Support 6320 6307 6274 6183 6178 Resistance 6350 6352 6360 6374 6414 6420

Good morning. Turned into a slightly volatile day yesterday with a firm rebuttal of the 6400 level with a drop down to 6320 again. The 1995 S&P short worked well, though in the end closed far too early. Most of that drop down was due to the IMF report on global debt. The International Monetary Fund warned officials to protect their financial systems from possible instability as the Fed prepares to raise interest rates, saying shocks or policy missteps risk derailing the global economy and triggering equity market selloffs. This followed a separate report in which the IMF cut its outlook for global growth this year to 3.1 percent from a July forecast of 3.3 percent.

US & Asia Overnight from Bloomberg
Asian stocks rose for a seventh day, following U.S. shares higher, with Chinese markets set to open after a week-long holiday that saw a global equity rally.

The MSCI Asia Pacific Index gained 0.2 percent to 131.95 as of 9:00 a.m. in Tokyo, heading for an almost seven-week high. Chinese markets, which were at the epicenter of August’s global turmoil, will trade for the first time since Sept. 30. The Hang Seng China Enterprises Index, a gauge of mainland shares traded in Hong Kong, has jumped 11 percent since then, with stocks around the world posting their longest rally since April. Investors are betting the Federal Reserve will keep interest rates near zero for longer, spurring demand for assets that benefit from an environment where borrowing is cheap.

“There’s been a little bit of a relief rally amid speculation the Fed will delay raising rates,” said Tim Schroeders, a portfolio manager who helps oversee about $1 billion in equities at Pengana Capital Ltd. in Melbourne. “I wouldn’t hold my breath that the rally can continue until the end of the year. Ultimately investors will come around and start to realize that the rate increase is being delayed because the economy isn’t that strong.”

Odds of a Fed liftoff in 2015 have fallen below 50 percent after a weaker-than-expected U.S. jobs report last week reduced the case for the Fed to raise interest rates this year.

Japan’s Topix index lost 0.1 percent. South Korea’s Kospi index added 0.5 percent. Australia’s S&P/ASX 200 Index rose 0.9 percent. New Zealand’s S&P/NZX 50 Index was little changed. Markets in China and Hong Kong have yet to open.

H-share Rally
Futures on the H-share gauge slid 0.8 percent in most recent trading after the underlying measure surged 4.7 percent on Wednesday. Contracts on the FTSE China A50 gauge of the mainland’s largest stocks slipped 0.7 percent. Shanghai shares were hovering near their 2015 low before the holidays as mounting signs of a slowdown in China and its potential to spread throughout the world economy fueled a selloff last quarter.

Futures on the Standard & Poor’s 500 Index slipped 0.1 percent on Thursday. The underlying equity measure advanced 0.8 percent on Wednesday as biotechnology companies rebounded and energy shares extended their longest rally since December 2013. The Stoxx Europe 600 Index rose for a fourth day, adding 0.1 percent. [Bloomberg]

FTSE Outlook

FTSE 100 Prediction
FTSE 100 Prediction

The bulls were quite resilient yesterday but I am still feeling bearish, maybe was just 24 hours early but I think we will see some declines today and tomorrow. My 2 hour chart has resistance at 6400, thought he 30min is looking better for initial downside, with the 6350 level being the 25ema and a decent entry. With the pivot here too at 6352 I fell that this is a good level to short from and “shorting the rallies” is a good plan for the next 48 hours. We have China back from their 5 day break today , and the ASX has had a weak session dropping 0.7%. I think the FTSE will have a negative day today as well.

107 Comments

  1. Morning.
    Woke up “sell the rallies” after yesterday’s possible double top and been a nice rsi session so far shorting off 30.
    Third try coming up to break, will wait for 45ish to short again.
    Am thinking 6200’s later.
    Don’t know the thinking behind Nick’s 6307 support but it held ok.

    1. Morning,sounds right to me too.The angle of the climb on the FTSE day chart was what jumped out at me this morning,that and the fact that when I logged in everything was below where it was when I logged out yesterday.BOE minutes at 12 ,ECB at 12.30 and FOMC at 19.00 might be comedy gold.

    2. High 30’s seem to have held third time and the German bulls are currently losing the battle for 10,000, so will see if the nascent up trend around 6318 holds, if not test lows and maybe 6200’s this morning.

      1. EUR/USD – At the top of it’s near term range. Not sure if this might not weighing / containing momentum
        Off out for a bit..:-/

      2. V short term fail to break 26 gave enough pressure for break of trend line and it couldn’t make it back over 18 so shorted there for the re test of low.
        DAX still has 35+ pts to go before testing their equivalent low which would take us to 6290ish, so holding short 20 stop. 6314/18 now resistance on 1 min.

          2. A bit hyperactive this morning, so out for nowt and going for a walk in the sunshine.
            Bears have been temporarily seen off.

        1. Thanks Nick,guess you have different data to Derren,noticed that sometimes the channels are a bit different to his too.I had Bianca when it was a trial with Google (I think) data back in the (ii) Barcap days before it was switched off.

  2. Planned to 9935.5 but closed 9942.2, well got 38 points, what’s more to ask. Thanks to Nick’s arrows today. Plus noticed a pivot, entered a bit late because of school run but still short 9980.2 since 9.31 worked well. I had the temptation to hold till 9905 the next level but decided no thanks, I’m ok to that green line.

