More bull today for 7480 possibly 7538 | 7435 7385 support | Earnings season | learning chat room

Markets rattled by trade again | SPX finally drops | 7240 7197 support | 7355 resistance

16th April 2019

The stocks surge on US markets towards a new record high was halted yesterday afternoon despite rising hopes of a US-China trade deal. The 13pc slump in revenue at investment banking giant Goldman Sachs has dampened the buoyant mood set by expectations-beating figures at JPMorgan and Wells Fargo on Friday.

The S&P dipped back below 2,900 points, dragged down by the 3pc drop in Goldman Sachs shares.

The FTSE 100’s heavyweight miners fell after pulling back following their recent rally. The index closed flat, inching down 0.19 points to 7,436.87, with a fairly flat day overall. The long from 7425 yielded a few points but the S&P long got stop hunted unfortunately, and has risen since. It is still looking like a rise towards the 7475 level is on the cards.

US-China trade deal hopes have also been lifted by a report revealing that the Trump administration has climbed down on demands over Chinese subsidies for its industrial sector. In order to secure an agreement with Beijing, the US has decided to push for concessions on other issues after facing strong resistance from China over removing the subsidies, Reuters has reported. The US has instead concentrated on getting more access to Chinese markets and bolstering intellectual property rights, it said.

FTSE 100 Trading Signals, Forecast and Prediction

With yesterday (and Friday in fact) being fairly flat we have now got a bit of compression on all the various support and resistance levels. As such the main support and main resistance areas are not that far apart. However, I am still expecting a rise towards the daily resistance zone at 7470/7480 as per yesterdays analysis and I am thinking that we may well see that today. The markets have remained positive overnight, and the 30min FTSE chart remains bullish for the moment. The bears were not able to break below the 7420 level yesterday so that level is certainly forming decent support for the moment.

FTSE 100 Trading Signals, Forecast and Prediction
FTSE 100 Trading Signals, Forecast and Prediction

The daily Raff channels are still heading up so we may well see the rally continue further. As mentioned yesterday should the bulls break the 7480 level then we will probably see the next resistance level at 7535 in fairly short order. We also now have the top of the 10 day Raff channel there for today. That said I think that R3 at 7482, coupled with the fact that the daily charts have been showing that 7475 area as resistance for a few days now, will likely see a stutter at this level.

If the bears were to break below the 7420 level today then I wouldn’t be surprised if we drop down to S3 at 7396. We also have daily support at 7383 below that, then 7355, and the daily charts are showing some longer term support at 7248 now as well. 7355 might well see a bounce if tested though.

We have been fairly bullish so far this year and I am watching the 7480 and 7540 areas closely, as we may well see a turn at one of these, for a retrace back down to that 7250 support area. The S&P remains bullish and looks like a rise to 2925 is still possible – R3 and the top of the 10 day Raff channel here.

With a shortened trading week this week we may well see some profit taking ahead of the Easter weekend, and thus the rally may falter a bit as we head towards the close on Thursday.

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