News and Trade Ideas (Indices)

[MongiIG]

FTSE 100, DAX 40 and S&P 500 drop on banking sector woes

Outlook on FTSE 100, DAX 40 and S&P 500 amid risk-off sentiment due to panic surrounding the banking sector.

Source: Bloomberg

 

Indices Shares Bank FTSE 100 S&P 500 Silicon Valley Bank

 Axel Rudolph FSTA | Senior Financial Analyst, London | Publication date: Friday 10 March 2023 

FTSE 100 drops to six-week low on worries about the banking sector

Worries about the solvency of Sillicon Valley startup bank SVB Financial and the liquidation of crypto bank Silvergate following a mass withdrawal of deposits after the collapse of the FTX exchange have led to strong global risk-off sentiment with the FTSE 100 slipping to six-week lows close to 7,750.

Further down the mid- to late January lows can be found at 7,725 to 7,708 which are expected to offer support on Friday.
Minor resistance can be spotted at the 7,811 23 January high and major resistance between the mid- to late February lows at 7,850 to 7,854.

Source: Tradingview

DAX 40 slips towards its October-to-March uptrend line

The DAX 40, although also coming off, has to a large degree been spared the panic surrounding the global banking sector with investors worrying that higher interest rates are pressuring bank balance sheets due to a rise in borrower defaults.

The index is seen slipping back towards its October-to-March uptrend line at 15,330 which may offer support on Friday around the publication of US unemployment data. Were it to be slipped through, the January peak at 15,272 would be in sight.

Immediate resistance can be spotted at the 1 March high at 15,480 and further resistance at the 23 February high at 15,556 as well as at the mid-February high at 15,552. Below 15,272 sits good support between the late February and early March lows at 15,184 to 15,145.

Source: Tradingview

S&P 500

The S&P 500 slid through its 200-day simple moving average (SMA) at 3,935 to levels last traded in early January as cracks appear in the banking sector ahead of Friday’s US Non-Farm Payrolls data release.

SVB Financial Group’s share price declined by 60% after the launch of a $1.75 billion share sale on Wednesday to shore up its balance sheet and as the Silicon Valley Bank had to reassure its shareholders that their money was safe, provoking an over $80 billion drop in the value of bank shares and pushing US equity indices lower.

The now breached October-to-March uptrend line at 3,944 and 200-day SMA at 3,935 do not bode well for the bulls since unless a bullish reversal were to take the S&P 500 back above these on a daily chart closing basis, the December low at 3,764 will represent the next downside target.

Near-term support comes in at the 19 January low at 3,886 while resistance can be spotted at 3,935 to 3,944.

Source: Tradingview

[MongiIG]

FTSE 100, DAX and S&P 500 under pressure as banking crisis rocks markets

The bank failures in the US have hit risk appetite, and indices are down sharply in early trading.

Source: Bloomberg

 Chris Beauchamp | Chief Market Analyst, London | Publication date: Monday 13 March 2023 

FTSE 100 gives up 2023 gains

A pullback here has seen the index drop to its lowest level since early January.

While this has wiped out the gains made in January and February, the uptrend is still intact, although the index has dropped below the 50-day simple moving average (SMA). A revival above 7800 would help to suggest a higher low is in place, and might then indicate a move back towards 7800 is developing.

Alternately, further losses head towards the 7615 peak from the beginning of December, and then towards the 7500 area.

Source: ProRealTime

DAX drops to 50-day SMA

Aside from a push higher last week, the index remains around the area it first reached at the beginning of February.

This is quite remarkable given the volatility we have seen recently, and points towards some impressive strength. Dips towards 15,200 have found buyers, so unless we see a reversal below this level the bullish view remains intact.

While buyers have been unable to sustain a fresh drive higher, this consolidation may provide the foundation for a move to 15,600 and higher once again.

Source: ProRealTime

S&P 500 struggles on bank crisis headlines

Last week’s losses took the index back to levels last seen at the beginning of the year.

While it has bounced from Friday’s lows at 3850, the overall impression remains firmly bearish. It is possible that we will see a move below 3850 that then tests the December lows around 3780.

It would require a move back above 4000 to put the price on a more bullish footing, and would then target 4100 and then 4170.

