Support 6081 6073 6036 6024 5967 Resistance 6095 6101 6103 6026

Good morning. Another volatile session yesterday which wasn’t really much of a surprise, with the FTSE hitting a high last night at 6120. The Fed hinted at a less likely rate rise in September now, which isn’t much of a surprise, though they are still saying that the data is strong. But the recent stock market weakness might cause them to delay. Asia stocks closed up for the second day, taking the FTSE up with it, though its now near the top of the 10 day Bianca at 6103.

US & Asia Overnight from Bloomberg
Asian stocks rose for a second day after U.S. shares halted a six-day rout.

The MSCI Asia Pacific Index gained 0.9 percent to 127.93 as of 9:05 a.m. in Tokyo. The Standard & Poor’s 500 Index jumped 3.9 percent, the most since 2011. Two things that have supported U.S. stocks in the past, dovish words from the Federal Reserve and improved economic data, halted a plunge that erased $2.2 trillion from equity values.

Global market turmoil has weakened the case for raising U.S. rates in September, Fed Bank of New York President William C. Dudley said, cautioning that it’s important not to overreact to short-term developments. Chinese stock-index futures signaled a rally, as contracts on the FTSE China A50 Index gained 1.7 percent.

“Solid U.S. economic data, stimulus efforts from the Chinese central bank and signs that the Federal Reserve are backing off from a September rate hike helped,” said Jasper Lawler, a London-based market analyst at CMC Markets. “Anxiety is likely to maintain a tight grip over investors until the wild gyrations in share prices calm down and signs of a bottom are put in markets.”

Japan’s Topix index rose 2.4 percent. South Korea’s Kospi index gained 0.5 percent and Australia’s S&P/ASX 200 Index climbed 0.7 percent. New Zealand’s NZX 50 Index rallied 1.3 percent.

The S&P 500 rose the most since November 2011 in New York, while the Dow Jones Industrial Average jumped 619 points, or 4 percent. Trading was subject to the same fluctuations seen in overseas markets. A surge in the first few minutes of trading was more than halved before an afternoon rebound took over. E-mini futures on the S&P 500 added 0.1 percent Thursday. [Bloomberg]

FTSE Outlook

FTSE 100 Prediction
FTSE 100 Prediction

We are starting off fairly positive after a decent US session that saw the S&P and Dow break back above fairly key round number levels (1900 and 16000) by some margin, and off the back of a positive Asia session. We are however just nearing the top of the 10 day Bianca and raff channels at the 6100 area so we may well see a pull back to the daily pivot at 6025 initially, though there is a pretty decent 10min rising channel in play, which has support at the 6075. There is also support on the 30 min at 6075 so the bulls might use this as an entry level to build on last nights gains. If the 6103 holds as resistance it might be worth a short here though to be honest over the next couple of weeks I am still feeling like we will see a bounce and am looking at 17250 on the Dow. That should tally with taking the FTSE back to 6500, so buying the dips does still feel like the right thing to do and I am still thinking that the Fed won’t cut rates in September, reinforced by Dudley’s comments yesterday.

119 Comments

    1. morning icarus
      ideally the w-4 should have gone down to 6050 give or take
      it halted at 73. so suspect that it has ended

    1. Paul – What time frame are you using for your Wave counts?
      I’ve looked at these but never really got a handle on them – to many if’s – buts coulda woulda shoulda..

    2. hugh
      use the 15mins – dont go below that as you are into smaller patterns that are suspect
      nick
      w-5 is higher looking at 150. this w4 is shallow and fits well, but a bloody pain to measure. todays low only closed gap. so ideally 50 to complete w4

  1. Making a meal of this ..
    I’m sure everyone is aware
    We’re hovering around the top of Monday’s Candle.
    Below and close below 6070 would seem to me that that was a failed attempt.

    1. 145 Point Gap from Last Nights Close…16233-16297.
      That’s a 64 Spread on the last 5 mins last night …
      25th was huge – 214 point

    2. How did you come to this prediction? Do you think there will be a pull back at some point ( re what you said overnight night?)
      Hugh, what do you mean by 16233-16297 and 64 spread (I get the range between the former 2). it closed at 16285 and the spread betters current have it at 16479 (h 16519)
      BTW thanks to both of you for the comments yesterday, I may just watch and ask a few qs if you don’t mind!

  2. Hugh, I get 340 as support hence stop at 301. If it gets close enough to 340 I would begin to worry

  3. w-4 still – its reached a nexus in the smaller waves
    all connecting down – esp once 04 is broken 12 should hold it then
    otherwise 72 low today completes w-4 & on way to w5 completion

  4. Quote Bloomberg headline – wall street chalks biggest gains in 4 years..wtf? What about the 10+% drop. What about the yoy return!! What about 2016 earnings expectations are an atrocity!

  5. Now the prices are rising I see the news flow has turned positive. 2 weeks of doom and gloom, then 2 weeks of positive news to take us back to 17250 Dow, 6500 FTSE, 10500 Dax?

