FTSE 100 live outlook prediction analysis for 16th October 2020
- London, Frankfurt and Paris markets fall sharply amid new restrictions
- US weekly jobless claims at highest level since August
- Boots sales plunge almost 30pc
- London to enter Tier 2 restrictions from midnight Friday
- Pub group Marston’s to axe 2,000 jobs
- Ryanair cuts winter capacity by a third
European markets sold off sharply as government across the continent tightened restrictions in response to the fresh virus wave. The pound took a sharp knock amid preparations for a partial London lockdown, and a continue impasse over a post-Brexit trade deal.
However, the bulls appeared just below the 5800 level and we have seen. slow and steady rise from there. I am expecting a dip and rise to play out today, and if the S&P can hold that low at 3430 as support the bullish October may well resume. We also have option expiry today.
Markets Mixed
Asian stocks looked set for a mixed start Friday as traders awaited news on U.S. stimulus negotiations and coronavirus cases rose in some parts of the world. U.S. shares edged lower and the dollar climbed. Futures dipped in Japan and Australia, and rose in Hong Kong. The S&P 500 came off session lows as banks rebounded from a two-day selloff and energy shares rallied. House Speaker Nancy Pelosi told Democrats that a Covid-19 relief package won’t wait until January, while President Donald Trump said he’d go over $1.8 trillion in stimulus. Treasuries were steady, while crude oil ticked lower.
Decision Time
The negotiations between Britain and the European Union over their future relationship are lurching toward a crisis after EU leaders told Boris Johnson he must make concessions only hours before the prime minister is due to decide whether to walk away from negotiations. David Frost, the U.K.’s chief Brexit negotiator, said he was “surprised” and “disappointed” at the warning and said that Johnson would respond on Friday. The spat raises the risk that Johnson will decide to pursue a no-deal Brexit. Without an accord, millions of businesses and consumers will face additional costs and disruption when Britain leaves the single market on Dec. 31.[Bloomberg]
FTSE 100 Outlook | Trading Signals | Forecast | Prediction | Analysis
Asian stocks and U.S. equity futures were mixed Friday as investors mulled continued talks over American stimulus and the economic impact of fresh restrictions in some parts of the world to fight the resurgent coronavirus.
Shares slipped in Tokyo, Shanghai and Seoul, and climbed in Hong Kong. S&P 500 futures fluctuated after the benchmark came off its session lows as banks rebounded from a two-day selloff and energy shares rallied. Treasuries and the dollar were steady, while crude oil retreated. The yen strengthened.
President Donald Trump said he is willing to go beyond the $1.8 trillion offer for relief that’s already been put forward, but Senate Majority Leader Mitch McConnell rejected that. Treasury Secretary Steven Mnuchin told Pelosi Trump will personally lobby to get reluctant Senate Republicans behind any stimulus deal they reach.
The bulls have stepped up to the plate after yesterdays drop, on both the FTSE and the S&P. 3430 is the key S&P support for now, if we see a retest of this level and it holds then we should see that act as a springboard for a rise during the rest of October. Might not get that low again today though as we have decent support at 3469 and then 3452. Stimulus measures in the US progress, and will probably settle at $2tn. For the FTSE the bulls will be keen to get the price back above the 6000 level sooner rather than later, and a move above 5890 will help cement that path. Brexit day today too!
For today we have option expiry so we may well see some more volatility during the day, and as its Friday it can pay to be a bit more cautious. I am expecting a dip and rise today. We have initial support from the daily pivot today at 5860, and below that a decent green 30min coral at 5834 – a bounce off this level would fit nicely. However, a move below 5835 then the key fib at 5805, an S1 at 5788 may well be seen, the latter coinciding with yesterdays low to set up a decent double bottom on the daily chart should see a decent bounce.
Resistance wise, initially we have the key fib at 5897, along with another test of the 100 Hull MA on the 2hr at 5889. As such we may see a stutter here first thing. Above this then the 200ema is at 5922, and just below R1 at 5935. At this level we are also close to a test of the 25ema at 5944 on the daily chart, which has gone bearish with that drop off 6040 the other day.
So make or break day today for the bulls looking at the chart, they really need to buy up the dip otherwise we will get more bearish next week. I am liking the look of 5835 and 5790 as the main supports, 5900 5935 as the main resistance levels. Watch the S&P for a dip and rise on that too, it has to hold that 3430 level on any dip, but may well bounce off its green 30min coral at 3469 or thereabouts as its a steadily rising line at the moment. Good luck today and have a good weekend.
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