Support 6870, 6850, 6791, 6756 Resistance 6887, 6918, 6925, 6945, 6990, 7064

Good morning. I think IG read my trade plan yesterday as the short order 6915 missed by 1 point, and the long got stopped out by 1 point, so not ideal for the automated trades. That said it did go to plan with the initial rise towards 6915, a dip down to 6970 and then a further rise – it just needed to be manually done! The bulls failure to break 6915 means that is still the level that they need to break to invalidate the current bearishness – will we get a Bull Tuesday? The S&P was certainly bullish yesterday, breaking through the 2077 resistance and crucially closing above it; further upside this week could well see the EMAs cross back to bull. There is a lot of news about China and how any slowdown there would drag everything down, however, news overnight that they will support economic growth got everything bullish. Today we have the UK GDP at 09:30 and US consumer confidence at 15:00 – both of which will get things moving around those times.

US & Asia Overnight from Bloomberg
(Bloomberg) — Asian stocks rose, with the regional benchmark poised for the best quarter in three years as China moved to support economic growth, sending shares higher in the U.S. and Europe and the yen tumbling against the dollar.

The MSCI Asia Pacific Index added 0.6 percent to 147.35 as of 9:01 a.m. in Tokyo, on course for a 6.9 percent quarterly advance, the most since the first three months of 2012. China’s central bank announced measures aimed at stemming a property slump after Governor Zhou Xiaochuan said at the weekend that policy makers can do more to support Asia’s largest economy. The Shanghai Composite Index surged 17 percent this year through yesterday and Japan’s Topix index added 11 percent.

“Investors continue to work on the expectation that the People’s Bank of China will deliver more policy reports in coming months and that the U.S. Fed will be cautious about its policy deliberations,” said Matthew Sherwood, head of investment markets research in Sydney at Perpetual Ltd., which manages about $21 billion. “U.S. economic data overnight had no clear trend, but European economic sentiment continued a run of improving data.”

The Topix gained 1.2 percent today after the yen slid 0.8 percent against the dollar on Monday. Australia’s S&P/ASX 200 Index also climbed 1.2 percent and New Zealand’s NZX 50 Index added 0.2 percent. South Korea’s Kospi index rose 0.7 percent.

Futures on the FTSE China A50 Index climbed 1.5 percent in the most recent session. Mainland stock gains this year have been fueled by expectations of central-bank policy easing, optimism the government won’t let economic growth fall below this year’s 7 percent target and as authorities reduced curbs on the property market.

Global Economy
Sales of previously owned U.S. homes climbed 3.1 percent in February for a second monthly advance, data from the National Association of Realtors showed. Economists had forecast a 0.3 percent gain.

The Stoxx Europe 600 Index climbed 1.1 percent on Monday. Euro-area economic sentiment rose in March to the highest level in more than 3 1/2 years, European Commission data showed.

E-mini futures on the Standard & Poor’s 500 Index were little changed. The U.S. equities gauge jumped 1.2 percent yesterday, while the Dow Jones Industrial Average posted its biggest gain in almost eight weeks. Fed Chair Janet Yellen said Friday she expects U.S. interest rates to rise this year, with subsequent increases to be gradual. [Ref]

FTSE Outlook

FTSE 100 Prediction
FTSE 100 Prediction

We are just below the daily pivot as I write this, which is 6890 (IG) and 6887 (live charts) so we may well get an initial dip to start the day today – certainly the moving averages not he 10 and 30minute charts are both bearish. If we do dip initially then the first support levels to watch are 6870, with a lower level 6848 – a level that could well see a decent bounce if it got that low. As mentioned above, the bulls need to get the price above 6918 to reverse the weakness and have a push to new highs, so if we move above the pivot then longs to target 6918 are worth doing. Above 6918, we have 6925 and 6945 as resistance, followed by the daily channel kicking in – the top of the 10 day Raff at 6970, and then the 10 day Bianca at 7064. I actually remain fairly bullish for the moment, as the daily EMAs are still bullish, and with the US strength yesterday I think we are still on for a push soon to above 7000. That said, as per usual March has been a bit weak, with the month opening at 6931, and looking to close out slightly below (unless the bulls perform today to close above that).

45 Comments

  4. I’m out for the moment, with a nice 44 points bagged for the morning 🙂

    Chinese stimulus details seem to have disappointed the markets…..nothing really justifying a push at the moment.

