6215 resistance weak UK manufacturing data US dollar dips 6140 support

Support 6177 6161 6140 6138 6136 6133
Resistance 6190 6216 6225 6245 6247
Good morning. That was quite the sell off from the 6280 level at the bell yesterday, put down to weaker than expected UK manufacturing data (though suspiciously the selling started an hour before the news came out…), but mainly because we saw the US dollar plunging to a 16-month low, hindering Japan and the Eurozone chances of breaking out of a debt-deflation trap. Unfortunately it meant the resistance levels (and short orders) didn’t get hit at 6303 or 6330. The dollar index fell below 92 for the fist time since January 2015, which saw gold hit $1300 again and indices fall. Looking at the Fed and rate rises, markets have now largely discounted a rate rise in June, and are pricing in just a 68pc likelihood of any increases this year. Fortunately the bottom of the 10 day Raff halted the fall at 6160, but it was a lack lustre bounce from that support, which makes 6430 look like the high that will hold for a while now.

US & Asia Overnight from Bloomberg
Asian stocks fell for a sixth day, their longest losing streak since February, as anxiety over the health of the global economy unnerved investors. South Korea’s won dropped by the most in four months, crude oil traded below $44 a barrel and sovereign bonds rallied.
Australia’s benchmark was set for its biggest loss in a month as BHP Billiton Ltd. plunged by the most since 2008. Indonesia’s sank to a two-month low after data showed its gross domestic product grew less than economists forecast. U.S. crude was little changed, after tumbling by about 5 percent in the last two days. A gauge of dollar strength rose, extending Tuesday’s bounce from the weakest level in almost a year, after Federal Reserve officials flagged the possibility of an interest-rate hike in June. Australian government debt advanced following gains in U.S. Treasuries.

Global stocks’ rebound from a three-year low in February suffered a setback over the past two weeks as economic reports and corporate earnings underwhelmed investors. Citigroup Inc.’s Economic Surprise Index for the U.S. has fallen to its weakest level since February and analysts are predicting an 8 percent decline in quarterly profits for S&P 500 companies. U.K. manufacturing unexpectedly shrank for the first time in three years in April, while China’s weakened, reports indicated on Tuesday.

“In a now familiar theme, traders are becoming concerned about the possibility that the next volatile market swing, in this case downward, may not be too far away,” said Ric Spooner, chief market analyst in Sydney at CMC Markets. “Both U.S. stock market valuations and commodity prices have risen to levels that could be difficult to sustain against the ongoing reality of sluggish global demand growth.”

Gauges of last month’s services output are due Tuesday for the U.S., the euro area, the U.K. and India. The U.S. also has reports on employment and durable goods orders, while Tesla Motors Inc. and Time Warner Inc. are among American companies that will release earnings. In Europe, Siemens AG and Societe Generale SA reported profits that beat analysts’ estimates, while Anheuser-Busch InBev NV fell short.

Stocks
The MSCI Asia Pacific excluding Japan Index dropped 1.3 percent as of 1:10 p.m. Hong Kong time, its biggest loss in a month. Benchmarks in Hong Kong, Singapore, Sydney and Taipei fell by more than 1 percent.

In Australia, BHP Billiton tumbled as much as 10 percent — its biggest intraday loss since 2008 — after it was named in a $44 billion law suit over a dam rupture in Brazil that caused deaths and severe environmental damage. Woolworths Ltd., the nation’s largest supermarket chain, sank as much as 7 percent after S&P Global Ratings downgraded the company’s credit rating.

The Jakarta Composite Index fell 0.9 percent. Indonesia, Southeast Asia’s largest economy, reported GDP growth of 4.9 percent for the first quarter, less than the 5.1 percent forecast by economists in a Bloomberg survey.

Futures on the S&P 500 declined 0.2 percent, as did contracts on the U.K.’s FTSE 100 Index.

“The continued narrative is that the global economy is not very strong, even if the U.S. is the best of the bunch,” said Joe Bell, a Cincinnati-based senior equity analyst at Schaeffer’s Investment Research Inc. “We’ve had such a strong run-up over the last few months that we’re in a bit of a consolidation phase.”

Currencies
The Bloomberg Dollar Spot Index, which tracks the greenback against 10 major peers, rose 0.2 percent after gaining 0.7 percent in the last session. Atlanta Fed President Dennis Lockhart said Tuesday that the Federal Open Market Committee could move on rates in June if warranted, though he is not leaning in either direction at this point. San Francisco Fed President John Williams says that he would support a rate hike next month provided the U.S. economy stayed on track.

