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UK 100 Index Focus – 7 Oct

Major Support & Resistance (pivot points – explained):

Pivot Point: 6458; Support 1, 2 & 3: 6437, 6403, 6381; Resistance 1, 2 & 3: 6493, 6514, 6549

The UK index remains under pressure (called -20pts, currently-50pts) , with resistance at 6475, derived from a combination of both recent and falling highs serving as a hurdle.

We’re still waiting for either one side to back down in Washington or for the two to reach a an agreement. Nonetheless, with markets at depressed 5-week lows but still in a long-term uptrend, as we pointed out on Friday’s weekly roundup, there may be some positives.

  1. A budget solution (which will come, eventually, extreme patience required) would surely result in at least a brief relief rally, with uncertainty removed.
  2. With markets so addicted to easy money policy, surely this must push tapering of QE3 well into 2014 (an absence and loss of official October macro data appears key) which should be good for risk appetite.
  3. House Speaker Boehner is being very stubborn (more so even than some of his Republican colleagues) but he has said he won’t let the US hit its debt ceiling. 
  4. Ratings agency Moody’s  has said says US default extremely unlikely with debt payments being made even after the deadline.

That’s not to say there aren’t risks. We don’t know how long this will go on for. There will be an impact on Q4 GDP. A breach of the debt ceiling may change views on US debt, the sovereign paper of reference

Now looking for a break above 6480 to get us back above the falling highs trendline since 19 Sept. A move above 6500 would be even better still (round numbers), allowing possible retrace to 6600/6665 Sept highs. Beware any break of 6380 which would open up downside to 6350 mid-Aug lows.

A major US announcement likely needed before break-up or down. Washington? hello! We’re waiting, still.

Solid Green line
Possible support

Solid Red line
Possible resistance

  • Trend: Uptrend
  • Potential support: 6385, 6350, 6250, 6000
  • Potential resistance: 6460, 6485, 6500, 6600, 6665, 6715, 6875

Important: The information provided above does not constitute advice or opinion and must only be regarded as technical observations.

Click here for help with Support & Resistance Click here for help with technicals

Solid Green line
Possible support

Solid Red line
Possible resistance

  • Trend: Uptrend
  • Potential support: 6385, 6350
  • Potential resistance: 6470, 6485, 6500, 6600

Important: The information provided above does not constitute advice or opinion and must only be regarded as technical observations.

Click here for help with Support & Resistance Click here for help with technicals

Solid Green line
Possible support

Solid Red line
Possible resistance

  • Trend: Sideways
  • Potential support: 6382
  • Potential resistance: 6460, 6470, 6485, 6600

Important: The information provided above does not constitute advice or opinion and must only be regarded as technical observations.

Click here for help with Support & Resistance Click here for help with technicals

Solid Green line
Possible support

Solid Red line
Possible resistance

  • Trend: Sideways
  • Potential support: 6382
  • Potential resistance: 6430, 6480, 6485

Important: The information provided above does not constitute advice or opinion and must only be regarded as technical observations.

Click here for help with Support & Resistance Click here for help with technicals

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