Stocks plunge for deeper correction risks – FTSE 100 Forecast

Intermediate
  • A more aggressively negative theme for risk assets over the past 24-36 hours as markets have reacted to a downbeat outlook for the US economy from the Fed on Wednesday.
  • This, alongside increases in the numbers of deaths and cases for the COVID-19 coronavirus is some US States has seen the major global chare indices plunge lower Thursday, having already dipped lower on Tuesday/ Wednesday.
  • This has seen significant support levels from the rallies from mid-May violated and indicates deeper correction risks for Friday and into next week.
  • Here we look at the futures contract for the UK benchmark share index, the FTS100 forecast for today and into the second half of June.

FTSE 100 day trade outlook: Plunge keeps risks lower

A plunge Thursday through many supports as low as 6000, down to 5966, to reinforce Wednesday’s selloff before and after the FOMC decision (to close the bull gap at 6248-39) to signal a more significant top and more negative theme, to aim lower Friday.

  • We see a downside bias for 6005/6000 and 5966; a break here aims for 5926, a key level at 5885 and maybe 5844.5.
  • But above 6115/6120 opens risk up to 6170.5 and 6215, possibly 6244.5.

FTSE 100 intermediate-term outlook

The early June rally to close the runaway bear gap from early March at 6282-6397 signalled an intermediate-term shift to a broader range seen as 6871.5 to 5651.

  • Upside risks: Above 6871.5 sets an intermediate-term bull trend to target 7000, 7439.5 and maybe 7629.5
  • Downside risks: Below 5651 sets an intermediate-term bear trend to target 4733, 4701.5 and 4500.

Daily FTSE 100 Chart

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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