Support 5940 5930 5922 5851 5781 Resistance 5990 6035 6050 6154

Good morning. Interesting day yesterday that played out with the arrows exceptionally well – but frustratingly just missed the long order first thing by 3 points (knew I should have set it at 5975!). Overnight we have had the rise to the 5980n area and with the 200ema here on the 30min chart it will be interesting to see if we get an initial dip to the 5940 area, before a push higher towards 6035 where we have the top of the 10 day Bianca channel. Prices are certainly moving around a fair bit at the moment with the volatility. Glencore came out fighting yesterday (had to really!) and their shares rallied 17% after saying that the business was viable. Its the end of the quarter today so the market might be keen to apply a bit of polish to the performance, Asia certainly has with MSCI’s Asia Pacific gauge rallying 2 percent in Tokyo, trimming its loss since the end of June to less than 16 percent, still the most since at least the third quarter of 2011.

US & Asia Overnight from Bloomberg
Asian stocks rose on the final day of the quarter, tracking a late rally in U.S. shares, as the regional benchmark index headed for its worst three months since the financial crisis.

The MSCI Asia Pacific Index gained 0.3 percent to 121.40 as of 9:00 a.m. in Tokyo. The measure has slumped 17 percent since the end of June, on course for the biggest drop since the quarter ended September 2008. It’s down 6.6 percent for the month.

Stocks have been volatile in recent weeks amid confusion over the Federal Reserve’s position on raising interest rates and concern the slowdown in China’s economy will curb demand for commodities and impact global growth. China starts a five-day holiday Thursday.

“Asian markets will be closing the month and quarter on what looks like a positive note,” said Chris Weston, chief market strategist at IG Ltd. in Melbourne “And given what an absolute shocker it’s been, traders will certainly take this.”

Japan’s Topix index advanced 1.5 percent after tumbling 4.4 percent on Tuesday. South Korea’s Kospi index lost 1.4 percent today as it reopened from a two-day holiday. Australia’s S&P/ASX 200 Index added 0.1 percent, and New Zealand’s NZX 50 Index slid 0.4 percent.

Futures on Hong Kong’s Hang Seng Index rose 0.7 percent in most recent trading, while those on the Hang Seng China Enterprises Index added 0.9 percent. The H-share gauge slid 3 percent on Tuesday, the biggest loss in a month, while the Hang Seng measure dropped 3 percent to a two-year low.

E-mini futures on the Standard & Poor’s 500 Index rose 0.1 percent. The underlying gauge advanced 0.1 percent on Tuesday, following five days of losses. The S&P 500 is poised for its worst quarter since 2011, down 8.7 percent. The benchmark measure is almost 12 percent below its all-time high set in May. [Bloomberg]

FTSE Outlook

FTSE 100 Prediction
FTSE 100 Prediction

The FTSE is just nearing the 200ema on the 30min chart as I write this so we may well see some resistance there and a little dip to start today, probably only down to the daily pivot at 5922. There is some rising 30min PRT support at 5930 as well, and with a green trend line now in play the 30min chart looks positive for a bullish session (at the moment anyway!). Its quarter end today so with bonuses etc tied into that, we may well have a bullish overtone. I think a rise towards the 10 day Bianca channel at 6035 is looking likely, and if it hits that level at around the market close, then a dip from there is also likely. We also have a PRT line at 6020 so a couple of resistance levels here. So bullish today, bearish tomorrow I am feeling!

102 Comments

      1. Yes thanks Nick, I saw that, 6034 is also 61.8% of 6133 to 5874. We’re also getting near overbought daily and it’s making hard work of even getting through 6020 and we’ve lost upside momentum already today.
        I’m still happy with scale up small shorts, 6030/6050/6080 etc but there’s a little voice telling me to wait…maybe it’s that fairly clear double bottom at 5880.

        Oh, what the hell, a small short at 6015, 12 pt stop.

        1. Morning tmfp. Really puzzled by your suggestion of us being overbought on the daily (!) Maybe if we got back up to 6200-400 I’d say yes. I keep looking at October 2011 where it rallied the whole month and retraced 75% of the drop. Anyway I think this ‘could’ go a lot higher. May consolidate around the 6000-6050 range today with more up tomorrow. Chinese stock markets are shut for a holiday for 4 days so plenty of room for the market to ignore bad news. NFP on Friday – the US seem to like to go up into that piece of news. Maybe see what the reaction is on Friday before looking at shorts again. Just a hunch – but probably wrong.

          1. Sorry ZZ typo, should read *hourly*.

            I’m working on the basis of “If it ain’t broke, don’t fix it”.
            Selling into strength has been highly profitable for me recently and when I decide on a medium term trading strategy I roll the profit/loss throughout the period that I trade like that.
            Basically, I could scale up shorts for 100 points, get stopped at 6150 (higher high) and still break even overall on that recent strategy.
            We aren’t a million miles apart on our current view of more upside within a 5870 and 6260 range, between the 50% retracement of the August drop, which held so convincingly three times, and an equally emphatic double bottom.
            Break 5850, which we could do in ONE day, and it’s all not worth a carrot imo which, given the fundamental world overview, is a fair valuation.
            A Bear till I die.
            🙂

          2. Thanks for the explanation – I agree we should see some more down action and it could occur swiftly. For now my tsi is pointing firmly up and on the 2-hourly about to get a bullish cross. Think we should see 6150-70 Thurs/Fri (maybe on a second leg up)which is my next shorting zone. For now this bull has legs … until they drop off.