The Japanese yen fell 0.6 percent to 107.21 per dollar. Finance Minister Taro Aso said Tuesday, when the currency reached an 18-month high of 105.55, that the government is monitoring speculative foreign-exchange trades and will respond if needed. The yen has strengthened more than twice as much as any other major currency in the past week as the Bank of Japan unexpectedly refrained from adding to stimulus at a policy review.

The won weakened 1.3 percent before the Bank of Korea releases the minutes of its last policy meeting. Malaysia’s ringgit slumped as much as 1.5 percent to its weakest level since March, weighed down by the drop in crude prices. Malaysia is Asia’s only major net oil exporter.

“The market is grasping the view that the dollar probably fell a little too much, and a rebound could be ahead, and this seems to have deteriorated sentiment towards emerging-market assets including the won,” said Jeon Seung Ji, a currency analyst in Seoul at Samsung Futures Inc.

Commodities
Crude oil was little changed at $43.71 a barrel. U.S. inventories increased by 1.3 million barrels last week, the American Petroleum Institute was said to report Tuesday. Government data Wednesday is forecast to show supplies rose by 750,000 barrels.

Gold fell as much as 0.6 percent to $1,278.99 an ounce, reflecting the dollar’s rebound. The metal reached $1,303.82 on Monday, the highest intraday level since January 2015.

Nickel, zinc and lead all dropped more than 0.8 percent in London, while copper fell 0.4 percent.

Bonds
The yield on Australia’s 10-year government bonds fell five basis points to a three-week low of 2.42 percent, after the rate on similar-maturity U.S. Treasuries slid eight basis points on Tuesday to 1.80 percent.

The cost of insuring corporate and sovereign bonds in the Asia-Pacific region rose to about the highest level in three weeks, according to Societe Generale SA prices for the Markit iTraxx Asia index of credit-default swaps. [Bloomberg]

FTSE 100 Outlook and Prediction

FTSE 100 Prediction
FTSE 100 Prediction

We have a major PRT support level to start off with today right where we are as I write this at 6185, as such we might manage to pop a little bit higher of the bulls can build a bit on that bounce from the 10 day Raff channel yesterday. We also have the 20 day Bianca at 6177 for some initial support. Generally indices feel weak at the moment, having shed over 200 points from that most recent 6430 high. A rise to the pivot at 6215 would play out well and set up a decent level to short from for a dip down to S1 and a couple of other supports at 6140 (10 day Bianca and S1). The live charts pivot is 6205 though so also watch this level today, incase it fails to reach the 6215. The 2 hour chart has now also gone bearish with resistance at 6225, and above this the top of the 10 day Bianca is 6280. Still feels like shorting the rallies is the best plan today for a test of the 6140 level so have set a short order for 6215 off the pivot, but would also look to short around the 6250 level depending on how its looking at the time. We may well get a retest of yesterdays lows today.

145 Comments

  1. Hello again.
    Main question this morning seems to be which way the DAX will break, 960?

    1. *should read over 960 or under 900.*

      Nick, I used chevrons in the original post and it cut them out. Maybe the source of website problems is something to do with that and html?

  2. Morning all,
    Tmfp,was just saying over the page that I think that rotation idea is an explanation for what could keep things Bullish.

    1. I shall have a look.

      What, you mean that the funny money is going into trad stocks which are big components in the indexes we trade?
      Are Apl and Alphabet trad or tech these days?
      With the ftse, what about the energy and commodities weighting? I think commodities could collapse, its just a Chinese spec bubble imo, like oil.
      Just like the ftse appears to be doing soon. That last fail on the DAX at 960 appears to have knocked the stuffing out of the bulls.
      I know I get rabid, but 850 and 140 look quite possible this morning, more so than 10k and 200.

      1. Volume of money needing a return keeps it up yes.Trad stuff replaces tech as the leader.It is a joke that the biigest Co’s on Earth essentially live off the consumer and his disposable income.Dax is still around a 50% retrace on the most recent rally and Ftse above 200sma and at yesterdays low at the moment,all looks negative but it did at the start of April too,Dax isnt down as far as it was then yet and its had a few more down days..

        1. Have things changed much? Trade has always been the source of great wealth. Industry was only an extension of trading in so far as it created stuff to trade.
          Store of wealth is a paper money concept. Wealth was what was stored, not what was created by its storage.

          1. The most worlds most successful retailers shouldnt be the ones producing non essentials for only a percentage of the planets population is all I meant,money has to go somewhere where it gets a return,fund managers need to justify allocation activity and have to be active to keep their aum.
            For Tech to remain dominant QE and easy money would have to work wouldnt it ? The guys actually working and putting rocks in baskets etc arent big tech customers is sort of what I was thinking.