    1. yes driving markets
      present wave count ends at 6150/60
      if if goes higher than that then reset of waves
      which does take ftse up to there potentially

      1. Paul
        Don’t know if I’m doing right thing but I’ve plotted.
        6070 as base –
        6130 – 100%
        Fib ext at 61.8 – gives me 6165.
        I’ll close off my Long here for some air
        That’s the plan anyhow – will probably change knowing me ! LoL

        1. hugh
          quite possible but not sure how you are getting the 130/70?
          w5 cannot go higher then 150/60 otherwise its reset and we can no longer use it

  6. icarus
    sorry did not see yours
    yes it is ftse
    no it is not an extended 5
    as w-4 has been narrow so that means a short W-5 approx 50/60
    above that waves are reset

  7. FTSE recovery looking a bit more secure now — we have a nicely rising 4hrs channel from Mon 24. 6200 looking good.

    1. us now dominant so will affect ftse, so could play an impt role in closing waves or resetting

  8. Paul, break of high the beginning of w4 on hourly on Dow. If you look at the recent lows and 15820 area that is wave 1. you can clearly see the remaining then

  9. icarus
    i am not sure how you get that
    could you give the prices for all counts till your w4 pls

  10. icarus
    dow – i was wrong about it being w-4 starting. its still w-3 up which if correct is good for another 120 – 140 points up
    however w-5 on ftse no more valid
    i can only see a w-4 down which means the downdraft has another 800 to 100 points down . this up move should not get higher then 6420/30

    1. reading that again – i need to go back to gcse enclish
      let me start again
      ftse
      the wave count up should have completed at 150/60 ( max 175 )
      now that above 6210 – consider this as completed
      the only way to get this move correct from 5770 low is if it is w-4 of the down move from july. if so this w-4 should not get us higher then 6420/30
      this means w-5 down could be a stinker to 5200/500
      looking at it any other count puts you in a small wave
      dow
      the uptrend is still intact being w-3 still. so if that is correct the final w5 should tie in with the completion of w-4 of ftse

      if none of this makes sense, dont worry i might be only talking bo***cks

      1. just incase i am not talking s**t
        w-3 should complete before it reaches just shy of 16690/700 to vaildate this wave

  11. Makes sense Paul. I think timeframes for major count is different. My major count is based on hourly only

  12. Hugh, what’s the situation on the trio, I’d be interested to know in this area if its overboard or developing

    1. Icarus…
      No 1 min entries today surprisingly
      I mentioned earlier the 1 second – which, to be honest has given me my profits today. I started getting a bit choosey when things really picked up above 6180 so stopped.
      I think I’ve got to have a think about my trading & tidy it up a little (which means in reality – “alot” !)
      Of the variety of trades – the quick small pointers seems to work for me.
      This could possibly be also because I’m trying to “work as well” ! So I’m possibly not giving it 100% of my attention.
      My MA Trade seem to fall apart…many excuses …lack of detail.

  13. is dow likely to sell off today. each time it bounces off 600 the drop is less and oil is up 9%. I got out at 527, silly me.

  14. Cheers hugh. Interesting…

    Milka, I think 650 and at best 790 on the cards. But lets wait and watch. i think we will trend down slowly and painfully to the recent lows.

    1. would be pleased to hear your count prices on dow
      if you can also do the ftse – even better

  15. Stop at 581.
    Will short 790 if we get there today. Unlikely though! Maybe overnight…

    Huge news out midnight on China should get the sell off starting

  16. Milka, I think the buying is overdone…with the media hype and stuff. Reality is economic conditions are not right Across the world. If you are feeling bullish at these levels, we probably are in wave 5

    1. Icarus, what’s the news from China this evening? I don’t see anything on the investing.com economic calendar.

      I was reading somewhere that the uptrend would start once we passed 16600. I i think thats a long way off the lows to start being bullish. I feel its missed the boat territory.

    1. I am in awe. correctly guess the rise and the drop! Would you care to share what analysis you used. Also with elliot waves, how do you set them up. I last tried to use them in oct last year and got an ending diagonal on the ftse 100, just before it dropped to 6100

  17. Bad omen this price action. Shows bulls want to go higher. Will have to think now. Best two days of the week so far!
    cheerio!

  18. Tempted to short here based on 5 min but will wait and see what tomorrow brings. Europe is a tough cookie

  19. I’m out tomorrow morning …so won’t be tuning in but I need to make some decisions over the next week ..
    Also – I’ve got a queasy feeling about September so much so that I may just let the whole month pass. Sometimes it’s just too volatile for me !

  20. Paul, I get wave B and minor count 5 on all indices. Do you?
    This would mean that we would have to close at the lows of the weekly candle on all indices today! And continue sell off next week

  21. Preferred found based on daily/ hourly combo.
    Alternate based on weekly/ daily combo.

    Your views will be much appreciated

  22. icarus
    ftse
    the only valid count is a w-4 in a downtrend
    yest up count does not make sence if ended t 6230, & if ended as expected at 150/160 – then alternate count not possible. there is no up count that is valid,
    which only leaves with w-4 downtrend
    dow
    as stated yest we had to end below 690/700 for it to be valid, so far that count ok at w-3

  23. Sp far my shorts are in the money. So I am guessing my count of major B ending is right. This is the start of minor w1 down on the way to the bottom C. Coincides with wave 4 bottom on the way up

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