FTSE 100 Analysis | Signals | Forecast | Prediction | FTSE 100 Outlook | Trading help
US stocks have continued to drop yesterday as fears over conflict in Ukraine and interest rate worries spark chaos on global markets. Wall Street’s three major indices fell at least 1pc, resuming a sell-off after volatile trading on Monday. The benchmark S&P 500 is on course to confirm a correction after falling 10pc from its record closing high earlier this month.
Meanwhile, the FTSE 100 rose 0.4pc as it rebounded from a rout that wiped £53bn off the blue-chip index on Monday.
Fears are mounting that Russia will move its troops into Ukraine, while investors are also bracing for the first post-pandemic interest rate hike in the US when the Federal Reserve finishes its meeting
However, today U.S. equity futures climbed and Asian stocks were mixed as traders awaited a Federal Reserve decision that could buffet markets by shaping expectations for monetary-policy tightening.
Japanese shares wavered, while China’s CSI 300 index edged up but remained on the cusp of a technical bear market with state media calling on investors to hold their nerves amid this year’s global selloff. U.S. contracts initially sank in Asia before turning higher. European futures were in the green.
Wall Street delivered another volatile session Tuesday. The S&P 500 erased a near-3% intraday slide but then fell again to the lowest since October, led by a drop in technology stocks. Microsoft Corp. rebounded in extended trading on reassuring forecasts after releasing earnings.
The benchmark U.S. 10-year Treasury yield was little changed ahead of the Fed, while a dollar gauge fluctuated. Crude held most of its recent rally, in part on the risk that any Russia-Ukraine conflict could disrupt supplies.
Omicron Shot
Pfizer is starting a clinical trial of a Covid-19 vaccine that targets the omicron variant. The drugmaker and its German partner, BioNTech, said they were making preparations in case the protection offered by current booster shots wanes. Meanwhile, Israeli health experts have recommended offering a fourth dose of coronavirus vaccine to all adults; the European Union is shifting to a travel model based on vaccination status; China has offered to help Hong Kong with mass testing as the city attempts to stamp out the virus; and hospitalized Covid survivors had an almost five times greater risk of dying in the following 10 months than a sample taken from the general population, according to a new study.
Getting Personal
President Joe Biden said he would consider personal sanctionsagainst Vladimir Putin if he orders an invasion of Ukraine, escalating U.S. efforts to deter the Russian leader from war. The warning came after the U.S. put 8,500 troops on heightened alert for deployment to bolster NATO forces in Eastern Europe if needed. But Ukraine’s top military official downplayed the risk of a full-scale Russian invasion and laid part of the blame for heightened tension on international media.
FTSE 100 live outlook prediction analysis for 26th January 2022
The big event today is of course the FOMC at 7pm with the outcome of their meeting and what they may or may not do with regard to rates etc. As such we will probably get a bit choppy (though maybe mildly compared to some of the moves this week!) at that time so bear that in mind.
Initially today we may well see a dip off the 7450 area which got a reaction last night as the 200ema 30minute was here. We dropped down to the 7350 level last night, however initially we have support at the daily pivot at 7394 to start with. Thats also given some weight by the 30m coral which is now at this level. It would be the second test of that since it changed to green as well – it got a good reaction yesterday at the 7320ish area.
If the bulls can defend any opening drop (and hopefully they will for the weak start, strong finish for this week plan to play out) then we should see a rise back towards 7450, but more likely the R1 level at 7483. Obviously the bulls will want to push even higher and try to recapture the 7500 level. R2 is up at 7540 but may need bullish support from the US markets and the Fed to get that high. Buy the rumour sell the news pattern today quite possibly.
If the bulls can start to gain the upper hand then we bring the daily resistance levels at 7588 and 7600 back into play and “could” see them as we close out the week. The FTSE has actually remained pretty strong while the US has tanked, in a good sign that we may well see continued strength this year on the FTSE100.
However, (theres always a but!) if the bears break below the 7390 level this morning then 7348 looks likely to get tested as we have the key fib here, and then 7337 for S1. 7355 is the Hull moving average support on the 2h chart though so a bit of a cluster of support here.
A break of 7340 though and the bears will start to gain the upper hand again and a drop back to 7305 (recent low) and then 7290 and 7260 are the levels to look at below that. Bit unlucky that the bearishness yesterday didnt quite drop down the 7290 level as it turned into a decent bounce from just above.
S&P500 bulls will want to break 4400 and more crucially 4440 to negate the bearish and start to turn things more in their favour. 4390 and 4440 are the key resistance areas on that, with 4345 looking key support to start with. 4310 below that.
For the Dax, 15115 is key 2h support so may well see a bullish reaction, and we have 15105 as the green 30m coral (and rising) to coincide with that. 15009 is the key fib lower down, while 15250 is the key fib for initial resistance – we are just at that as I write. A push up to the 200ema at 15380 would fit well today though if we do see the buy the rumour, sell the news pattern.
So, stay nimble today and don’t forget the FED later. Dividend effect today is only 1.71 so wont have much bearing on proceedings.
Good luck today.
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