FTSE 100 outlook prediction analysis for 13th November 2019
Well that played out well yesterday as we got the rise to the 7385 resistance level on the FTSE 100 as it followed its European counterparts higher. We then saw the bears appear as the S&P hit the 3103 level and subsequently the FTSE 100 dropped back, and we were able to run the short. The FTSE has dropped back further overnight as the worm has turned yet again on the US/China trade saga. Trump said the U.S. will increase tariffs on China in case the first step of a broader agreement isn’t reached. “If we don’t make a deal, we’re going to substantially raise those tariffs,” he said Tuesday in a speech to the Economic Club of New York. “They’re going to be raised very substantially. And that’s going to be true for other countries that mistreat us too.”
Trump has said that China “is dying to make a trade deal” and that the US is close to signing Phase One trade deal very soon. He added that Washington will only accept a deal “if it is good for the US and US workers”.
President Trump told the Economic Club of New York:
- “We have delivered on our promises and exceeded our expectations by a very wide margin.”
Trump said he reversed policies imposed by his predecessors that restrained the economy. He faulted regulations and trade deals advanced by other presidents and said the “political class sold out American workers.” He also took credit for the 2017 GOP tax cuts that Democrats said benefited the wealthiest Americans.
- “At the heart of our economic revival is the biggest tax cut and reforms in American history.”
Markets Mixed
Asian stocks fell Wednesday as investors continued to weigh the likelihood of a partial U.S.-China trade deal. The dollar and Treasuries advanced. Futures pointed lower in Hong Kong and Japan, and rose in Australia. U.S. stocks fluctuated before ending modestly higher as remarks by President Donald Trump didn’t add much insight into negotiations between the world’s two-largest economies. The 10-year Treasury yield slipped as the market returned from Monday’s holiday. Meanwhile, the dollar rose for the sixth time in seven sessions. Elsewhere, crude edged lower, gold edged higher and nickel headed for its longest run of losses in almost a year.
FTSE 100 Outlook | Trading Signals | Forecast | Prediction | Analysis
I am still running the short form 7383 yesterday and have just taken a bit of profit at the 7337 level after the overnight slide. The 30min chart remains bearish for the moment, and with the S&P dropping off the 3103 level nicely, I am expecting more downside on that towards the bottom of the Raff channels initially at 3072. Also watching for a test of S3 at 3060 in the near term. That should then also drag the FTSE down a bit further, probably to the 7280 area where we have the bottom of the Raff channels. As mentioned yesterday I still think we get a dip before the end of year rise.
One thing to bear in mind today is that we have a larger 15.9 dividend which may well help underpin the FTSE bulls. As such, the downside may be capped till later and we won’t get as low as sub 7300.
We have a cluster of resistance levels at the 7355 area, namely the 200ema, daily pivot and the coral on the 30min so I would expect a reaction here. The ASX200 sold off steadily during Wednesday and we may well see the bears start to build on the drop that started yesterday. The fear/greed is still on 88/100 so a dip back across the board would make sense, though markets are never logical!
Initial support is at S1 at 7320 and then we also have a key fib at 7310, so if we dipped this low to start with we may see this area hold. The bulls will be keen of course to keep the price above the 7300 level having brought it up from the 7260 level on Monday.
Markets are still jittery and driven by news, though with the US making all time highs a drop back is I think inevitable soon. And then they will get pumped again! Still thinking we may well see strong end to the year though, especially with the steadily rising Raff channels. A drop down towards the 7230 area and then a climb would all fit in nicely.
So, staying nimble again today, watching that 7355 area to start with, then 7410 above that, if the bulls were to break R1 at 7388. On the support side, watching 7310, 7280 and then 7252.
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