Yesterday the 7400 lower FTSE support area, along with the 3240 S&P support levels held, and continued to do so, so much so that we have had another push up from them overnight. If the bulls can continue to defend these areas then a rise back up looks likely, even more so if the virus starts to get under more control.
FTSE 100 Outlook and Prediction
With the 7400 and 3240 levels holding alright so far, we have a bit of a springboard for a push higher, probably as far as the 25ema on the daily chart at 7540ish before we see another leg down. Markets are using the virus as the excuse to pull back which quite frankly was well overdue. That said, corrections in a bull market are healthy and needed and it may well play out that we get a further leg down before we resume the strong upward trend. 3200 on the S&P for example...
For today we get an initial dip down to the 30min support at the 7420 level then a long here looks like its worth a go for a rise towards the 2 hour resistance at 7466. If the bulls were to break above this ten the 7515 level is next up, with that daily resistance mentioned above that at 7545. The bottom of the 20 day Raff channel held yesterday, and we now have the top of the 10 day channel at 7606 - don't think we get that high today but if we were to see this sort of area again then a turn and burn at this level would probably occur. The S&P is dictating the pace and moves quite well at the moment too, so a rise from 3240 towards 3276, and also the gap at 3286 would play out before another leg down towards 3200. That would see the FTSE 100 drop back down towards 7365 level where a bounce may well occur as we have the 200ema on the daily and also the bottom of the Raff channels in this area. If we were to go lower than this then 7216 is S3 for today, while S2 is 7303.
I am feeling that we will see a bit of a relief rally/dead cat bounce/bit of bullishness today. We have not had a bearish Monday for a while so a bull Tuesday may well play out today, to retrace a bit of yesterdays fall. The FTSE has a gap at 7556, the SP at 3286 and a rise to those areas before further downside would fit in fairly well. Then a rise from new lows towards the end of the week.
Should the bears break below 7420 today, then 7384 fib level is still in play and tallies with yesterdays low, with 7365 below that were we have the 200ema daily. For this morning I think that we will follow the ASX200 with a bullish session today. The FTSE has been a tricky one this month with overshoots of the key levels seemingly quite regular at the moment which does not make life easy!