FTSE 100 Analysis | Signals | Forecast | Prediction | FTSE 100 Outlook | Trading help
The FTSE 100 erased early gains to end flat yesterday due to weakness in healthcare and commodity stocks, though the index recorded its second consecutive monthly increase. After rising as much as 0.8pc, the blue-chip index ended flat at 7,464, with Rio Tinto, Anglo American , Glencore and AstraZeneca among top drags.
The FTSE 100 still ended the month 1.1pc higher, significantly outperforming the wider European stock aggregate, which recorded its worst month since October 2020.
U.S. equity futures edged down Tuesday as traders weighed the Federal Reserve’s hawkish policy pivot and the corporate earnings outlook to gauge if global shares will continue a recovery from this year’s rout.
European contracts were brighter, rising about 1%. The S&P 500 and tech-heavy Nasdaq 100 on Monday completed their best two-day jumps since April and November 2020, respectively.
Japanese shares were mixed and Australia climbed. They were among the few Asian markets open due to Lunar New Year holiday closures. Australia’s central bank scrapped a bond buying program, a step it said doesn’t imply a near-term interest-rate hike. That sapped the nation’s currency and bond yields.
U.S. Treasury yields and the dollar inched lower. Oil extended a climb that’s helped to take the Bloomberg Commodity Spot Index to another record high. Gold pushed up to around $1,800 an ounce.
Xi Jinping
Billionaire philanthropist George Soros said Xi Jinping may fail to extend his rule of China later this year in contrast to what most observers expect. Soros cited Xi’s enemies within the party, a real estate crisis, ineffective vaccines and a falling birthrate as factors working against him. It’s a bold claim, as most China watchers conclude that he’ll easily extend his rule. “The current situation doesn’t look promising for Xi,” Soros said.
Late Rebound
U.S. stocks ended a volatile month with the biggest two-day rally since 2020, with beaten-down tech shares powering a late rebound. Asian stocks looked set to follow in their footsteps. Japan and Australia futures climbed, while China and Hong Kong are among markets shut for the Lunar New Year holiday. Elsewhere, Federal Reserve officials said they want to avoiding unnecessarily disrupting the U.S. economy as they prepare to start raising interest rates, showing little stomach for an aggressive 50 basis-point move in March.
FTSE 100 live outlook prediction analysis for 1st February 2022
Having dipped a bit yesterday down to the 7450 area the FTSE bulls fought back, helped by the S&P which managed to pop through its key resistance at the 4465 area. That bodes well for a bit more upside across the board, and potentially a test of the daily 25ema resistance on the S&P at 4547. This area looks good for a short, and possibly even a swing short if we get some weakness over the next week or so. Seasonally we can get a dip early Feb before more rallying later in the month. That may well also tie in with the fact that the S&P RSI on the shorter times frames is a little toppy so a drop back to cool that off would make sense.
If the S&P were to push on a bit higher then that may well pull the FTSE up to the 7598 daily resistance level and I would like to see a decent bearish reaction at this level. Of all the markets the FTSE has been pretty resilient so far and does have the potential for some further upside.
Initial resistance is at 7552 though where we have the key fib and just above R1 at 7544 so we may well see a stutter here this morning. As its the start of the month we may well get an initial kick up at the open as the new month money flows in, and that would fit with a rise and dip pattern playing out today. The S&P could easily add 30 odd points, while the FTSE100 adds 50 to 100.
Above the 7598 level then I would be looking for the 7632 r3 level, and we also have a longer term daily resistance level at the 7638 so this could cap any overshoot of the 7600 area.
For the bears they will be looking to break the 7480 initial support levels which is from the 200ema 30m, and the 7490 30m coral level. Should they manage to do that then a drop down to the 7449 key fib, and this level also coincides with the low from yesterday, along with S1 at 7456. As such we may well see a bounce here.
Below this though and 7407 is S2 and and area that the bulls will be keen to defend as its also just above the 7402 daily support, and also the low from Friday at 7415. A break of this would likely see 7370 and the bulls will really need to defend this as a break of this gets things pretty bearish in the short term.
So, looking at a rise and dip to play out today, watching the 4440 to 4450 area on the S&P very carefully for resistance. 7550 and 7600 resistance on the FTSE100; 7480 and 7450 as support.
Good luck today.
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