          2. I agree wholeheartedly, but the guy putting rocks in the basket has no disposable income.
            Good phrase that, disposable being operative.

    2. WSF just a thought though….wouldn’t you think that if it’s a rotation in the Ftse constituants….that the selling of one sector would balance to some extent the buying of another …..what am I missing here?

  3. Got out of my remaining long at 68, hope this isn’t going to fizzle out sideways. DAX breaking out is the key.
    And of course the DOW 😉

    1. <:0) ok ok it's just a theory……….people didn't think an aeroplane could fly either years ago….. :0)

      1. Whatever floats your boat anstel, or flies your plane. 🙂
        Have a read of “underlying instrument” and “displacement activity” definitions when you get a mo.

  4. I’m finding a few problems as well Nick getting the site to load….it’s intermitant.

  5. Morning all, feel strangely bullish this morning, probably because the sun is shining. With no real analysis involved, I’ve gone long first thing at 58 and will add if it falls. Good luck all.

      1. Senu……I can feel your fear from here……..have a look at some Rande howell videos..might help……that and emotions = contracts in the market x account balance….hope it helps you.

  9. If we melt to 830/140ish might be worth a bounce long, I do think there’s a possibility of some stop selling
    This bounce from 0940 will be a good measure of any strength, needs to break 900 and 60 and hold

      1. Been in and out as usual Senu, favouring the long side slightly but not impressed.
        Certainly not interested around 50/890 nomansland for me, would long a further liquidation dip for a bounce but currently short.
        Look at the chart, longing is turning into a pick the bottom exercise, with previous lows/support gone. Sit on hands and miss it, rather than buy because it looks cheap and be -20 in five minutes.

        1. Miners still ticking lower – little by little. Just looking at the BLT daily chart – 812p at the moment 726p swinf low (early April). As a sector, it’s not going to do the FTSE any good.
          Thinking sitting on your hands best option – boring but …

  10. Hello everybody

    Very curious to know – the average number of trades entries you do
    every day. I understand it varies, but a range would be informative.

    thanks
    Jsft

        1. Traded all off PRT charts.
          The week 11th April – 15th April was the not so good week.
          5 Short positions at various.
          It is discouraging when you’re looking at red ink but at the same time I was looking at plenty of black ink on portfolio – so it’s a trade off.
          I rolled them all up into one “Short June Fut” to get them off my screen and get on with some others.
          http://imgur.com/pdQ5859

  12. Getting rabid here…must resist, already quite short, but this isn’t consolidation, this is the hero hanging onto a branch, dangling over the edge of a cliff and seeing that it’s slowly snapping…

      1. I’ve got 6125 as Average range base – so fingers crossed.
        Jezzy – that RSI 1.97 !

    2. Have a look at the day chart it could fall 400 points and still be in an uptrend there,S2 is 9825 S3,9732 fwiw.

      2. Unless it’s the end of the world there will be people looking too buy as it sells off ….think in probabilitys and what you have seen before.

        1. Hope it’s not the end of the world…”it’s quite a nice sunny day….shame to waste it.

  17. Very tempted for another short with close trailing stop, sorry you longs, but it’s f**ked short term

  18. Yep, tmfp, it is a little broken! Went a bit early I think. It may be stupid But I’ve added at 05.

    1. Yes Dow opening down here could drop a fair bit further too,cynicism tells me ADP Unemployment at 13.15 will be a push up excuse.Mind you Cruz out of the race means you could print a heavy down day in the Dow as a response to Trump as the likely nominee on the evening news.Guess it is see if they run it up later to make another day chart with a tail again and back to Hill St Blues as the key
      https://www.youtube.com/watch?v=Jmg86CRBBtw

  19. By the way, chopped the FTSE/DAX gamble yesterday, cost me a big night out! Bugger!

      1. The diffs are properly volatile but a bit of fun. Funnily enough, having that punt on Friday was a double whammy, cost me a big night and I had a big night too!

  20. Well, trying to muster a bit of support around what IG see as crucial 07 and what fib says at 9840/60.
    Looks horrible but a small long at 08 stop 92.

    2. No, out, heart’s not in it, maybe still one more leg in it downside, then think about longing a big red one.

      1. It’s not too Bad……step back and have a rest….it just my view but we can’t control this lot and it’s getting more unpredictable All we can control is execution…..check out Rande Howell on YT….I think the holy grail is not external its within us….I’m still trying to figure it out but that’s what I think.very best of luck….

