Quote from Nick on 5th October 2021, 10:26 am

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

The FTSE 100 fell 0.2pc on Monday while US markets also dropped.

Facebook, Instagram and WhatsApp were knocked offline for hours on Monday due to an apparent technical error that made the social networks unreachable for billions of users. Shares in Facebook - which owns the three networks - fell by more than 5 per cent as the worldwide outage persisted. 2.8 billion people use at least one of Facebook, WhatsApp and Instagram daily.

Orders for US manufactured goods rose 1.2pc in August, according to new figures released by the Commerce Department. The positive figures show continued strength in manufacturing even despite shortages of labour and materials that have hampered growth. Economists surveyed by the Wall Street Journal had forecast a rise of 1.1pc. Factory orders for July were revised up to a 0.7pc gain from the prior estimate of a 0.4pc increase. Looking at the details, durable goods orders rose 1.8pc in August, unrevised from the initial estimate released last week. Orders for nondurable goods were up 0.6pc in the month.

FTSE 100 live outlook prediction analysis for 5th October 2021

The FTSE100 is proving quite resilient at the moment, managing to hold above the 7000 level in spite of the headwinds global markets are facing. Its helped by the fact that miners and oil companies dividends are back at pre-pandemic levels, and they are the main components of the FTSE100. Hence the desire to buy/hold. Total dividend payouts for the FTSE100 are forecast to grow by 36pc this year to £84.1bn, a fraction shy of the pre-pandemic peak of £85.2bn. Interestingly, just 10 companies are forecast to generate the majority of this dividend growth, with miners and banks dominating the list. Rio Tinto, BHP Group and Anglo American top the list, while HSBC and Evraz complete the top five.

Initial support is at the green 30m coral today at the 7029 level and if that holds then we may well see a rise towards the key fib and R1 level at 7085. That level looks fairly key resistance though and we may well see some bear Tuesday kick in there for a run back down towards the 7000 level, and possibly retest that recent low at 6986. The bottom of the 10 day Raff channel is at 6940 and I am thinking that we could well see a test of that soon.

The S&P looks weak still, not helped by the tech sell off yesterday, and the bulls need to break the daily pivot and red 30m coral at the 4310ish area, in order to push higher. If they don't manage to do that today then we may well see a slide on that as well, down to 4280 level again (which also held overnight) and possibly lower - 4272 S1 and maybe even 4235 S2.

Back to the FTSE 100 and if the bulls were to break above the 7085 level then 7126 is next up where we have R2. The 10 day Raff channel is still heading up, though a test of the bottom of that channel would still make sense as the early October weakness persists. Above that then 7142 is next, and 7185 above that. I am not expecting us to get that high today though!

For the bears if they can break 7030, then as mentioned 6986 is probably going to appear. Below that 6940 though and it gets a lot more bearish, with 6907 being the 200ema on the daily. That may well coincide with a slide on the S&P towards the 4234 level though. It would be surprising to see the FTSE climbing while the S&P declines, despite the relative strength int he FTSE100 currently.

So, potential a bit of a bear Tuesday on the cards for today, with 7030, 7000 and 6986 as the main initial support. 7085 and 7126 as the main resistance levels to watch. Good luck today.

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