FTSE 100 live outlook prediction analysis for 17th March 2020
Wall Street plummeted for the third time in a week yesterday after the Federal Reserve’s explosive decision to slash rates to near-zero levels last night. US stocks dropped hard at the open, activating a ‘circuit breaker’ that triggered a 15-minute pause in trading. When trading resumed, losses extended to around 10pc, with the benchmark S&P 500 off 11.3pc at one point. The losses were temporarily larger than Thursday’s – signalling a new worst day since 1987 – but stocks have risen overnight. with the S&P back above 2500 this morning. The FTSE has held the 4850 Raff channel is now at 5220 as I write this.
Coronavirus is now responsible for two of the five worst trading days of all time, however, Donald Trump said that the economy could see ‘tremendous’ economic surge post-virus. The Dow Jones suffered it’s biggest points fall ever yesterday. It lost 2,997.10 points, or 12.93pc, during today’s session on fears the coronavirus will cause the US economy to fall into a recession. Donald Trump’s warning helped to push stocks lower in the final hour of trade, with the S&P 500 and the Nasdaq both closing 12pc down. This means that Wall Street has just suffered its worst day since 1987.
Everyone in the UK must now avoid visits to pubs, restaurants and “non-essential contact” with other people, Boris Johnson has declared, as he implemented thebiggest restriction of civil liberties “in peacetime”.
In a dramatic escalation of the Government’s response to the coronavirus pandemic, the Prime Minister said all “unnecessary” travel must end, meaning all employees should work from home from Tuesday “if possible”. The measures may last for a “prolonged period” which could stretch into months.
FTSE 100 Outlook | Trading Signals | Forecast | Prediction | Analysis
We have had an optimistic 12 hours for once. The new measures announced by Boris should help to contain the virus a bit better (better late than never eh) and if the spread can be slowed then we may well start to have a bit more optimism. I was reading last night that there is more likely to be circa 50000 infected in the UK, and of course those with it mildly and/or self isolating would not be included in official figures.
The 4850 bottom of the Raff channel held well yesterday and the top of that channel is at 5520 for today so we may well see a full crossing take place soon. Maybe! That said, there is a cluster of resistance levels between 5425 and 5450 so we may well see an early rise stall here. With Wall Street’s fall yesterday its possible we have seen the low for the moment, but as you know no one rings a bell when its the low and you only know about it after the event.
Initially today I am looking at the positive 30min chart and thinking we may well get a rise towards R1 at 5380 and then the 200ema at 5453 currently. We also have support from the daily pivot at 5110, the 30min coral at 5041 and also the 100 Hull MA on the 2hour at 5043. As such the 5050 area may well hold, at least initially. But of course the volatility is likely to continue apace, with overshoots, wild moves and so on continuing. Stay nimble and remember when its volatile you can do lower stakes.
Above the 5550 level the top of the 20 day Raff is at 6060 and the markets (and the government!) would be relieved once the price gets back above 6000! Not that I am expecting us to get that high today though.
So for today I am watching 5380 (R1) and then 5450 as resistance. For support 5110 then 5050. Good luck today!
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