    I’ve got two orders placed…..

    back in at 6838 to go short down to 6821
    back in at 6870 to go long up to 6887

    the former is looking most likely at the moment!

  6. interesting chaps… i think i will ponder a little longer i entered at 48 and quickly thought no and closed for +2points haha

      2. i actually love shorts jetbusters but seem to always burn myself badly on them get a bit too excited and go too heavily short 🙂

  9. This site seems full of optimists 🙂 Always looking to go long when possible 🙂

    I’m the opposite….. always looking to go short whenever possible, and will only go long if I’m 99% convinced there is good reason.

    Funny enough, I got into SB on the Indices because I was fed up with my shares….. I’d research companies for hours and hours, convince myself they were a good company to invest in…….spend 6 months watching them grow steadily, then all of a sudden the markets would throw a wobbly (nothing directly to do with my shares!) and I’d see my share price drop 20%……6 months work, knocked out in 10 minutes!

    that’s when I decided, “sod this!”, at got out of shares……. decided I’d make the most of these regular drops, so looked into the indices! 😉

    1. Good plan. Spread betting should be in addition to shares. I do shares in my SIPP and day trade/swing indices

      1. I too found the same thing after doing the research; also tried a few AIMs (waste of time, too much like the wild west). Now I buy FTSE 100 companies when they have a wobble. Am currently in Aviva (330), Barclays (220), Tesco (160). Did well on Rolls when the Qantas plane lost an engine, BP with the Gulf of Mexico explosion, Barc at 50p during the financial crisis, etc etc, some I go in and out quick, others are long term holds if I think the company can turn it around and recover well, and if i like the company. Saves doing research and all that too!!

        1. I don’t bother with shares at all anymore….. I just hold three ETF’s in my Share ISA and have a direct debit going into each one each month.

          low risk (25%) – Jupiter Strategic Bond
          medium risk (50%) – Baillie Gifford Global Discovery
          high risk (25%) – AXA Framlington Biotech

          just try to forget about them and check up on them once a month to see how they are doing.

          1. I am a professional investment advisor, AXA Framlington Biotech has been one of the best performing mutual funds this year! good pick 🙂

          4. I wouldn’t underestimate shares, this is the way to invest money for a long term, for 20 more year for pension. I have my SIPP. Recently I bought 2 shares: in commodities and my favourite baring, which I sold a couple of year ago, price seems quite low atm.

    1. my gut feeling is not today…. unless the Dow starts tanking…..but never say never 🙂

      One of my golden rules is never to trade in the first half hour of markets opening….gives them a chance to settle a bit….also prevents me from making any knee-jerk trades.

      I’m going to wait now for an hour or two….. might get back in later today.

  11. That sounds like a wise choice… im going to stay out for now as well.. been dithering all morning

    1. …patience 🙂

      MM’s love these critical points in the day….. some people thinking “time for a bounce, and a directional change”…..others saying “hmm, it’s a false move…..will start dropping again”.

      I’m going to let the FTSE breathe for a while and have it’s lunch break 🙂

      …… if it drops below 6784 then I’m back in for another short.

      but I’m not going long until either a) the Dow gets started and the Yanks are particularly happy today…… or b) the FTSE has well and truly made it’s mind up about recovering, and gets back up to at least 6834

  13. I hate the choppy days but love it when it trends down. Managed to get a short in at 6896, then went to work and haven’t check it all day and now it’s 6783!!! unbeliveable.

      1. Great when you are on the trend already. Had a short order at 6915 for today which just missed….. again 🙁

    1. Hi Senu,
      1 ) Hi Highers & Higher Lows or Vice Versa – Lowers Low – Lowers Highs.
      2) Use an average such as 30 – if the bar closes above or below 5 or 10 min – change your view.
      3) Read what the chart is telling you & do not try to second guess it. ( e.g. If the bar closes below the average on a 5 min chart – the trade is Short and because you are a market professional – you will be “Long ” or “Short” – depending on the market signal …. won’t you ?? LoL

  16. another 12 points…not too bad 🙂 I’m out for the next half hour to see how the Dow reacts

  17. I’m thinking when is this going to turn and start to head back up, maybe after hours as it’s the 1st tomorrow.

  19. I’m done for the day now with the FTSE, full attention now on the Dow. Looking pretty choppy at the moment so no chance of jumping in just yet, but I think there will be some good points-grabbing opportunities this evening 🙂

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