FTSE 100 live outlook prediction analysis for 5th November 2020
- Stocks rise as path to Biden victory opens up
- Millions of as-yet uncounted votes expected to favour Democrat
- Donald Trump falsely claims victory and says he will launch legal bid to stop count
- Futures swung overnight as ‘blue wave’ failed to materialise
- Dollar strengthened and equities fell on high nerves, but mood has settled since
Europe markets have had a solid run on Wednesday, driven by healthcare. London’s FTSE 100 rose 1.5pc to 5,883.26. Astrazeneca, which said it had started an accelerated review of its potential coronavirus vaccine, led the gains with a 6.6pc boost.
Chinese president Xi Jinping called for global cooperation in the middle of the US presidential election results rolling in. Xi and Trump’s relationship has been rocky, characterised by an ongoing and bitter trade war.
Joe Biden was up to 69.9 million votes as of 12:10pm in New York on Wednesday, according to NPR That means he has surpassed Obama’s record for the most votes of anyone who has ever run for president.
US markets followed Europe’s lead, discarding earlier turmoil and replacing it with rallying share prices. Here’s how Wednesday shaped up:
- S&P500: +2.5pc to $3,453.69
- Dow Jones: +1.6pc to $27,912.60
- Nasdaq Composite: +3.7pc to $11,570.81
Big tech stocks led much of the day, with the NYSE FANG+TM index, which includes major FAANG stocks like Apple and Amazon, jumped 4.3pc. Investors tried to find stocks that would thrive no matter the outcome, and a divided Congress is expected to curb efforts to tax the tech giants.
Biden Edge
Joe Biden looks to be on the brink of winning the White House, but President Donald Trump is far from giving up. The Democrat is one state shy of the needed electoral votes after taking Wisconsin and Michigan, and said he is confident he will win once the remaining votes are counted. Meanwhile Trump opened a legal fight to stop the tallies in at least two states and claimed without evidence that he’s being cheated from victory. Biden is leading in Nevada, while his campaign believes absentee votes in Georgia will push him over the top.[Bloomberg]
FTSE 100 Outlook | Trading Signals | Forecast | Prediction | Analysis
Asian stocks pushed toward the highest since February 2018, led by technology and health-care firms, as investors sought out defensive sectors and backed away from bets on a massive economic stimulus package.
Gains across Asia Pacific trading were broad based and Hong Kong outperformed, while U.S. equity futures climbed and Nasdaq contracts extended Wednesday’s surge after the American election failed to produce a clear Democratic sweep as some had expected.
The reduced likelihood of a multitrillion-dollar package meant a continued bid for Treasuries, with yields extending losses into Thursday. The offshore yuan pared some of its overnight strength. Gauges of volatility from equities to Treasuries and currencies declined.
Well after all that doom and gloom that was in the media if Biden won, the markets ignored it all and climbed as it looks like he has. The S&P could do with cooling off a bit here though so a small pull back before further upside comes along. The bulls will need to defend the 3400 level as we have the 2 hour support just below this at 3392 currently, and rising, so a dip to that level and then a bounce would fit quite well.
For the FTSE 100, we have dropped off the overnight high at 5910, and are hovering around the top of the Raff channels. Again, a dip and rise would fit quite well, as we have the 5890 level for the top of the 20 day channel here as I write this, and then 5930 for the top of the 10 day channel. Above the 5930 level then I would be looking at a rise towards the 6000 level, and with R2 at 6046 for today, possibly as high as this. The markets are certainly in buoyant mood.
On the virus front it looks more likely that we will get a vaccine in wide spread deployment early next year, possibly around Christmas time. The efficacy of it remains to be confirmed but its a step in the right direction. Hopefully this second lockdown doesn’t do too much damage to the economy in the meantime.
For the bears, they will be looking to drive the FTSE down to the 5702 level where we have the daily pivot for today. Below that we have the 5760 area as decent support with the key fib here too and the 200ema on the 30min chart. As such, we may well see a bounce here. The bears got a bit of a beating yesterday and markets remain bullish for the moment, though a pull back would still fit before more upside. Below 5800 then the 2hr coral line at 5703 would be the next decent bounce area.
With yesterday’s volatility, the levels are a lot wider once again, but I am watching 5930 6000 6046 for resistance today. For support 5803, 5703 and also 5840 which is the overnight low.
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
[yikes-mailchimp form=”4″]