Support 6288 6239 6225 6183 Resistance 6339 6342 6364 6380 6409

Good morning. A pretty bullish day yesterday trending in one direction, fortunately taking our long from 6220 with it. As it happened it rose all the way to the 6320 level after the bell, even managing 6340 before its dropped back a bit overnight. Not by much though! The top of the 10 day Bianca channel is 6339 so the bulls will be keen to break this level this morning to push higher but the problem with rising too far too fast is that you then get a sharp correction in the other direction, so be cautious for longs as we start to test the upper bands of the daily channels (Raff 20 day is also 6340), and we also have a daily RSI figure of 66 currently.

US & Asia Overnight from Bloomberg
Asian stocks rose for a fifth day, following gains in U.S. equities, amid speculation that global central bank policy will remain accommodative to counteract weak economic growth.

The MSCI Asia Pacific Index climbed 0.8 percent to 128.88 as of 9 a.m. in Tokyo, extending its five-day gain to 6.4 percent. Futures traders see only a 10 percent chance the Federal Reserve will raise interest rates at its Oct. 27-28 meeting following weaker-than-expected employment growth, while 17 of 36 economists surveyed by Bloomberg expect additional easing from the Bank of Japan by the end of the month.

“Markets continue to believe that weak data will pressure central banks in Europe and Japan to provide more stimulus and will delay the U.S. Fed in its pursuit to begin withdrawing monetary stimulus,” said Matthew Sherwood, head of investment strategy at Perpetual Ltd. in Sydney, which manages about $21 billion. This “continues to have investors believe that asset prices can defy the weak growth environment.”

Japan’s Topix index rose 1.4 percent after the yen weakened 0.5 percent on Monday. Prime Minister Shinzo Abe’s efforts to push through structural changes to recharge Japan’s economy got a boost as negotiators reached a deal on a Pacific trade pact that would create the world’s biggest regional trade zone. The Trans-Pacific Partnership still needs to be ratified by lawmakers in the 12 member nations.

Australia’s S&P/ASX 200 Index gained 1.2 percent and New Zealand’s NZX 50 Index climbed 0.8 percent. South Korea’s Kospi index rose 1 percent. Mainland Chinese markets remain closed for a holiday, while Hong Kong is yet to open. Futures on the Hang Seng Index gained 1.2 percent.

U.S. Services
The pace of growth in U.S. services industries cooled last month from the best readings in a decade, a sign consumers may be taking demand down to a more sustainable level in the face of global weakness. The Institute for Supply Management’s non-manufacturing index declined to 56.9 in September from 59 the prior month, the Tempe, Arizona-based group said Monday.

Traders see a 35 percent probability that the Fed will raise its target rate by December, down from a 58 percent likelihood seen a month ago, according to futures data compiled by Bloomberg.

In Japan, the Bank of Japan starts a two-day meeting Tuesday. Two of 36 economists surveyed by Bloomberg expect additional stimulus this week, with 15 more forecasting the central bank will ease policy at its Oct. 30 meeting.

E-mini futures on the Standard & Poor’s 500 Index slid 0.2 percent Tuesday. The underlying measure added 1.8 percent on Monday to cap its longest stretch of gains this year. [Bloomberg]

FTSE Outlook

FTSE 100 Prediction
FTSE 100 Prediction

My bullishness has weakened today and I wouldn’t be surprised if we get a dip down to the 6220 area from where we are as I am writing this (6320) to test the bottom of the 30min channel. Below that we have the 30min 200ema at 6180ish, along with a major PRT support line. A mentioned above I am always a bit wary when we have a few up days on the trot, especially trending ones as its like its risen too far too fast, everything becomes over extended and therefore I expect a snap back at some point – same as if it drops too far too fast. So, for today I think a short now to target at the very least the daily pivot at 6288, and possibly 6220 below that. If the bulls defend that level then a rise back to the 6300 level and a period of consolidation after the recent rises while we await the next bit of news! My 10min chart is bearish to start the day, whilst the 30min is still bullish, but with the gap between the moving averages narrowing – so early bear will more than likely lead to a cross and a bear signal.

