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Slow drift down on FTSE as we consolidate before the next move | 6750 6720 support | 6782 6872 resistance

#1 · 13th January 2021, 10:13 am

Quote from Nick on 13th January 2021, 10:13 am
FTSE 100 live outlook prediction analysis for 13th January 2021
The FTSE 100 underperformed European peers as blue-chips came under pressure from a rising pound. Sterling’s climb – which came off the back of diminishing expectations from markets that the Bank of England will introduce negative rates – offset potential gains for miners that might have otherwise benefited from rising commodity prices.

Oil companies were more fortunate as stimulus hopes boosted oil prices: BP climbed 6.2p to 305p, while rival Royal Dutch Shell rose 26.2p to £14.34. There were also strong performances for British Airways owner IAG and Holiday Inn owner InterContinental Hotels, which were among the top risers in a sign of investor hopes that the end of the pandemic is in sight.
'Zero Risk'
President Donald Trump said he’s not at risk of being removed from office after encouraging supporters who went on to attack the U.S. Capitol last week — but suggested President-elect Joe Biden could be. Democrats have called for Trump to be removed after last Wednesday’s riot, but the president rejected any responsibility, calling inflammatory remarks he delivered before the attack “totally appropriate”. “The 25th Amendment is of zero risk to me but will come back to haunt Joe Biden and the Biden administration,” Trump said, referring to a constitutional amendment that lays out a process for the president’s cabinet to remove him. He didn’t elaborate. Meanwhile more banks are cutting ties with the president over the riot. His top creditor, his hometown bank and even his mortgage lender have spurned him. The question is whether his other banks and financial backers — including giants Capital One and JPMorgan — plan to keep him as a client.
Dollar Retreats
Asian stocks looked primed for a lackluster start to trading Wednesday after their U.S. peers closed little changed and Treasury yields fluctuated around a 10-month high. The dollar retreated. Futures pointed to little movement in Japan, Hong Kong and Australia after the S&P 500 fluctuated between gains and losses before closing flat. Energy, materials and the consumer discretionary sectors were the best performers as investors mulled the prospects of an economic recovery. Crude oil approached a 11-month high as the dollar fell back after a three-day rally. Corn futures surged on a tighter-than-expected supply outlook. Ten-year Treasury yields pared an earlier rise after a government auction was met with solid demand.[Bloomberg]
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US & Asia Overnight from Bloomberg
The dollar extended losses and Treasury yields continued their retreat from a 10-month high as traders weighed the appetite for bonds and the latest comments from Federal Reserve officials on asset purchases. Asian stocks headed toward another record high.
Ten-year Treasury yields fell to just above 1.10% after solid interest in a government auction on Tuesday. Two Fed officials also pushed back against speculation that asset purchases could be tapered soon. The dollar’s decline aided emerging-market currencies.
In Japan, the Nikkei 225 outperformed, reaching a record in dollar terms. Equities also ticked up in South Korea, while Hong Kong was flat. S&P 500 contracts edged higher after the index fluctuated between gains and losses before closing little changed. Oil was on course for its longest winning streak in almost two years.
While the rollout of vaccines and the prospect of more fiscal support in the U.S. is bolstering bets on an economic recovery, there are lingering concerns over possible speculative excess in stock markets near all-time highs in the middle of a pandemic. The Treasury yield curve has been steepening this year as investors bet on additional U.S. spending and more bond issuance.
FTSE 100 Outlook | Trading Signals | Forecast | Prediction | Analysis
We have trodden water for most of the week so far while awaiting the next larger move, and the bulls have hung on pretty well. The S&P defended the drop yesterday to recapture 3800, and this keeps in play a rise towards the 2 hour resistance level at 3828 currently. That would probably help pull the FTSE 100 up with it, which also climbed well from the 6720 low yesterday. Initial support is at 6750 this morning and we may see this hold but as we only have the 30min coral here (and its still red) its not the best support in the world. Slightly lower down is 6727 for the key fib and then S1 at 6721 - and this area looks like it might well see a bounce if we do dip below 6750. Double bottom with yesterday too and also the bottom of the 10 day Raff channel at 6728. Below 6720 then the daily support at 6688 would look to be the next main level. The slow steady drop from the first week of the year's exuberance seems to be playing out as investors take stock and we have dropped off the 6950 level. I am still thinking that we will get a larger dip and rise play out over the next month or two, and end of Feb/early March could see a next up leg kick in.
For the bulls they will be looking for a rise towards the 2 hour coral resistance at 6873 today. 100 point rise could well play out, especially if the S&P bulls do go for it. Its certainly spent most of this week consolidating! Prior to that though we have R1 at 6821, and also close to where we are as I write this, the 200ema on the 30min chart at 6783. That would be the first test of that moving average since moving below it yesterday so we may well see a reaction here.
It's 50/50 really as to whether we get another leg up - it feels like it wants to but it may not be able to pull it off. If we were to break below the 10 day Raff at 6725 then I would say that the worm is definitely starting to turn for a bit of a bearish period. At the end of the day, after the decent rises over the past 10 months, this is a good area to bank profits!
If the bulls were to break above the 6873 level then 6922 is R3 and also keeps alive a possible test of the 7000 level. I am not expecting us to get that high today though. Keep an eye on the S&P again - looking for a possible rise to that 3828 level and then see what it does there. A break of yesterdays low at 3775 and we may well see that start to get more bearish too.
Good luck today.
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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
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FTSE 100 live outlook prediction analysis for 13th January 2021

The FTSE 100 underperformed European peers as blue-chips came under pressure from a rising pound. Sterling’s climb – which came off the back of diminishing expectations from markets that the Bank of England will introduce negative rates – offset potential gains for miners that might have otherwise benefited from rising commodity prices.