      2. Wasn’t a disaster then Senu. Do yourself a favour, think about the stop thing. The problem with moving/removing them is there’s no Plan B.

      1. The moment seems to have gone and times running out a bit, but still fancy a last dip, no technical justification, but 9820 and briefly -6100.

        1. lost patience and the DAX’s attempted rally might drag us up a bit so finally out for +5

      1. Dont know if he got anything for it,but I bet the website he sent it to made a bit from syndicating that photo.

          1. Well tmfp if that little alien bloke that WSF brought to our attention above hasn’t got any plans for world domination just yet I thought I might hold it a while …..helps with the natural rhythm you know :0)

          2. I was thinking meditating in the woods with a phone might be a quick way to make some money 🙂

          4. Well I suppose if it goes under 6000 I’ll have to start sulking and admit defeat…..let’s stay positive for a little bit……it’s a lovely day:0)

    2. Depends on your view of the DOW’s reaction really. They should open around my long awaited 650 level, quite where they go from there is another matter..

      1. I remember couple of weeks back when I asked @6400 if we would be seeing 6200 anytime soon and you said if it goes back to it then the rally would not be make any sense..! so my question is if it is still uptrend? I know its a millions dollar question ? Will pay if u get it right …lol:)

        1. I think that after all the effort in March to get through 6200 that the action since then, including this deep retrace into supposed support, hasn’t been very encouraging from a bull perspective.
          It depends on the time frame you’re trading, but BTD is looking a bit expensive short term.
          It could all be a bear trap on our way to the moon. Maybe.

  27. U.S only 27 points above their overnight low and 40 mins from their open,about a 100 point gap on their close I think it might go lower before it goes higher now,50 sma doesnt seem to be where it will turn 600/550 ?

    1. Nothing’s looking particularly good apart from the FTSE, holding up well.
      I’d like to think the DOW will open weak because I’m short ftse (prob for not much longer) but it’s a real coin toss.

  28. Well, after lecturing about stop losses, I’m prepared to take a hit on that bad entry short but want a little punt on a weak DOW open, so extending the stop to 28 as a separate trade.

    1. and out, highly irritated with the original entry, jacking it in for today and off for a fast bit of motorbike therapy.
      GL chaps.

  29. Was halfway through writing “here we are again at 6100….” then had to go out, so no pearls of wisdom on that from me now. Dow opening in the ’50s, could go either way as they love a big figure.
    For me I’m long, average at 6133, early entry this morning, better later! I think it has had a 300odd point re-trace to where lots of us thought it was right to be short last time so I’ve decided it is right to be long. If it gets down to 5800 I’ll be fully loaded but I’m not really sure anyone is that convinced about getting it below 6100 again. We’ll see!

    1. Dow closed about 50% of it’s opening gap,not sure if you are still interested in the gap trades though.

      1. Hi WSF – I’ll try anything when I’ve got the time…! 🙂
        Off to do a bit as deadlines looming ..;

        1. If you and Tmfp worked for Sainsburys we might have avoided that dip from 7am 🙂
          Dow needs +750 to go positive.

          1. Yeah and if custard worked at sainsburys we could get chicken dippers at mates rates :0)

  35. Hey WSF on the hourly Dow that candles shoulder …….I’ll call it a shoulder cause I don’t know what to call it. Well it’s just beneath the 20 sma….next target 40 sma at 767…… Does that look about right to you?…….it’s just dropped back abit as I typed.

    1. Yes its gone a bit no mans land now,yesterdays close was 750 and it turned down around 800 after the Rally last night,750 to the 770’s would be nice to get through,looks better on the 15 min than the 60 at the moment,15 shows we have pulled back through about half of that rise from 14.45,we are stuck inside their opening range really,that opening gap from the Dow overnight.

      1. Oh thanks WSF so if we get above 765-770 that’s a step in the right direction………well for the longs that is……Do you have a lot of screens? Or do you just change timeframes on one screen? Thanks…..

        1. Yes interesting, on the 15 min that last candle has bounced up off the 20 sma……I dont know for sure but it does look more positive on the 15 min at the moment.

        2. Mostly using Charts on different tabs.On Advantage Web you can create your own workspace and then save that layout,on that about 5 things in a Watchlist and 4 open charts seems to work ok even when it is busy,thats with trading from the Charts switched off,so 3 timeframes and another mkt work ok.
          Got two screens at the moment,mostly using one for other stuff today though.Dow seems to want to retrace all of that climb now 🙁

          1. That’s a really good idea WSF…I never thought of using different tabs….I’ve just got 3 charts open on advantage and I change the timeframes…..if I need to have a close look at one I just maximise it……thanks …

          2. I had a look at an IG demo account the other day…..there’s alot on their platform….it would take a bit to learn it all…..going to stick with what I have for now….advantage seems to have enough on it for my knowledge level at the moment…..

