Asia sinks to 7 week low 6110 support 6145 6193 resistance

Support 6124 6113 6080 6061
Resistance 6143 6145 6168 6193 6194
Good morning. Slightly frustrating yesterday in that it followed the arrows but just missed the orders for the long at 6120 and the short at 6180 by a few points. After the initial rise and dip it was a fairly flat day hovering around the 6140 area for the remainder of the day. Overnight has been fairly flat as well. Asian equities traded lower across the board with Fed rate hike concerns and weaker energy prices a driving force for price action. We have a tiny dividend of 0.8 this week so not likely to see much buying at the bell tomorrow.

US & Asia Overnight from Bloomberg

  • Futures show 54% chance U.S. interest rates to rise by July
  • Gold slips for fifth day in a row as nickel rebounds

Asian equities sank toward a seven-week low and the dollar strengthened as speculation mounted that the Federal Reserve will raise interest rates as early as next month. Crude oil fell with gold.

All 10 industry groups declined on the MSCI Asia Pacific Index as the Bloomberg Dollar Spot Index climbed to a two-month high. Malaysia’s ringgit led losses among major currencies, while Australia’s dollar weakened as central bank comments fanned speculation borrowing costs will be lowered. U.S. crude traded near $48 a barrel as Canada worked to resume output following devastating wildfires. Gold dropped for the fifth day in a row, its longest losing streak since November.

Fed Funds futures are indicating for the first time since March a better-than-even chance that the U.S. central bank will raise interest rates by its July meeting. The speculation is driving a dollar rally that’s somewhat reminiscent of early January, when a global equities selloff wiped out about $7 trillion of market value in the wake of a December rate hike by the Fed. Unlike back then, oil and China’s yuan are showing signs of stability and James Gorman, chief executive officer of Morgan Stanley, said he expects financial markets to rebound in a return to a “more normal environment.”

“If the U.S. does raise borrowing costs, we could see some risk-avoiding moves like we had last December,” said Toshihiko Matsuno, chief strategist at SMBC Friend Securities Co. in Tokyo. “The market’s wary of this.”

U.S. data on Tuesday are forecast to show sales of new homes climbed for the first time in April. Germany has a report on investor confidence due, while France has a gauge of business sentiment coming. Euro-area finance ministers will meet to discuss how to conclude Greece’s bailout review, including debt-relief measures and contingency plans in case budget targets are missed. Hungary’s central bank is widely expected to cut interest rates, while Nigeria’s is seen boosting borrowing costs. Turkey also has a policy meeting scheduled.

Stocks
The MSCI Asia Pacific Index lost 0.6 percent as of 1:04 p.m. Tokyo time. Benchmark stock gauges fell across most of the region, led by declines in Shanghai and Tokyo.

Futures on the S&P 500 Index were little changed, after the benchmark declined 0.2 percent in the last session. Contracts on the U.K.’s FTSE 100 Index fell 0.3 percent.

“The market has good reason not to completely rule out a Fed hike over the next few months,” Mark Smith, a senior economist in Auckland at ANZ Bank New Zealand Ltd., said in a client note. “Even so, the Fed is likely to move carefully and slowly.”

Federal Reserve Bank of St. Louis President James Bullard said Monday he doesn’t expect a U.K. vote on European Union membership next month to influence the U.S. central bank’s decision. The San Francisco Fed’s John Williams said two to three rate increases this year are still “about right,” a sentiment echoed by the Fed’s Philadelphia president Patrick Harker. Fed Chair Janet Yellen is due to deliver remarks on Friday.

Currencies
The Bloomberg Dollar Spot Index, a gauge of the greenback against 10 major peers, rose 0.1 percent. The Japanese yen weakened 0.2 percent after strengthening 0.8 percent on Monday.

The yuan was the most resilient of 31 major currencies, edging 0.04 percent higher versus the dollar and trimming this year’s loss to 0.9 percent. China’s central bank scrapped a market-based mechanism for managing the currency on Jan. 4, returning to a system whereby the exchange rate is based on what suits authorities the best, the Wall Street Journal reported, citing unidentified people close to the People’s Bank of China.

