Nick Batsford, CEO of Tip TV, opened the Tip TV Finance Show alongside Zak Mir, technical analyst for ShareProphets.com, and Bill Hubard, chief economist for Bullion Capital to discuss the major indices and the potential of a Fed rate hike next week.
Will the Fed hike next week?
Hubard seemed certain and continued to back a Fed rate hike this September, and added that missing this opportunity will further hinder the US economy. He outlined that no matter the result of next week, rates will change, whether it comes in September or December. Meanwhile, Mir commented that the worst thing that the Fed could do next week is to not do anything.
Major Index Outlook
The FTSE 100 is testing the 6250 resistance level, according to Batsford, but a reversal below 6000 would see more downhill. Mir added that the FTSE 100 around the 6000 level will always have a lot of interest.
Batsford commented that the S&P 500 could activate its potential cup-and-handle today should it break and close above 1993.48. Plus, base activation on the index could see a sharp acceleration to 2100, and the outlook continues to improve. Mir insisted that the S&P 500 is falling off a cliff, and that even if it breaks consolidation the shorts will be stopped out.
In terms of the DAX, Batsford noted how sellers dominate, and would confirm a primary downtrend if it headed below the 10000 level. A 50% Fibonacci retracement has also been seen in the DAX, outlined by Mir.
The DIJA is testing support at 16000, Batsford noted. A breach would confirm a primary down trend, with recovery above 17000 unlikely, but would indicate a relieving rally.
Batsford highlighted how the Nikkei 225 has found support at 17500, and could break above 19000, which may also lead to a test of the 21000 level.
The Shanghai Composite Index continues to test the support at 3000.
Alarm bells sounded for the world economy
Batsford noted CitiGroup Inc, and they outlined how there is a 55% chance of some kind of global recession in the next few years, most likely one of moderate depth and length.