Oil companies were more fortunate as stimulus hopes boosted oil prices: BP climbed 6.2p to 305p, while rival Royal Dutch Shell rose 26.2p to £14.34. There were also strong performances for British Airways owner IAG and Holiday Inn owner InterContinental Hotels, which were among the top risers in a sign of investor hopes that the end of the pandemic is in sight.

'Zero Risk'
President Donald Trump said he’s not at risk of being removed from office after encouraging supporters who went on to attack the U.S. Capitol last week — but suggested President-elect Joe Biden could be. Democrats have called for Trump to be removed after last Wednesday’s riot, but the president rejected any responsibility, calling inflammatory remarks he delivered before the attack “totally appropriate”. “The 25th Amendment is of zero risk to me but will come back to haunt Joe Biden and the Biden administration,” Trump said, referring to a constitutional amendment that lays out a process for the president’s cabinet to remove him. He didn’t elaborate. Meanwhile more banks are cutting ties with the president over the riot. His top creditor, his hometown bank and even his mortgage lender have spurned him. The question is whether his other banks and financial backers — including giants Capital One and JPMorgan — plan to keep him as a client.

Dollar Retreats
Asian stocks looked primed for a lackluster start to trading Wednesday after their U.S. peers closed little changed and Treasury yields fluctuated around a 10-month high. The dollar retreated. Futures pointed to little movement in Japan, Hong Kong and Australia after the S&P 500 fluctuated between gains and losses before closing flat. Energy, materials and the consumer discretionary sectors were the best performers as investors mulled the prospects of an economic recovery. Crude oil approached a 11-month high as the dollar fell back after a three-day rally. Corn futures surged on a tighter-than-expected supply outlook. Ten-year Treasury yields pared an earlier rise after a government auction was met with solid demand.[Bloomberg]

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US & Asia Overnight from Bloomberg

The dollar extended losses and Treasury yields continued their retreat from a 10-month high as traders weighed the appetite for bonds and the latest comments from Federal Reserve officials on asset purchases. Asian stocks headed toward another record high.

Ten-year Treasury yields fell to just above 1.10% after solid interest in a government auction on Tuesday. Two Fed officials also pushed back against speculation that asset purchases could be tapered soon. The dollar’s decline aided emerging-market currencies.

In Japan, the Nikkei 225 outperformed, reaching a record in dollar terms. Equities also ticked up in South Korea, while Hong Kong was flat. S&P 500 contracts edged higher after the index fluctuated between gains and losses before closing little changed. Oil was on course for its longest winning streak in almost two years.

While the rollout of vaccines and the prospect of more fiscal support in the U.S. is bolstering bets on an economic recovery, there are lingering concerns over possible speculative excess in stock markets near all-time highs in the middle of a pandemic. The Treasury yield curve has been steepening this year as investors bet on additional U.S. spending and more bond issuance.

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

We have trodden water for most of the week so far while awaiting the next larger move, and the bulls have hung on pretty well. The S&P defended the drop yesterday to recapture 3800, and this keeps in play a rise towards the 2 hour resistance level at 3828 currently. That would probably help pull the FTSE 100 up with it, which also climbed well from the 6720 low yesterday. Initial support is at 6750 this morning and we may see this hold but as we only have the 30min coral here (and its still red) its not the best support in the world. Slightly lower down is 6727 for the key fib and then S1 at 6721 - and this area looks like it might well see a bounce if we do dip below 6750. Double bottom with yesterday too and also the bottom of the 10 day Raff channel at 6728. Below 6720 then the daily support at 6688 would look to be the next main level. The slow steady drop from the first week of the year's exuberance seems to be playing out as investors take stock and we have dropped off the 6950 level. I am still thinking that we will get a larger dip and rise play out over the next month or two, and end of Feb/early March could see a next up leg kick in.

For the bulls they will be looking for a rise towards the 2 hour coral resistance at 6873 today. 100 point rise could well play out, especially if the S&P bulls do go for it. Its certainly spent most of this week consolidating! Prior to that though we have R1 at 6821, and also close to where we are as I write this, the 200ema on the 30min chart at 6783. That would be the first test of that moving average since moving below it yesterday so we may well see a reaction here.

It's 50/50 really as to whether we get another leg up - it feels like it wants to but it may not be able to pull it off. If we were to break below the 10 day Raff at 6725 then I would say that the worm is definitely starting to turn for a bit of a bearish period. At the end of the day, after the decent rises over the past 10 months, this is a good area to bank profits!

If the bulls were to break above the 6873 level then 6922 is R3 and also keeps alive a possible test of the 7000 level. I am not expecting us to get that high today though. Keep an eye on the S&P again - looking for a possible rise to that 3828 level and then see what it does there. A break of yesterdays low at 3775 and we may well see that start to get more bearish too.

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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