The Aussie dropped as much as 0.6 percent after Reserve Bank of Australia Governor Glenn Stevens said inflation is too low, reinforcing expectations of further interest-rate cuts. The monetary authority lowered its benchmark rate by a quarter of a percentage point to a record-low 1.75 percent at the last review on May 3.

The ringgit slid 0.8 percent as the drop in oil prices dimmed prospects for Malaysia, Asia’s only major net exporter of crude. The Kiwi weakened 0.7 percent.

Commodities
West Texas Intermediate crude fell 0.4 percent to $47.89 a barrel before weekly U.S. government data forecast to show crude stockpiles declined amid a glut. All of the Canadian oil-sands facilities that workers evacuated as a wildfire spread are being allowed to prepare for restart as cool, humid weather has helped contain the inferno.

Gold retreated 0.3 percent, after sinking more than 2 percent over the last four days. The prospect of a U.S. rate hike diminishes the precious metal’s appeal as a store of value.

Nickel added 1 percent on the London Metal Exchange, after sliding 2 percent in the last session. Copper snapped a four-day losing streak.

Bonds
Australian government debt recovered from earlier losses, with 10-year yields little changed at 2.29 percent after rising as high as 2.32 percent. Similar-maturity U.S. Treasuries yielded 1.83 percent, similar to Monday’s closing level.

Deutsche Bank AG had its credit rating cut by Moody’s Investors Service Monday, with the agency claiming the German lender faced mounting challenges in executing a turnaround plan. The bank’s senior unsecured debt rating was lowered to Baa2 from Baa1, leaving it two levels above junk. [Bloomberg]

FTSE 100 Outlook and Prediction

FTSE 100 Prediction
FTSE 100 Prediction

Today we have the pivot at 6145, and also the top of a declining channel on the 10 minute there. We also have the 30 min coral line which has turned red (signalling a downtrend) so with 3 resistance levels there and a fairly flat session yesterday afternoon this could well be worth a short at this area. Above this we have the top of both the Bianca channels at 6193 so if the bulls were to pull it out the bag today this area is likely to cause a stall, and should see some bears appear. Whilst we are below 6150 then I am thinking that we will likely see 6080 or lower again. The 2 hour chart Hull moving averages are closing their gap and if we are bearish today are likely to cross to the downside. We tested the 25ema on the daily chart yesterday at 6173 and dropped off from there, so the trend is still bearish for the moment. The main support on the 2hour chart is 6120 still so the bears will be keen to break that first thing.

113 Comments

      1. pulling hair to be honest, it triggered at 6149.5 and then
        i got stopped out b 20 points……bugger, bugger:)

          1. yep, well i am learning 2 weeks ago after that loss i would have done some revenge sprint trading.
            Not anymore, tomorrow is another day.
            ( i only trade in the morning)

  2. Hello again.
    Wish I still had my 09 long lol.
    Currently top picking after a couple of stopped shorts into this surprising strength, light scale up 55/65/75 stop 85.

          1. Certainly surprised me, the range seems to be tightening.
            Anyway, my grand says it’s bullsh*t.

          2. Just looking back at the action, those 0900 candles bear a thought (conspiracy theory coming up).
            I’d say 90% of the time that drift off with lengthening candle 0859 FTSE would extend, but it was aggressively bought…..

  3. Morning all, I managed to get in at 12 and for old times sake sold them at 40. Seems to have a bit of a rocket up its behind, be interesting to see if it can hang on over 60 for a while. If I had some nuts I would be following you tmfp, with step up short but I think it could just as easily be 6230 as it could be 6100 so no mans land for me.

    1. Yeah, I ain’t going to marry it, total is only 2 units if all filled and a -20×2 isn’t going to kill me, got to be done really. This strength seemed to come from the DAX, those crazy germans.
      At the time I thought the opening weakness was a bit token, but, hey hindsight and all that….

      1. Just for something to do a gentle short at 69, stop at 80, limit at 51. Fully expecting to get stopped but maybe have another go if I do.

