year government bonds to 0.5% from 0.25%.
A fairly quiet one yesterday for the FTSE100 which all changed overnight after that BoJ news. However we dropped down to the 7295 key support and that has has so far seen a 40 point bounce, to retest the 7330 level as I write this.
Initially today we may well see a bit more of a climb as we retrace a bit of that overnight drop. A drop that looks a bit overdone to be honest for the futures as rising interest rates globally is par for the course now, and the BoJ are just making an adjustment to allow them to do so. Rates will probably go up more in the West as well, around about the 5% level is probably the ultimate goal for the US and the UK.
If we do get a kick up then 7350 looks a good initial resistance level as we have the red 30m coral here, and then the daily pivot at the 7363 level above that. Should the bulls really push on today then the 200ema on the 30m is at the 7390 level and the next level of note for me. That also splits R1 and R2 at 7388 and 7411 respectively, so a 100 point bounce would make sense to stall around here for a bit more of a bear Tuesday to kick in later.
The S&P has remained fairly bearish again with 5 red daily candles in succession. Hard for the bulls to pin a rise onto anything at the moment though the 3760 level may offer some bounce potential later on if it drops that low. That said a rise towards the 3830 level for a test of the 2h Hull MA and also the daily pivot would fit well, and also give the bulls a bit of a cheer.
For the FTSE100, if the bears break below the 7290 area then 7250 is the bottom of the 10d Raff and a level that I would hope we see a bounce from. A break of this would get things pretty bearish and most definitely confirm that a Santa Rally in December might be off the table this yar. That said, we have had a decent climb from the 6700 level in October anyway.
Not too much more to say really today, stay nimble, lower volume week so far so moves do get exaggerated and keep an eye out for any inkling of a Santa Rally. It's also a half day on Friday don't forget so a slightly shorter trading week.
Good luck today.
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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.
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FTSE100 Analysis | Signals | Forecast | Prediction | FTSE 100 Outlook | Trading help

FTSE100 live outlook prediction analysis for 20th December 2022

US stocks dropped for a fourth session Monday after central bank officials vowed to keep raising rates until they’re confident inflation is coming down. The S&P 500 closed at its lowest level in more than a month, dragged by declines in big-tech firms including Apple, Microsoft and Amazon. Treasuries fell, led by longer-dated securities, as traders speculated about the potential for a hawkish pivot from the Bank of Japan.

The yen rallied while stocks and bonds slumped in the wake of the Bank of Japan’s unexpected adjustment to its yield-curve control policy. A day that began with listless, mildly downbeat trading in Asia was thrown into turmoil when the BOJ increased the upper limit of its tolerance band on 10-year government bonds to 0.5% from 0.25%.

A fairly quiet one yesterday for the FTSE100 which all changed overnight after that BoJ news. However we dropped down to the 7295 key support and that has has so far seen a 40 point bounce, to retest the 7330 level as I write this.

Initially today we may well see a bit more of a climb as we retrace a bit of that overnight drop. A drop that looks a bit overdone to be honest for the futures as rising interest rates globally is par for the course now, and the BoJ are just making an adjustment to allow them to do so. Rates will probably go up more in the West as well, around about the 5% level is probably the ultimate goal for the US and the UK.

If we do get a kick up then 7350 looks a good initial resistance level as we have the red 30m coral here, and then the daily pivot at the 7363 level above that. Should the bulls really push on today then the 200ema on the 30m is at the 7390 level and the next level of note for me. That also splits R1 and R2 at 7388 and 7411 respectively, so a 100 point bounce would make sense to stall around here for a bit more of a bear Tuesday to kick in later.

The S&P has remained fairly bearish again with 5 red daily candles in succession. Hard for the bulls to pin a rise onto anything at the moment though the 3760 level may offer some bounce potential later on if it drops that low. That said a rise towards the 3830 level for a test of the 2h Hull MA and also the daily pivot would fit well, and also give the bulls a bit of a cheer.

For the FTSE100, if the bears break below the 7290 area then 7250 is the bottom of the 10d Raff and a level that I would hope we see a bounce from. A break of this would get things pretty bearish and most definitely confirm that a Santa Rally in December might be off the table this yar. That said, we have had a decent climb from the 6700 level in October anyway.

Not too much more to say really today, stay nimble, lower volume week so far so moves do get exaggerated and keep an eye out for any inkling of a Santa Rally. It's also a half day on Friday don't forget so a slightly shorter trading week.

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