Stocks dip but bull themes intact (S&P 500 and FTSE 100 forecast)

Intermediate
  • A dip across major global equity averages over the past 24 hours, but the underlying theme stays bullish from the very strong November rallies.
  • The ongoing “risk on” theme has been driven by:
    • The announcement from Moderna and Pfizer of very positive COVID-19 vaccine trial results
    • Lockdown measures taking hold in Europe, with falling/ plateauing in the numbers of new COVID-19 cases
    • The ongoing Biden bounce
  • But the market is wobbling on the significantly rising COVID-19 cases in the US.
  • Here we review both US and UK benchmark equity indices, with our S&P 500 and FTSE 100 forecasts.

S&P 500 future day trade outlook: Looking for a rebound

A setback Wednesday through 3584.25 support but holding and trying to bounce from above the next 3547.5 level, from 3553.75, to hold onto upside pressures from Monday’s solid rally through various resistances, to stall at 3637.0, plus from last week’s extremely aggressive surge to a new all-time high at 3668.0 (through the key 3541.0 level), to leave the threat to the upside Thursday. 

Day trade setup

  • We see an upside bias for 3602.0 and 3637.0; a break here aims for the record peak at 3668.0 (maybe 3700.0).
  • But below 3553.75/47.5 opens risk down to 3513.0/06.5, which we would look to try to hold. Below targets 3456.75.

S&P 500 future intermediate-term outlook

The early November push above 3541.0 signalled an intermediate-term shift to a bull trend.

  • Upside risks: We see an intermediate-term bull trend to aim for extension targets at 3709.75, 3775/76 and 3866.5.
  • What changes this? Below 3319.0 shifts the intermediate-term bull trend to neutral; through 3226.0 to an intermediate-term bear trend.
8 Hour S&P 500 Chart
8 Hour S&P 500 Chart

FTSE 100 day trade outlook: Rebound sustains bullish theme

A firm advance Wednesday to reject Tuesday’s notable setback below 6340.0 support and to reinforce the bounce from 6295, to retain upside forces from Monday’s rally above 6378/84 and 6439 resistances (to just stall back from below our 6465/66 resistance area, from 6451.5), to build on the earlier November surge to keep the threat higher for Thursday.

Day trade setup

  • We see an upside bias for 6411/14 and 6451.5; a break here quickly aims for 6465/66, then towards key 6512.5.
  • But below 6295 aims for 6246/39 and possibly opens risk down to 6222.

FTSE 100 intermediate-term outlook

The early November push above key 6012.5, signalled an intermediate-term shift to a bull trend.

  • Upside risks: We see an intermediate-term bull trend to aim for 6512.5 and 6871.5, maybe 7000.
  • What changes this? Below 5632 shifts the intermediate-term bull trend to neutral; through 5463 to an intermediate-term bear 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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