  4. The press’s reason for this strength

    European markets recover from early losses
    Posted at
    09:30
    Britain’s top share index reversed losses at the start of trading, helped by a well-received trading statement from Kingfisher and a broker upgrade for Imperial Brands. The FTSE 100 was up 28.20 points, or 0.4%, at 6,164.63.

    Frankfurt’s Dax and the Cac-40 in Paris were up 0.65% and 0.9%

    lol

        1. You don’t know how funny that is.
          In the bike club world, there’s a lot of shall we say right wing attitudes, I quietly wind them up with “Oh really?” type comments and my nickname is “Citizen Smith”.

          1. 🙂 I was looking for one about who will be first against the wall,but found that one .Read something on Reuters yesterday about Oligarchs and Generals in Asia trying to reignite 70’s style attacks on “communists”,doubt the Americans will pay as much for pogroms now as they did back when Vietnam was going on though.
            Yesterdays 173 and that 81 would be a nice r area to fall from,maybe those Chinese numbers tomorrow will break the 6100 .

  6. And back to the highs after that breather.
    Not looking too good tbh, I think there’s an awareness of of a number of stops around my level and wouldn’t be surprised to see them hunted.
    Having said that, I don’t see much US interest later in following this rather mysterious bullishness, so I guess, if I get stopped and it runs on to 200 ish, will short again.

    1. A minor rejection there, 9890 is the one to crack if there’s any likelihood of this turning sour for the bulls.

  7. Looks like I’ve been stopped, no surprise. Back in my box for a bit but agree with tmfp, if we see 200 I’ll let them have a few.

  8. Morning Chaps,
    LoL …even my Robot RSI 6 20/80 has thrown in the towel this morning after a couple of great days – Friday & Yesterday.
    Friday Here
    http://imgur.com/a/kI3kf
    Monday Here
    http://imgur.com/a/ISXeA
    but today closed out so far -£1300 … & reset itself as it starts to build around these levels…(Bit of a Martingale system – I think but interesting to follow

  9. Morning all…..had a really good morning…managed to gain quite a lot of points….I exited first longs too early at 54 and 55.8. So got in again and exited between 81.5 and 83..3 on another 4 …I held that Dax long over night but have sold that now too for +84.2pts…….I think I best stop now…..when I get over confident I end up losing it all again so time for some lunch….Good Luck everybody..

      1. Nice anstel, blue’s a bit in short supply over here since first thing 🙁
        Currently bending the rules slightly re stopping out my shorts lol.

        1. tmfp ,Hugh,WSF.please could I ask you…….how much RAM do you use in your computers to run all your multiple charts….I’m using an old laptop with 3gb and it struggles sometimes…I think there might be a bug on it or something but I just wondered what you considered enough RAM….thanks….

          1. My collection of scrap is about the same as yours, there’s lots of factors, isp, the site itself, time of the month etc.
            Still undecided about the Great Upgrade, got a fried brain from the choices.

          3. Hi Anstel,
            My Ram 16 Gb
            Also two Nividia GT610 Cards (4 screens)
            This is something to be careful in choosing.
            I was looking for a completely quiet computer having had 8 years of one making fan noise all day – drove me barmy. It wasn’t that it was noisy – it’s just that you knew when you had turned off – peace !
            The Nivdia GT have big heat sinks rather than fans on them (they also take up two card inserts each – hence tallish tower). It’s always quiet.
            I’ve put my spec here. It’s two years old now – so the spec. maybe different – Paid £975+ VAT & picked up four 24″ screens (all the same of various) off ebay for £50-60 each . Lovin’ it …still..
            imgur.com/SBIES1o

          5. Re Win7, are you getting harassed by Bill’s boys to go Win10?
            Don’t, my SO did and it’s very greedy, counter intuitive and full of tracking stuff, hence my decision to go Linux next.

          6. Thanks Hugh that looks a proper all singing and dancing machine……I have an old 17 inch monitor…it’s in great condition so I think tmfp mentioned plugging it in with hdmi some time ago…..think I will try that first and see if I can get that to work with my 3gb Ram…..it might look a bit Heath Robinson but if it works it will be a first step……..thanks ive photographed your specs so I have a copy……

        3. Win7 was pretty good for me but I hit something the other day and it started to update to Win10 so I let it go. Think it’s OK – few things throwing me though.
          Linux – just don’t know enough about it & haven’t the time to learn at the moment…

      2. anstel, mate, you haven’t got lucky you’ve taken the blue and are sitting there happy as Larry! Good man, keep up the good work.