  1. It’s unfair! Who allowed the price to break resistance overnight? Who would have imagined me trading at 1am? By 8am it looks like it’s nothing else to do. My yesterday’s long which was sabotaged by their unfair volatility. 🙁

    1. Jack2, yesterday I posted around UK market close time, that SnP should touch 1877, which it did after some struggle later that evening and FTSE was close to 5902 or so….Anyway I didn’t trade my short thinking on SnP, and didn’t buy FTSE long either at that time, as was quite late and only 1h or so left of US trading.
      Reason from my experience “fear” of holding overnight, but seems we missed all the bull run fun overnight….:-(

      Just wondering does anyone think with this volatility longer term views or holds such as 1-2days seems to work better?

      1. I avoid leaving trades overnight unless I am forced by being in a negative position. To be honest, I don’t want to find myself in a negative position which would force me to leave overnight 🙂

  2. Agree with that, wont fall much until tomorrow now I think too, question is how far up they take it today…during market hours and after hours. Anyway will let them take it wherever they want and watch for the 1h or 30min to cross first then maybe a short to hold for tomorrow or rest of the week?
    Nick the first 5-10min bullshit spike worked, for some short scalping, but just 10-15pnts.
    6035 10 Bianca and around weekly pivot, so important level to watch.

  3. Stopped out at 27. Always listen to the voices in your head lol.
    Apart from the ones that tell you you’re Napoleon.
    🙂

      1. ^^^^scroll up Jack 🙂
        tmfp says:

        “Looking to pull the short trigger now (6015) but something’s telling me to wait….”

        “there’s a little voice telling me to wait…”

        “Oh, what the hell, a small short at 6015, 12 pt stop.”

  4. I’m going to hop on this bull train for a bit, long at 26, got an uptrend going since 7am and there’s too much expectation of a fail in the 30’s.
    No heroics, just a little with a 10 pt stop.

      1. Pay no attention to me Jack, I’m probably overtrading a bit.
        Should turn off and do some gardening really. I think I will if this stops out, but one of those voices is saying 6050 by lunchtime.

        1. The good thing about trading off of trend lines is that after time you get to a natural break even stop, which I am now.

          1. Sure Paul, have a look at this morning in 3min chart.
            You can draw an uptrend line from 7.39 am till now.
            I longed at 10.25, just before it touched the line at 20 and bounced.
            Because that line is angled up, support is increasing about 10 points every 45 minutes till now it’s at 30.
            That’s quite sustainable indefinitely (short term) but obviously entails breaking previous highs which have gone a long way from the line.
            I bought because of that rising support and when it breaks will stop out, which is break even + now.
            How strict should you be in defining a break? that’s the tricky bit.
            Quite often a positive move follows a feint in the other direction, so in this case I’d want a 2 min close 2 or more points below the line to say it’s broke, which is about break even.

          2. Thanks TMFP
            a very clear explanation.
            do you also transpose the line higher
            to cover the highs of the move ?

          3. Yeah, here the top line is basically horizontal at 38 now so this is a wedge or penant. When you extrapolate the two lines into the future the formation should be resolved by then, in this case, noon.

          4. And there we go, one minute early 🙂
            Should fizz up from now, can still be a false breakout, only a micro one so far.

  5. Shorted Weekly pivot 6035, region as mentioned before, hope I get some points…as Hugh chart shows 6060 possible, I’m vary of that

    1. Just to say, closed this one for +2pnts, no much fun, also TMFP says 6050 soon, so waiting now on side-line 🙁

  6. Market betting on more QE which really isn’t positive is it? The market wants more inflation and growth not more QE because of stagnation and deflation? Simply confirms everything’s crap and it’s not even working. Still holding my bear view and thinking more long term. Obviously getting battered at the minute!
    Hope some have made some profits on this rise?

    1. Couldn’t agree more re QE, it’s like saying that a patient is getting better because the doctor’s prescribed stronger drugs. They may live a bit longer, but they’re still dying.
      What’s the situation in Japan now? Something like 90% of government bonds are being QE bought by the BoJ?
      Total madness.
      The global economy’s got like a game of Monopoly when one player is the banker and also has all the property, just going through the motions until someone tips the table over.

      1. I had a girlfriend once who flipped the table over and stormed off when i beat her at Monopoly. Here’s hoping the market does the same.
        She was equally as crazy and volatile as the markets as well.

      2. Just wanted to add…the more stronger drugs and crazy drug trials…the more side effects and more serious side effects….patient is on a down hill until we can say…”we can start to reduce the patient from drug dependencies…” – long way still

  7. OK chaps, bounced off new highs cos a bit overbought, now’s the time to load up for 6050.

    Standard disclaimer applies 🙂

        1. We’re getting a bit overbought, looking for a long exhaustion candle or two to take profit, probably around 50, maybe replace on a dip but see what the action is like.
          The uptrend line is shallow, currently at 42, but can’t last indefinitely….can it?

