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Market Oracle FREE Newsletter

Traders Workshop

FTSE 100 Stocks Index Forecast 2011

Stock-Markets / Stock Markets 2011 Apr 19, 2011 - 01:45 AM GMT

By: Nadeem_Walayat

Stock-Markets

Best Financial Markets Analysis ArticleThe following text is excerpted form the NEW The Stocks Stealth Bull Market Update 2011 70 page ebook is available for FREE Download. Whilst the US economy is expected to outperform the UK across most key measures for the whole of 2011 and probably several more years beyond, which on face value implies lack of performance for the FTSE. However the FTSE is not exactly an index that tracks the prospects for the British economy as over the years the FTSE has incorporated waves of foreign companies listed on the London Stock Exchange that have very little if any activity in the UK such as the big central asian, african and australian mining companies, much more so than any other leading country index such as the Dow, Dax or CAC.


This is further enhanced by the fact that most of the remaining UK based FTSE companies are multi-nationals, deriving a large part if not most of their revenues and profits from over seas activities which includes the likes of British Petroleum which is not really British when you consider that most of its trading activities take place over seas from the highly profitable and not so profitable (Gulf of Mexico). The net effect is that only an estimated 25% of FTSE 100 index companies earnings are derived from the domestic economy, which is why the FTSE is more sensitive to the exchange rate than other indices and also can be expected to track the Dow Jones 30 index more closely than other country indices which therefore means an in-depth analysis is not necessary, as the overall trend patterns should not be too dissimilar to that of the Dow. The only allowance to be made is in terms of the impact of currency trends between Dollar and British Pound which earlier analysis forecasts for a 17% appreciation against the dollar which therefore implies relative trend weakness against the dollar priced Dow Index.

Technical Analysis

  • The FTSE is expected to continue to show under performance against the Dow both as a consequence of a stronger currency and weaker economy. This weaker trend is clearly manifesting itself by example of the FTSE falling well below the April 2010 high during mid month, which compares against the Dow that bottomed some 400 points above the April 2010 high.
  • Key resistance lies at 6,100 which is expected to both act as current resistance and future support as well as the 6000 area around which the FTSE can be expected to gravitate.
  • The Trend channels suggest an end 2011 range of between 6,400 to 6,800 - or a gain of between 8% and 15% on the last close of 5,908, actual performance can be expected to be nearer to 6,400 than 6,800.
  • Long-term support and resistance comes in at 6,400 and then 6,750, which is supportive of the trading range analysis.

FTSE Forecast Trend Conclusion

The FTSE is expected to follow the Dow trend after spending substantial time during the year gravitating around the 6,000 level. The FTSE targets a trend towards an end year range of between 6,750 and 6,400 with the most probable year end high in the region of 6,500, thus a gain of 10% on the last close.  Immediate price action targets FTSE 6000 as we move into early April, then a correction that targets 5,800 as we move into early May, i.e. in line with the trend expectations for the Dow.

The NEW The Stocks Stealth Bull Market Update 2011 ebook follows on from the 3rd of April 2011 publication of key analysis and concluding trend forecast for the DJIA stock index for 2011 (Stocks Stealth Bull Market Trend Forecast 2011), that includes the full detailed analysis and additional trend forecasts for the following major world stock market indices : UK FTSE100, China SSEC, India BSE and Russia RTSI.

Download Now-The Stocks Stealth Bull Market Update 2011 Ebook (PDF 2.8meg), the only requirement is a valid email address.

                         CONTENTS

   
  Introduction
1
   
     Why a Stocks Stealth Bull Market?
2
     2009 - Birth of the Stocks Stealth Bull Market
2
     2010 - Bull Market Consolidates and Targets 12,000
9
     Bear Market Rally Mantra Repeatedly Busted
13
     The Head and Shoulders Propaganda Pattern
14
     Hindenberg Crash Omen Proved to be the Summers      Best Contrary Indicator!
15
     Economy & Inflation Conclusions Applied to the      Stock Market
16
     Stock Market Mega-Inflationary Trend
18
     Rising Interest Rates Implications for the Stock      Market
19
     Black Swan Events - Japanese Tsunami and Nuclear      Meltdown
26
     Crude Oil Price Impact on Stock Market Trends
30
     The Copper Price and the Stock Market Trend
32
     Stock Market Manipulation
33
     Current Stock Market Sentiment & Psychology
34
     Quantitative Easing AKA Money Printing
35
     U.S. Dollar and Stock Market Trend Relationship,      Currency and Real Wars
37
     Stocks Stealth Bull Market Elliott Wave Analysis
40
     Stock Market Technical Analysis
44
     Formulating a Stock Market Conclusion for 2011
47
     STOCK MARKET FORECAST 2011 FINAL      CONCLUSION
49
     Risks to the Forecast
50
     The SHOCK MARKET BUBBLE
50
     The Stocks Stealth Bull Market Mega-trend 50
     FTSE 100 Stocks Index Forecast 2011 51
     Emerging Markets Outlook 2011 52
     CHINA 54
     INDIA 57
     RUSSIA 59

Recap of Stock Market Trend Forecast for 2010 - 02 Feb 2010 - Stocks Stealth Bull Market Trend Forecast For 2010

Dow 10,067 - Stocks Multi-year Bull Market that bottomed in March 2009 will trend Sideways during first half of 2010 attempting to break higher. The second half will see a strong rally to above 12,000 targeting 12,500 during late 2010.

DOW Stock Market Forecast 2010

Source and Comments: http://www.marketoracle.co.uk/Article27634.html

By Nadeem Walayat

http://www.marketoracle.co.uk

Copyright © 2005-2011 Marketoracle.co.uk (Market Oracle Ltd). All rights reserved.

Nadeem Walayat has over 25 years experience of trading derivatives, portfolio management and analysing the financial markets, including one of few who both anticipated and Beat the 1987 Crash. Nadeem's forward looking analysis focuses on UK inflation, economy, interest rates and housing market. He is the author of three ebook's - The Inflation Mega-Trend; The Interest Rate Mega-Trend and The Stocks Stealth Bull Market Update 2011 that can be downloaded for Free.

Stocks Stealth Bull Market Ebook DownloadThe Interest Rate Mega-Trend Ebook DownloadThe Inflation Mega-Trend Ebook Download

Nadeem is the Editor of The Market Oracle, a FREE Daily Financial Markets Analysis & Forecasting online publication that presents in-depth analysis from over 600 experienced analysts on a range of views of the probable direction of the financial markets, thus enabling our readers to arrive at an informed opinion on future market direction. http://www.marketoracle.co.uk

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any trading losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors before engaging in any trading activities.

Nadeem Walayat Archive

© 2005-2017 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Comments

Tarek
12 May 11, 11:33
FTSE & £?

Nadeem,

I am a great admirer of your articles and I read them enthusiastically whenever they come out. I wanted to ask: can you explain the fundamental relationship between the FTSE and the £, are they correlated I.e. Are in-sync with each other? If so, why?

As I understand it, buying ftse (in £s) is like shorting £ because if you buy ftse for say £2 and the GBP devalues, the value of the contract you own is now greater e.g. £3. If this is true then the ftse and the £ are inversely related.

However, from what I understand in your stock stealth PDF is that FTSE is bullish and USD is bearish, so doesn't that mean £ is bullish, hence FTSE and £ are correlated.

Would really appreciate your help in understanding the fundamentals of this relationship.

Many thanks

Tarek



12 May 11, 14:45

Hello Nadeem,

How do you thinks stocks will react to a possible Greek restructure? I mean European stocks and international stocks.

Thanks for sharing your view

Alejandro


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