        1. Thanks chippy I owe you and tmfp one…..I had chippy says …take the blue…take the blue ….going through my head…slowly getting the hang of it….cheers mate and good luck today….

  10. Now I’m getting the hang of the lingo…..FOMO short at 85, looking to step up so limit at the big figure (200) and up to our old favourite, 6235. See what happens.

  11. Having had a long think about this, I’m still persisting with my shorts, mainly remembering the similar situation a couple of Thursdays ago when I got whipsawed by another rally into the 80’s that failed.
    So… currently short 2X65 av, adding 1 at 95, stopping all at 210.
    Poor trading in lots of ways, needing a weak DOW for which there’s no justification and deserves to lose really, but we are in what I perceive as the “sell zone” part of this current range.
    Don’t try this at home….

          1. Yay, blue ink showing on my latest short, even nicked a +6 scalp off 200. Go bears go!

    2. and a bit of fine tuning, 210 makes no technical sense, so more ££££’s risked with stop to 226. (that’s 225, +1 for luck).

    2. One or two of us are rather hoping that it does Jack.
      Pretty strong though. What was the area you mentioned yesterday, 10050/100?

  13. I think I might give cliff abit of action later but it’s going to have to go up more before I dare to short this….

      1. Patience is a virtue Jack….no point in giving yourself too much pressure….these steamrollers have a lot of momentum….

  14. Hey guys !! Went for interview in london andmy phone died in half way but to come back and see 6129 L at 96 is priceless !!. Shorted @ 98!! Hope everybody having fun !! today … Time for Nicks second arrow 😛

  15. Top of the DOW’s channel approaching at about 17700….
    Also rsi getting a bit hot on the various hourlies, but that’s more to do with the recent sideways stuff than anything too profound.

  16. Like you said tmfp the car can keep going at 7000 rpm for quite a while….the engine only seizes after prolonged 8000 rpm redline…..I do listen to you tmfp you know….

    1. Hmmm, not really in this context, I meant more extended periods when I said that.
      Despite being painful for me (not quite yet) what have we had?
      A bull day.
      Everything still trapped in the established ranges.
      The only good trade is short here, not because I’m a bear but because nothing has changed technically, just like I said the only good trade the other day at 6050/60 was a long.
      In a ranging market you trade the range. When it breaks out of the range, different kettle of fish.

      1. The RSI on the 2 min Dow has dropped back to about 55 on my chart here but it’s still holding just under 700….I think if we get a second wind on Dow we could hit that 40 on Ftse….

  17. As I’m just about to take the big ouch, minor observation that the FTSE has actually under performed the other two today.
    DAX is ~300 off the low, we’re 115, and DOW since 14.30 is up 115, we’re only 30.

    1. I think it could go more…..small dividend to encourage short position…I’m thinking 40….

    2. Doesn’t matter what ever way you look at this it’s o/b..statistically
      Been stopped out several times.
      One final FTSE S 6220 S 20 points Tgt 6160 (RSI Trio)
      & the robot -(£2200) Needs to start seeing <6212 in sequence of 10's thereabouts. Will post later.

  18. Diificult to see much to go for MHH wise, last minute squeezed shorts paying loadsa money, or a profittaking dip?

  20. Oh that’s just bloody great my iPad running the app is showing a different price to my laptop……they must be getting nervous….:0)

  21. I’m of the frame of mind that will wander down to 6145-50 just to let everyone square up…seen it before…it’s just when – maybe not this evening, but maybe over the next couple of days…

    1. The word lulled……and the phrase “false sense of security” are coming to mind for some reason….if it does something 3 or 4 times the same it usually has a surprise in store….and we get blindsided….got to be open to all possibilitys however unlikely…..

        1. No I don’t mean 6050 tmfp…..I think it’s going to stay stronger overall but I do believe we will get a drop when the steamroller needs to stop to fill its water tank…..