      1. OK Anstel, Yes I know – I haven’t been around for a bit – found it was having all having lots of ” voices in my head ” LoL …& I always seem to post the same thing ! “RSI T” comes to mind 🙂 – boring after a while & which I hope everyone has set up as an alert..
        Also, I really wanted to get grips with trading off the charts on PRT which I really like (trading off the charts – you simply put your orders in on the chart , once actioned then Limits and Stops (although I don’t seem to have done alot of those(Stops)).

        1. There’s so much to this trading hugh…..I’m not very good at charts….picking up bits and pieces and slowly building a very basic knowledge of tech stuff……emphasis on the word basic……im spending a lot of time on the psychological side….I feel it might hold the key to some improvements…still trying…still making mistakes…Good Luck Hugh :0)

          1. Still waiting for this to be filled <6105 maybe
            Order set to Go L Close <10 RSI 6 – 1 Min

    1. It’s not having it….thought it might breakout few minutes back but nope……looks like it a waiting game again……

          2. It wouldnt take much to close over the open,doesnt seem to be much enthusiasm for buying or selling though.

          3. Hey WSF….just wondered………do you ever think your spending too much time on this trading endeavour …..it’s starting to cross my mind…..strikes me you have to put the trading time in to learn all the things not to do……but still I don’t know its a lot of hours were putting in……..

          4. Be nice if Dow jumped to 18100 and Ftse to 6500 and Dax to 11000…….. Could go to a nice country pub then and have a beer……oh well :0(

          5. Yes,far too much time,just dont really see I’ve got a choice at the moment,so try not to look at it like that.I notice when I’m making the same mistakes,but not when I dont so its always the negative stuff that stands out.What Jack said is true,better to have an income you can live from regardless of mkts and other stuff in your life instead of the idea that you will get that later.On the other hand there are always worse things to spend time doing too and this can go right as quickly thanks to the Leverage.

          6. Therwe goes my stop about time too,would have been a lot of stops there,so might turn now.Think we need an excuse though,something new on CNBC or whatever.

          7. I don’t really want to get back into my conventional business so I kind of feel the same way as you…..stick at it ……but it’s the hardest thing if ever tried to do…..and I know the problem is me….it’s nowhere else…..being able to control the emotional side while at the same time keeping the reasoning rational side intact seems really difficult …..can’t believe how hard it is…….

          8. It just drains you too,easy to forget the time factor,the idea that good trades work out to good results over a period of time and in the short term you can lose money without doing anything wrong gets all mixed up with judging trades by results and thinking every loss is a mistake you shouldnt repeat.In Jan I thought I could hit my targets ahead of schedule and get a break this year,not thinking that right now,but nothing has changed,just looking at clues on whether the 800’s or 500’s are next and it will happen soon enough anyway and whilst it’s happening there will be lots of new trades,just need to have the energy to exploit them,so yeah mood and psychology.

          9. Yeah I dropped a hell of a b*llock two weeks back in hindsight…it’s how far do you run trades before they turn…….if you get out after 10 they go stellar on you and if you hold they reverse on you… That’s just how it seems I would imagine.I suppose 4pts scalping at £5 pp =£20 if you can do that 20 times a day it would work out well ……. I have had some good swing trades in the past but I don’t seem to be able to put one all together successfully at the moment…….And yes its so exhausting…..I remember shutting a big trade down some time back….the pressure was immense. As soon as I closed it I started shaking and got quite emotional as the pressure came off….I thought gee wiz this could make you Poorly….oh well let’s see what’s going on now……

  39. Well WSF I closed that long from 14 at 20.6 for +6.6……thought it would have yielded more but still.

  40. Well I guess that will be close to a Doji on the cash chart,be interesting too see how low the Volume was .
    Going to watch Danny Devito and Schwarzenegger in Twins,have a good evening.

  41. Morning all……it’s 6.30am its drifted up slightly overnight…Dow 701…Ftse 133…..Dax 861….

    2. Morning guys,thanks for that vid Anstel.They should do Supermarket Sweep in Cars.
      Watch out for Cips/PMi at 09.30 if its bad it will cause the BOE to cut growth forecasts next week apparently.Expectations are 53.6 down from 53.7,cant remember if we are in bad is good or good is bad at the moment 🙂

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