          1. ‘Oh yes it can’ … 😉 I think it may be a question of waiting to see if there’s any profit taking into the close, though I think it could get quickly bought up if the US decide to join the bull train. If this trend continues this afternoon 6100 isn’t looking out of the question.

          2. Normally I would have taken my target of 50, probably should have, but since I’ve been back I’ve been making good entries but taking profits too soon, so I thought I’d have a bit of patience with this one.
            Seeing as this is quite a stately rise compared to recent moves, I’m talking out loud to myself, not meaning this to come across as a tutorial or anything.

            At some point soon, we will break the up trend line but that doesn’t necessarily imply a plummet, probably even more boring sideways action.
            The much touted resistance around 34 is now support, but I will probably come out at 40 and see what happens next.
            This is only a 50 pt rise this morning, small potatoes really.

          3. ZZ: I break my trading day in two, 0700-1430, 1430-1730 because the DOW being open is a major extra factor that separates the two.

          4. From a daily candle point of view it’s more significant – 140 points so far from yesterday’s close – just most of it was accomplished out of hours. 15 minute candles have been hugging the rising 5 and 8 ema’s relentlessly. Last touched the 34ema at 01:15. Next touch of this line would generally be a buy. 34 ema is currently down at 6009, but could rise to 6040-50 by 16:30. Need to see if we get a touch on any end of month profit taking.

          5. I think I’ll compromise (always a bad idea) and lay a medium term marker short at 48 and run this long with a 42 stop.

          6. Jim – is your screen upside down 😉 My 2/4 hour are only going one way atm or are you referring to an indicator?

  8. ZZ, FTSE 4hrs e.g., I’m looking at a sweeping curve from about Aug 24, peaking Sep 09 and now declining. Agreed, short term is up, but descending peaks are there to see. I guess I’m looking for a fairly imminent max followed by a fall to maybe 5800-850. I’d rather it didn’t! 😀

    1. OK. We’ve been fortunate/unlucky to have V-shape tops and bottoms with the rsi. At some point this is going to change where price goes up on a declining rsi like it did in July/early August. I think retrace/consolidation would be healthy here for another leg up. Agree it could also be another V-shape top – probably should play that but I feel there’s a bit more oomph to come yet.

  9. Interesting now, back at 50 after missing my long by 3, would have taken profit on that here but not sure of shorting, a little overbought on the 1 min but…..patience.

    1. That’s a fail, should have shorted with a tight stop, will 38 hold or will it go deeper into support?
      I think people are realising that the DOW’s going to have to open well in an hour just to keep us where we are.

      1. Having said that, a naked rsi long at 30. If it goes t*ts up I’ll allocate it against my 48 medium term short lol. Cheating.

    1. Yeah, sorry about the volumes of reading material, it’s all ME ME ME (as an ex wife once said) 🙂
      Chart is very pretty, pls explain it Hugh.

  10. A typical bullsh*t DOW opening run up. I don’t know why they do it, it puts all the pressure on making back those 50 pts or the HFTs will see it as a top.

    1. Don’t know if it was weak bears closing? I’d like to think that was a brief example of whats been happening throughout the day? Weak bears closing – hopeful bulls coming in. When hope subsides we’ll be back down again.

      1. I don’t see what incentive bulls have to chase the market, it’s been coming to them for six weeks now.
        Until that mindset changes, selling rallies will be the best option.

  11. Agree TMFP, bullshit spike took DAX up to 9735, but only managed to short @9725, then got nervous and closed for +7pnts….typical of me! and then it falls big….

    Anyway had enough of scalping only few pnts at a time today, and is FED’s Yellen speaking today? Does anyone know what time? (maybe best to avoid trading this evening, expect wild trading then too?)

  12. “Lagarde: Global growth likely weak this year, modest acceleration in 2016”
    More QE needed and states not rising rates. Yet we climb?!

    1. Why, are you long?
      I thought they were iffy in 2011, how can you trust somebody called Mistake-akis ffs? 🙂
      I think they’d get broken up if they could find buyers for the bits. There’s a sub story that is hidden, some agenda we don’t know about.

  13. Sometimes I look at charts as if they are in different time frames, just for a different perspective.
    Although I’m a dyed in the wool bear, if I look at the FTSE daily as if it’s a 2 min chart and I’m scalping, to be honest I wouldn’t mind being long here, and the further it goes up the better it will look.

    1. Always problematic at this point tmfp — has it bottomed? Best guess atm — it’s peaking again — looking at 2/4hrs.

    1. Lol, if charts are to mean anything at all, the DOW must go down a thousand points.
      Not necessarily this week.

      1. That was a different world, the FTSE isn’t really in charge of its own destiny this time of day, just a £ clone of the DOW.
        Well done with forgetting the stop, just as well it didn’t keep going up, but it was an obvious local closing gambit, kicking myself for not shorting the 60’s.
        If the DOW gets back to 16200, might be cause for concern later.

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