FTSE 100 was little changed in the futures market after the disastrous performance yesterday. The index lost more than 3.8% as investors worried about the economy and the frozen bank dividends. Indeed, bank stocks like Lloyds, Barclays, and HSBC were the most active, with each losing more than 9%.
The United Kingdom is in a vulnerable place. The country must hammer a trade deal with the European Union before the year ends. At the same time, it is impossible to imagine how this will happen, with travel being curtailed. Also, Boris Johnson and Michel Barnier, two key figures in the talks have been diagnosed with Coronavirus.
In addition to Brexit, the challenge presented by Coronavirus. This challenge has led to many companies facing existential challenges. Just this week, prominent retailer BrightHouse went under and more others are expected to follow. While the government has suggested a rescue package, there is evidence that it will not be enough.
Many industries are in crisis. For example, the automobile industry, which employ thousands of people is in danger of being wiped out. The restaurant industry, which is dominated by family-owned businesses too is at risk. The same is true with the housing sector, which was recently halted.
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Looking at the 2-hour FTSE 100 chart, we see that the index has found some resistance at the 38.2% Fibonacci Retracement level. We also see that this is happening at a time when the index was in the fourth phase of the Elliot Wave pattern. This was no accident. I expect the index to decline further to complete this pattern. This means that the index will test March low of £4,800.