Source: ProRealTime

[MongiIG]

FTSE, DAX and Nasdaq expecting further volatility as US CPI release looms

The FTSE, DAX and Nasdaq have settled somewhat after their recent banking-led declines, although todays US CPI release brings further volatility.

Source: Bloomberg

 Joshua Mahony | Senior Market Analyst, London | Publication date: Tuesday 14 March 2023 

FTSE 100 at risk of further declines

The FTSE 100 has been hit hard over the course of the past week, with concerns over potential contagion in the banking sector bringing a major risk-off tone throughout markets.

However, the impact this is also having on expectations at the Fed has brought dollar weakness, with the gains seen for GBP/USD bringing about a secondary source of weakness for the FTSE 100.

From a wider perspective, this current decline looks likely to be a retracement of the 7296-8045 rally, thus highlighting the potential for us to bottom out around the 76.4% Fibonacci support level at 7473.

However, whether we see that next leg lower depends on if the index can break through 7529, signalling a new period of weakness coming to the fold. As such, another leg lower looks likely if we see price close below that level, with 7473 in view.

Source: ProRealTime

DAX pauses at key support

The DAX has similarly been on the back foot of late, with price falling back down into the 14903 support level yesterday.

That threshold will be key in determining where we go from here, with a decline through support bringing about a fresh sell signal for the index.

Source: ProRealTime

Nasdaq rolling over from Fibonacci resistance

The Nasdaq has been better shielded than the likes of the Dow and S&P 500 thanks to the absence of banking stocks.

Nonetheless, we are seeing the index weaken ahead of the crucial inflation data release this afternoon. With headline CPI expected to post a welcome 0.4% decline, there may be a focus on the core figure given the expectations that it will remain stubbornly high at 5.5% (currently 5.6%).

Therefore, there is risk of further declines given how market pricing for the Fed’s rate decision appears to be a coin toss between a 25 or 50 basis point hike. Having turned lower from the 61.8% Fibonacci resistance level, there is a risk of another move lower here. However, the rebound from trendline support does raise the possibility of a move into 76.4% resistance.

With a clear downtrend seen over the past month, we would require a push through 12468 to bring a wider bullish reversal signal.

Source: ProRealTime

[MongiIG]

FTSE 100, DAX 40 and S&P 500 mixed post Tuesday rally

Outlook on FTSE 100, DAX 40 and S&P 500 amid UK budget and ahead of Thursday’s ECB rate decision.

Source: Bloomberg

 Axel Rudolph FSTA | Senior Financial Analyst, London | Publication date: Wednesday 15 March 2023 

FTSE 100 recovers from ten-week low ahead of UK budget

The FTSE 100 benefitted from US inflation coming in at 6% as expected on Tuesday, leading to a recovery in US stock markets ahead of Wednesday’s UK budget in which banks are likely to be in particular focus.

With fears of a run on banks in the UK having dissipated since HSBC’s purchase of SVB’s British subsidiary for £1 and Prime Minister Rishi Sunak’s assurance that there is no “systemic risk” in the UK banking sector, the FTSE 100 is in a position to possibly recover further this week as the budget is likely to introduce measures designed to support renewed economic growth in the UK.

A rise back towards the previously important support zone, now because of inverse polarity resistance area, at 7,708 to 7,724 may ensue over the coming days. It consists of the mid- to late January lows and needs to be exceeded for a medium-term recovery to become technically possible.

Support can be found at Tuesday’s 7,501 low, a fall through which isn’t expected to be seen on Wednesday but would push the 200-day simple moving average (SMA) at 7,422 to the fore.

Source: ProRealTime

DAX 40 recovers from key support zone

The DAX 40, although having fallen sharply on Monday, managed to find support in the significant 14,992 to 14,904 zone, made up of the mid- to late January lows on Tuesday and recovered to above the 55-day SMA at 15,160 as US CPI data came in at an expected 6.0% year-on-year.

On Wednesday the 55-day SMA may act as support, together with the 15,145 early March low, ahead of the 15,100 region before Thursday’s ECB rate decision which is still expected to see a 50-basis point rate hike to 3.5%. The DAX 40 may thus still revisit the early to mid-February lows at 15,245 to 15,276 which may act as resistance, though.

For a continuation of the October-to-March uptrend to be seen, the breached uptrend line, now resistance line, at 15,430 and, more importantly, Monday’s high at 15,486 would need to be overcome.

