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UK FTSE 100 (.FTSE) opens flat today over mounting fears that the global shutdown to combat the coronavirus pandemic could last for months

UK FTSE 100 (.FTSE) opens flat today over mounting fears that the global shutdown to combat the coronavirus pandemic could last for months

The FTSE 100 opened flat today over mounting fears that the global shutdown to combat the coronavirus pandemic could last for months.

The index of Britain’s leading companies started the day in London at 5,510 where it finished last Friday, following a rise of 6 per cent overall last week.

It comes after Asian shares fell overnight and oil prices dipped again amid fears the crisis will cause major harm to economies despite the efforts of central banks.

JPMorgan economist Bruce Kasman said it continued to mark down GDP forecasts ‘as our assessment of both the global pandemic’s reach and the damage related to necessary containment policies has increased.’

They now predict global GDP could contract at a 10.5 per cent annualised rate in the first half of the year.

Overnight, Japan’s Nikkei dropped 2.7 per cent, while MSCI’s broadest index of Asia-Pacific shares outside Japan lost 0.7 per cent, though that was up from early lows.

Central banks have mounted an all-out effort to bolster activity with rate cuts and massive asset-buying campaigns, which have at least eased liquidity strains in markets.

Rodrigo Catril, a senior FX strategist at NAB, said the main question for markets was whether all the stimulus would be enough to help the global economy withstand the shock.

‘To answer this question, one needs to know the magnitude of the containment measures and for how long they will be implemented,’ he added.

‘This is the big unknown and it suggests markets are likely to remain volatile until this uncertainty is resolved.’

It was therefore not encouraging that UK authorities have now warned lockdown measures could last at least six months.

The Deputy Chief Medical officer Dr Jenny Harries warned yesterday that Britons should not expect to get back to ‘normal life’ for six months or even longer. 

She said it will not be clear whether the ‘social distancing’ lockdown is working for another two or three weeks – after Easter – with deaths set to rise further. 

US President Donald Trump yesterday extended guidelines for social restrictions to April 30, despite earlier talking about reopening the economy for Easter.

Japan today expanded its entry ban to include citizens travelling from the United States, China, South Korea and most of Europe.

Technical Indicators

Overall, the bias in prices is: Downwards.

Note: this chart shows extraordinary price action to the downside.

By the way, prices are vulnerable to a correction towards 6,306.34.

The projected upper bound is: 5,917.89.

The projected lower bound is: 4,877.16.

The projected closing price is: 5,397.53.

Candlesticks

A black body occurred (because prices closed lower than they opened).
During the past 10 bars, there have been 6 white candles and 4 black candles for a net of 2 white candles. During the past 50 bars, there have been 22 white candles and 28 black candles for a net of 6 black candles.

Momentum Indicators

Momentum is a general term used to describe the speed at which prices move over a given time period. Generally, changes in momentum tend to lead to changes in prices. This expert shows the current values of four popular momentum indicators.

Stochastic Oscillator

One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 73.9468. This is not an overbought or oversold reading. The last signal was a sell 0 period(s) ago.

Relative Strength Index (RSI)

The RSI shows overbought (above 70) and oversold (below 30) areas. The current value of the RSI is 38.90. This is not a topping or bottoming area. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a buy 4 period(s) ago.

Commodity Channel Index (CCI)

The CCI shows overbought (above 100) and oversold (below -100) areas. The current value of the CCI is 27. This is not a topping or bottoming area. The last signal was a buy 7 period(s) ago.

MACD

The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a buy 3 period(s) ago.

Rex Takasugi – TD Profile

FTSE 100 INDEX closed down -68.610 at 5,441.720. Volume was 96% below average (consolidating) and Bollinger Bands were 176% wider than normal.

Open     High      Low     Close     Volume___
5,510.3305,522.6405,441.7205,441.720 37,852,888
Technical Outlook 
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bearish
Moving Averages: 10-period     50-period     200-period
Close: 5,361.38 6,682.34 7,197.47
Volatility: 78 57 32
Volume: 1,642,476,160 1,137,917,056 821,853,504

Short-term traders should pay closer attention to buy/sell arrows while intermediate/long-term traders should place greater emphasis on the Bullish or Bearish trend reflected in the lower ribbon.

Summary

FTSE 100 INDEX is currently 24.4% below its 200-period moving average and is in an downward trend. Volatility is extremely high when compared to the average volatility over the last 10 periods. There is a good possibility that volatility will decrease and prices will stabilize in the near term. Our volume indicators reflect volume flowing into and out of .FTSE at a relatively equal pace (neutral). Our trend forecasting oscillators are currently bearish on .FTSE and have had this outlook for the last 44 periods.

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