102 Comments

  1. Great opening call Nick! It must be a while since you recommended an early short?
    My overnight 6325 short paid off, missed the 45 stop by half a point hurrah!
    🙂
    Luckily didn’t trigger the buy back overnight so still short with 85 stop.
    Looking to reshort on an attempt at 6290/6300 and same target as you of around 6220 (25% rt) for a long.
    Nothing broken on long side for the time being, but overextended. A bit of bad news and mid 6100’s could be quickly on the cards.

    Just added to short at 70 same stop

    1. I don’t do it very often but didn’t press the button on that stop just yet, probably will think again if we get over 6300 convincingly

          1. Hey if we get nothing else out of these markets at least we get a good bloody laugh at our financial system :0)

    2. Thanks tmfp, yes it just looked like we were going to drop from that 6320 at 6am as I was looking at the charts. Just shorted again at 6303.

      2. Yup.
        Just doing a bit of micro stuff, covered 1/3 of short at 94, it was a bit big, it might have another push, just giving me some more bullets to fire hopefully.

  2. How did you get 6220 so precisely yesterday, Nick? For me it gets clear on hindsight only at 6230 at 8.36.

          1. Absolutely.
            I was thinking that this morning when I logged in and saw I’d missed being stopped by 0.4.
            Good ole IG, I take it all back.
            🙂

      2. how can this be luck tmfp
        nick has proved too many times for this to be luck
        i think he just knows. how ? just cant work this out
        brilliant is all i can say

    2. Tricky to know where to stop shorts this morning… added to my short at 6300, stop on all to 6315 I think

  4. Couldn’t get on a train (fighting with computer here, so slow it is). Now just watching where I wouldn’t have come in.

        2. Around a 50% retracement level though,so if it does it could be quite a move and it even looks like 5 down 3 up,so if it stays below the last high … g/l.

  5. so Nick, tmfp, jack & senu all of you short
    i have tried all combinations and permutations complicated and simple – but just cannot see any shorts here at all
    whats wrong with me ( this is mr. )
    i want to long but all of you are so convinced, making me scared
    all i see long
    and Nicks 6200 & 6150 prediaction today tommorow is scaring the s*** out of me
    to place a long

    2. Hey Paul just shut your eyes and press a button,don’t try to make any sense out of it,in my very limited experience you are best to sit on your hands and preserve whatever capital you have till all this bullshit finds the level it is required to attain,then maybe we will have a market back that we have a chance to trade.

      1. Paul no offence,but isnt that for the same reason as yesterday though?not having a R/R you can live with unless your success rate is over 80%,so if you change that you wont be nervous about taking the trade.

      1. Jack2 a bigger timeframe with a S/L around 930 and targets in all that space down to 9400 is what I thought you meant.Sorry.

    4. I’m getting a little disenchanted with my short, I must admit Paul, but I work on a shorter time frame than Nick.
      The rise has definitely been quick and at 6300+ it’s quite overextended.
      Although we are supposed to wake up fresh and neutral every day, none of us can forget the sharp drops recently and at 6300, we’re only 40 points off the top of a 450 pt rally.
      You know my contrarian mantra is sell strength, buy weakness: 6300 is strength.

      1. I know the feeling, tmfp, as I am out and got all losses back from 35short today.
        Paul, I am also inclined long generally because of EMA on 1 hour. However occasional shorts will take place.
        If you prefer longs, take longs when you see a set up, if you prefer shorts, take shorts if you see set up.
        I took short35dax in hope to break 35, didn’t happen – lost 35points.
        Took short 69/61av=65 and out at 45, got 20+20.

  6. Hi All,
    Didn’t have any short on FTSE all morning, then saw DAX risen, and luckily we took Nicks short order and banked +21pnts within 5-10mins….sometimes if you miss the train, don’t just jump on anywhere on the track, wait for next train, safer. Sat on my hands while every1 was making money shorting ftse – was hard but didn’t want a bad entry.