Source: ProRealTime

S&P 500 bounces back amid falling US CPI

The S&P 500 bounced off its ten-week low at 3,809 and rallied by around 1.5% as US Consumer Price Inflation (CPI) fell to 6% in February as expected, the lowest since September 2021, boosting stock markets.

The S&P 500 has thus risen back to the 200-day SMA at 3,932 which has capped the upside over the past four trading days. A rise and daily chart close above it is needed, for the next higher 55-day SMA at 3,995 to be reached, together with the psychological 4,000 mark.

Slips should find support around the 19 January low at 3,886 and at Tuesday’s 3,855 low.

A currently unexpected fall through this week’s low at 3,809 would open the way for the December low at 3,764 to be reached.

Source: ProRealTime

[MongiIG]

FTSE 100, DAX 40 and Nasdaq 100 recover, the latter even on track for a bullish weekly close

Outlook on FTSE 100, DAX 40 and Nasdaq 100 as the global banking crisis seems to abate and as the ECB hikes its rates by 50-basis points to 3.50% but may stop there.

Source: Bloomberg

 Axel Rudolph FSTA | Senior Financial Analyst, London | Publication date: Friday 17 March 2023 

FTSE 100 recovery underway but expected to end week sharply lower

Having slid to negative territory for the year, the FTSE 100 managed to stabilise on Thursday, as a US rescue package for First Republic Bank eased market concerns about another bank failure.

However, the FTSE 100 will nonetheless most likely see its sharpest weekly loss since February 2022. Having said that, the fact that the index stabilises around its 200-day simple moving average (SMA) could indicate that the medium-term bullish trend seen since October may still be intact, provided that no drop through the December-to-March lows at 7,310 to 7,296 is seen.

Slips should find support along the 200-day SMA at 7,422 with the 7,541 to 7,553 mid- to late December highs representing the first upside target.

Only a rise and daily chart close above Tuesday’s 7,644 high would indicate that a probable resumption of the medium-term uptrend is taking place.

Source: ProRealTime

DAX 40 recovers on hopes of averted banking crisis

The DAX 40, although having fallen sharply this week, managed to find support at Thursday’s 14,659 three-month low as fears of a full-blown banking crisis abate and the European Central Bank (ECB) stuck to its guns by raising its interest rates by 50-basis points to 3.50%, its sixth rate hike in a row.

The fact that the central bank indicated that it didn’t intend to hike rates further in the near future also helped European equities stabilise.

The DAX 40 may reach the early March low at 15,144 on Friday, above which meanders the 55-day SMA at 15,194. Only a rise and daily chart close above the next higher 15,273 high seen on Tuesday would indicate that the recent rout has likely ended with the resumption of the October-to-March medium-term uptrend then becoming more probable.

Minor support comes in at Monday’s low at 14,885.

Source: ProRealTime

Nasdaq 100

Monday’s drop in the Nasdaq 100 to its ten-week low at 11,675 due to the collapse of Silicon Valley Bank was followed by a bullish reversal in the index off the 200- and 55-day SMA as it became clear that central banks not just in the US but also in Europe were going to provide liquidity to those banks who needed it in order to avert a global banking crisis.

The fact that First Republic Bank will receive a $30 billion deposit from other major US banks helped alley investors’ fears further on Thursday with the Nasdaq 100 not only rising but also closing on a daily chart closing basis above its last reaction high at the 6 March 12,467 high.

This and the fact that the index is the only one amid its peers to likely end the week in positive territory is technically bullish price action and points towards the February peaks at 12,747 to 12,896 being in sight once more.

Support below 12,467 can be spotted at last Thursday’s 12,339 high.

Source: ProRealTime

[MongiIG]

FTSE 100 weakens but DAX and Nasdaq 100 futures move up in early trading

Indices faltered after the Fed last night, and remain mixed this morning, but the DAX and the Nasdaq 100 are looking more positive.

Source: Bloomberg

 Chris Beauchamp | Chief Market Analyst, London | Publication date: Thursday 23 March 2023 

FTSE 100 struggles to move higher

After surging on Tuesday, the price dropped back slightly yesterday, and it has edged down in early trading from overnight highs.