    2. There’s a certain passing resemblance between now and around 11th April Hugh, and plenty of rsi room for this rally to extend further without a pull back.
      FTSE’s looking more upside possible than the other two: DAX still below previous May highs, DOW still banging on the top of its channel.
      Interesting situation for the rest of the week.

  22. Big fat green daily candles then for the DAX and FTSE, not yet for the DOW.
    Tomorrow’s another day, enjoy your evenings!

  23. I thought I’d posted earlier but just checking in after some manual labour (NOT woodwork!!), anyway it seems I’m a little shorter than I though I would be at 8.00am this morning!. Sit rep – short (obvs – getting the hang of the lingo!), average at 6212. I’m amazed that I’ve been that silly, having said this morning that it could easily hit 6230 to start going short at 180! I really ought to read what I post.

    1. Why would you be doing woodwork when it’s obvious you’ve been peeling spuds!

      GL

  24. Hey here’s a laugh…..I thought I’d see if I could nab a pt or two LONG……lol it worked…out for +2.5 pts …..I’ve seen this type of market action before…..think I’ll go out and check in later when it’s over 40 :0) ….sorry you are stuck in the short at the moment chippy…when these steamrollers get going they don’t like to stop in a hurry……I’ve been flattened by them before….once flattened….twice cautious…..very best of luck mate…I could well be joining you later on the short side….still debating if it’s a good idea ….I’m thinking what I could lose instead of what I could gain….

  27. Well I’ve just had a look……6 pt spread…..6247 to sell…..I think I’ll leave it….see what happens tomorrow…..Still think there is life in the Dow….discretion is the better part of valour…..plus I’ll sleep better…..good luck everyone…..catch you all tomorrow……

  28. Robot Results for 24th May 2016
    you have to add ” http:// ” before the link
    imgur.com/a/Nu1Wt

  29. Live market action brought to you by anstel intel….your as it happens guide to market action …….It’s got the bit between its teeth again….oh fancy that it’s a 6pt spread…..so to get in on the action the price of admission is 6 times higher……well they wouldn’t want anyone to make any money would they? Lol….the higher it goes…the bigger the fall……just don’t get impatient….it’s got a set of wheels that just won’t quit……Back to sleep now….see you at 6300 :0)

    1. Think I might go long Dow for a laugh at 39…well it’s cheapest entry price to all the fun….not too big just in case ….. come on 18300 :0)

          1. Ummn…well…hey Fred Dibnah…….you seen any steamrollers on the road in the last half an hour ????

          5. Blue….chippy said take the blue….the more the merrier…but I’m fully prepared to add higher if it jumps……

          6. tmfp mentioned 770 on the Dow yday…I think we are in the ball park Sharma…..just depends if the steamroller has gone in for maintenance….soon find out????

  30. Bought my 71.2 one back at 60.9 for +10.3pts … And I bought my 56.7 one back at 54 for +2.7pts……might not sound much but I wouldn’t get paid that much for 15 mins work if I was a politician…….even with their bonus’s….:0) thanks chippy I think you sit on my shoulder every time I get blue…..

  31. Good stuff, anstel.
    Probably be a bit After the Lord Mayor’s Show today while everybody gets used to seeing some different numbers.
    An in and out morning with modest targets I reckon.

  32. read on the net the rally across europe was due to the markets feeling that the stay in brexits camp was miles ahead, think they should rethink the brexit vote will be very close imo.
    My thinking is that there going to push this as high as they can before the interest rise in America.

    1. Re Brexit, as you probably know IG have a binary going, currently 79/82 for stay, i.e. ~4:1 on bet.
      Probably a way to use that for a FTSE hedge or, if you do believe it’s going to be too close to call, not a bad straight flutter.

      1. Not a very good one if it was… now yesterday, THAT was a stop hunt. 🙂

        10pt candles on the DAX, cos it’s only got 30 constituents and volume looks low, can be literally one order placed at market.
        These + a bit – a bit moves are just the market doing its day to day business, trusts liquidating, pension funds buying their daily ration, that sort of stuff. A lot of it isn’t short term price sensitive.

Comments are closed.