The main news over the weekend was of course the German election, with Merkel winning her fourth term, albeit with a smaller share of the vote. In echoes of the results in the UK, the previous coalition partners, the SDP, took a beating so she will need new partners, and there was a gain for a far-right party for the first time in 60 years. Meanwhile, Japan may do the opposite of the West and go for further stimulus, just as the US (and possibly the UK) look to start reducing theirs.
In terms of futures prices, the S&P has stayed around the 2500 level (actually hit 2507 overnight on that rise in Asia), while the FTSE 100 has stayed above 7300.
The war of words between North Korea and the U.S. continues to rumble on. At the UN on Saturday, North Korea foreign minister Ri Yong Ho said Trump – not Kim – is the one on a suicide mission, adding that the regime was prepared to strike first with nuclear weapons.
Will we get a bull Monday? FTSE 100 Outlook and Prediction
For today I am thinking that we will get an initial rise towards the fib level at 7335 before a dip down to the main support at the 7273 area. The bulls might well defend this with a view to pushing back above the 7300 level. If the bulls can break the 7335 resistance area then it looks like they might be able to push the FTSE 100 up towards the top of the 20 day Raff channel at 7395. Be a fairly big task to break above that early this week but we may well see that later on, if they can build a bit of momentum.
On the flip side, the bears will be looking to drop this down below 7300 and test the 7200 area. There is initially support at the 7273 level this morning, and with a bull Monday prospect we may well see some buying here, though there is also a key fib slightly lower at 7242. Longs at both these levels with fairly tight stops might well catch a bounce.
So, watching 7335 for initial resistance and a rise, dip rise sort of day.