Shares plunge, more to come (S&P 500 and FTSE 100 forecast)

Intermediate
  • Only last week we headlined our report “Stocks setting up for a plunge” and the aggressive selloff seen this week has produced a clear and forceful shift to both short- and intermediate-term bear themes across global share averages
  • Once more, this has been driven by:
    • Surging COVID-19 cases, hospitalisations and deaths in Europe.
    • Far more aggressive lockdowns in Europe
    • Rising levels of COVID-19 cases in the US.
    • Practically zero hope of a US economic relief package ahead of the US election.
  • In this report we will review the US and UK benchmark averages, with our S&P 500 and FTSE 100 forecasts.

S&P 500 future day trade outlook: Intermediate-term shift to a wider range 

A significant breakdown through key 3291.25 on Wednesday down to 3260.75, to shift the intermediate-term outlook to neutral, with a range seen as 3198.0 to 3541.0, sustaining negative pressures from the mid-October sell-off below the up trendline from latter September, to leave the threat to the downside Thursday.

Day trade setup

  • We see a downside bias for 3260.75 and 3243/42; a break here aims for key 3198.0 and maybe 3190.25/88.5.
  • But above 3328.25 opens risk up to 3345.75 and possibly 3370.0.

S&P 500 future intermediate-term outlook

The latter October sell-off through 3291.25 signalled an intermediate-term shift to a broader range seen as 3198.0 to 3541.0

  • Upside risks: Above 3541.0 sets an intermediate-term bull trend to target 3587.0, the 3626/30 extension target area and 3709.75.
  • Downside risks: Below 3198.0 sets an intermediate-term bear trend to target 3105.25, 30000.0/2983.25 and 2923.75.
8 Hour S&P 500 Chart
8 Hour S&P 500 Chart

FTSE 100 day trade outlook: Bear threats increasing 

A plunge Wednesday through key May and April supports at 5651/45, 5614/12 and 5525.5 to 5497, extending bear forces from the aggressive plunge last week through the September cycle low at 5739.5, to leave the threat lower for Thursday.

Day trade setup

  • We see a downside bias for 5497 and 5460; a break here aims for 5425.5 and maybe 5377.
  • But above 5612.5 opens risk up to 5647 and possibly 5711.5.

FTSE 100 intermediate-term outlook

The early September push below key 5815.5 signalled an intermediate-term shift to a bear trend.

  • Downside risks: We see an intermediate-term bear trend to aim for 5325/16.5 and maybe towards 5000.
  • What changes this? Above 6267.5 shifts the intermediate-term bear trend straight to an intermediate-term bull trend.
Daily FTSE 100 Chart
Daily FTSE 100 Chart

Editor in chief

Steve Miley has 29 years of financial market experience and as a seasoned expert now has many responsibilities. He is the founder, Director and Primary Analyst at The Market Chartist, the Editor-in...continued

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