    1. Hmmm, I just covered another 1/3 of my short, thinking 3rd try at 6310 might go through. Not particularly good trading, anticipating a breakout, but downside has been disappointing since 60.
      Just my 2 cents, GL.

  9. Still not liking the short side until DOW opens, at least.
    DAX not playing though, confusing, so out.

      1. But it’s not going to get there in anything resembling a straight line,it will be taking trailing stops out left right and centre,time for some weeding.

    1. Looks like it’s going after that previous swing high, 16935 doesn’t it?
      It may have the legs too.

          6. Third time goes through 770?
            Yeah I was looking at that..prob would wait till it broke then sell the following rally, tricky…GL

          7. joined you there Nick at 84 with a 10 point stop. What is your target ? I think it should get to 668.

          8. Yeah I think there’s downside. don’t know about 100 pts, but short equiv FTSE at 20, stop if DOW breaks 16800

          9. I’m going to b/e stop on this, too tired to watch.
            “Time for your nap, Mr. Tmfp” lol
            GL chaps

  16. Can anybody explain, is it short happening or long? I was thinking to go more long but now not too sure..

          1. Good one. I was tempted to go, but got 35 points today, didn’t want to risk. It’s better another day.

          2. Yes I had a long on Dax this morning from 750 and closed it at 870. I didn’t have any planned trade after that but I liked the 1 min 16:05 candle on Dow with just 10 point risk went for it. Already banked 20 points of the full stake. Closed the rest for 20 points.

            900 not coming today may be revisit to 668 before further highs.

          3. Yep, at 16.05 I noticed that candle (dow) and thought that’s a nice pushing candle along EMA, I missed that one, but you took it in right time 🙂

          1. Yeah, it was alright thanks, still smarting from calling that closing rally and not shorting it but, hey ho, that’s life.
            🙂

    1. glad i did not put a long on ftse
      imagine i would have to have held it overnight
      and all the mega bucks i would have made would have been a waste of money
      see you guys tommorow, or on 2nd thoughts maybe not
      —–
      and here i was thinking how nuts i was in the morning
      now all of a sudden i am feeling really on top of the world

      1. Hi Paul (and Mrs. H)
        You were talking about a long around 6295 I believe, prior to the run up to 6340 that was pretty much overbought and likely to fail. A tight stopped long would have given you the chance of maybe +40/50, in and out in a couple of hours, bang, thank you very much.
        If you’re a bit short of confidence the last thing you want to do is shoot for the moon imo: certainly stay away from overnight positions, very bad for the sleep.
        It’s not as if there isn’t enough movement from 8 till 5 to make money.
        Get a few +10, +5, +20’s under your belt, have a bit of fun.

  18. 14/10/2015
    08:51
    £1,083
    21.66
    1
    Short
    FTSE
    6285
    6306.7
    2
    6242
    C
    6280
    5
    £5
    £1,088
    RSI 1 Min Chart >90 = Short

    14/10/2015
    09:07
    £1,088
    21.76
    1
    Short
    FTSE
    6310
    6331.8
    2
    6266
    C
    6280
    30
    £30
    £1,118
    RSI 6 – 17 – 31 < 80/70 = Short Signal

    14/10/2015
    12:18
    £1,118
    22.36
    1
    Short
    FTSE
    6305
    6327.4
    2
    6260
    C
    6280
    25
    £25
    £1,143
    RSI 1 Min > Above 80 = Short

    14/10/2015
    12:18
    £1,143
    22.86
    1
    Short
    FTSE
    6305
    6327.9
    2
    6259
    C
    6280
    25
    £25
    £1,168
    RSI > 90 = Short Trade

    14/10/2015
    13:09
    £1,168
    23.36
    1
    Short
    FTSE
    6314.5
    6337.9
    2
    6268
    C
    6280
    35
    £35
    £1,203
    RSI > 90 = Short Trade

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