The index is still firmly up on the lows from Monday, so some consolidation is not surprising. It would need a move back below the 200-day simple moving average (SMA) to suggest a more sustained period of weakness that could see Monday’s lows tested once again.

Conversely, a bounce back above 7580 would hand the buyers the advantage and suggest a further recovery that might result in an eventual move back to the February highs.

Source: ProRealTime

DAX claws back Wednesday losses

Similarly, this index faltered at the 50-day SMA yesterday, but given it has rallied 900 points from the lows this short-term period of indecision is not surprising.

A revival above the 50-day SMA would mean that the buyers have reasserted control and that a move back to the March highs is back in play. The pullback of the past two weeks does suggest a higher low has been formed.

Thus it would need a move back below 14,400 to really suggest that the sellers are back in control, with a drop below 14,600 indicating that the outlook has shifted to neutral in the short-term.

Source: ProRealTime

Nasdaq 100 pushes off overnight lows

The index continues to be the best of the bunch on Wall Street, rallying back to the February highs this week.

An initial move above 12,900 and towards 13,000 last night in the wake of the Fed was beaten back, but the bounce is intact, after the recovery from the 200-day SMA last week.

Now the index needs a daily close above 13,000 to signal that a break to the upside has occurred, which would then put a move to the August highs around 13,7000 into play.

Source: ProRealTime

[MongiIG]

FTSE 100, DAX 40 and Nasdaq 100 likely to end week on a quieter note

Outlook on FTSE 100, DAX 40 and Nasdaq 100 as volatile week draws to an end.

Source: Bloomberg

 Axel Rudolph FSTA | Senior Financial Analyst, London | Publication date: Friday 24 March 2023 

FTSE 100 tries to stabilise as UK retail sales unexpectedly rise

The FTSE 100 index has tried to find support along the 200-day simple moving average (SMA) at 7,429 as UK retail sales surprised to the upside and rose by 1.2% month-on-month in February from an upwardly revised 0.9% gain in January and versus an expected rise of 0.2%.

Were the index to close on Friday around the 200-day SMA, it would mark the first slightly positive week after the past couple of weeks’ strong sell-offs due to the banking crisis.

Provided that Thursday’s low at 7,416 holds on a daily chart closing basis, a recovery next week towards this week’s high at 7,587 may ensue, a rise above which would push the 15 March high at 7,641 to the fore, above which sits strong resistance at 7,708 to 7,724, consisting of the mid-January and early February lows.

Support below the 7,416 low can be found around the 7,296 December low.

Source: ProRealTime

DAX 40 eyes 55-day SMA while 15,011 holds

The DAX 40 slid back below its 55-day SMA at 15,258 on Wednesday and capped it's attempt to move higher again on Thursday as investors continue to grapple with tightening monetary conditions and lingering worries about further bank failures being seen.

From a technical perspective, while Thursday’s low at 15,011 holds on a daily chart closing basis, further upside back towards the 55-day SMA and this week’s high at 15,258 to 15,304 is likely to be seen.

An advance and daily chart close above the 15,304 level would open the way for the 13 March high at 14,486 to be reached, a rise above which would confirm the resumption of the October-to-March medium-term uptrend.

Were Thursday’s low at 15,011 to be slid through, however, the mid- to late January lows at 14,992 to 14,904 may be revisited. Further down sits the 13 March low at 14,885.

Source: ProRealTime

Nasdaq 100 likely to end week on a quieter note

Despite a lot of volatility having thrown the Nasdaq 100 around this week and the US 2-10 yield curve un-inverting following an earlier inversion, normally a sign that a recession is on its way as short-term yields fall sharply in anticipation of rate cuts, the index looks bid and may well end the week higher for a second week in a row.

The February-to-March highs at 12,896 to 12,947 need to be exceeded on a daily chart closing basis, for further medium-term upside to enter the fray with the minor psychological 13,000 mark representing the first upside target.

Since banks continue to borrow heavily at the Fed's discount window, a sign that stresses remain despite the actions taken by regulators, a slip through the March uptrend line at 12,715 remains a possibility and may lead to the 17 March high at 12,673 being revisited.

Only a slip and daily chart close below Wednesday’s low at 12,545 would cloud our bullish outlook, though, and put Monday’s low at 12,398 back on the map.

Source: ProRealTime