      1. More like 10000 again Jack, by the look of things.
        Nice pennant forming, to be resolved before 13.00.

  4. Good Morning all,I just wanted to mention something to tmfp about a comment I made yesterday which could have been interepted as slightly arrogant but it was in no way intended to be. “I’m 15 points behind but calm,it’s not going to kill me is it?.What I meant is that when we start getting negative on positions our natural reaction is to go into fight or flight mode and react emotionally rather than rationally.I’m trying harder than ever to not make decisions emotionally. My thoughts today are to stay out of the market initially,see how high it gets and if I can form an idea on the market range try trading short from as close to 400 as it gets mainly because of the 3000 point or so rise on the A50. That’s my plan for now but I’m staying flexible. good luck everybody.

  6. Lovely walk in the sunshine, autumn colours and back to 6342 where I left, although via 62.
    Looking at a little 42 long 8 pt stop.

    Hey anstel, no worries. It’s the classic dilemma for us all: when is it holding your nerve, and when it is denying that you were wrong?

    GL.

    1. Cheers tmfp glad I got that cleared up I am long from 47 just a little one because I liked the look off that little pullback.

      1. Fast as a fast thing…. short 57 covered 47 +10 in about 30 seconds.
        Moral: go for a walk more often
        🙂

          2. Not without the DOW
            Just about to post
            out +15 @70
            Then realised hadn’t said I bought at 55 lol
            Bit of a pull back here, anyone fancy it?
            I think DAX will do 10000 after a breather.

      1. Well the BOE signalled keeping rates low and to be honest there’s not much else they can do.they need low rates and 2% plus inflation combined to try and keep kicking the can lol !

  12. Just going to try one more time long at 59.4, looks a bit dodgy this time but Im going to chance it.

    1. I’m watching 16840 area on the Dow,but that’s only because I have Dow trades and from 13.30 it seems to have it’s own voice.

      1. It would do, that’s when their pre market opening hour starts, like our 7am.
        What’s you thoughts on it WSF?

        1. Made the mistake of reading about the deals going on and the below expected earnings and etc etc,so dont have a clear idea anymore 🙂 just want it away from this area so I can resolve some open positions.
          I’m 14 points down on the day including overnight interest so I suspect it will be a dull day through to the Fed and then get duller 🙂

  17. Just wondering what to expect from the DOW, any ideas?
    Another try at 17000, a fail and the start of a double top at 16950ish or steam straight through to 17060 or overbought pullback?

      1. Bad entry, so cheated a bit on the 3 candle stop, out for -5 on the way down.
        Can’t see the upside potential atm, so neutral.

    2. My guess tmfp and it’s only my feel for it but I think we will get a push up on the Dow to + or – about 25 points either side of 17000 then a drop back to 16700 ish. Just what I think and how I aim to place my trades.

      1. Yes quite likely, but if they’re not strong out of the blocks at 14.30 I think there could be downside.

        1. Just as a matter of interest, why 76?
          Conventional logic would suggest that getting to 76 would be a break through into ‘clear air’ and would probably go on to 6400.
          You’re on fire atm and good luck to you, just curious.

          1. Not a bloody clue tmfp I’m just bluffing my way :0) to the untrained it might even appear I know what I’m doing :0)

        2. Actually tmfp to answer your question about why 76, well if it gets there the market is offering me a reasonable 20 points x my position size and it’s worth just taking it. I have been greedy many times before and lost so I’m happy with smaller gains. At the end of the day it’s not about us being exactly right and nailing the whole move, it’s about us increasing our account balance,I might be wrong but that’s my current thinking good luck buddy.

          2. Having said that tmfp it’s looking lively and that clear air you talked about is like a carrot on a stick…oh dear!

          3. Yeah but it’s got to reach the clear air first.
            That’s why areas like 72-74 here today which have been tested and held a number of times are known as “resistance”.

        3. When you have a nice potential headline in the media of “Dow hits 17000 again” I don’t pay much attention to resistance levels it’s all about headlines in the media in my view.

  20. Nice little dip there on the Dow to take out the trailing stops before the final push to 17000 area lol

    1. Dow 2hrs — Looking a bit more promising now, ⇒ 17000? (Will the Dow be hostage to Chinese confusion?)

  25. Hi All,
    Same view as Anstel for me today, thinking DOW hitting close to 17000 or there and then later down, spike up on FED. Anyway usually avoid these FED days as it gets volatile – I usually get it wrong…so an evening to watch for me…GLA

  26. Very often we get a rise on the Ftse after it closers at 4.30 so if anyone’s going short just bear that in mind chaps

  27. Ok chaps out at 79.5 for 23.5 points looking for short entry if Dow hits 17000 area going for a bite to eat.

      1. Sorry WSF I missed your comment,I’m not sure but I wouldn’t have thought so at the time you posted your comment.Good luck.

      1. I hope you get some profit to Senu.But who knows what’s in store for us.If we don’t get any profit though it’s certainly not from a lack of trying.very best of luck,catch you tomorrow,good night.

  36. Anyway Senu where’s the rest of the troups ? It looks like it’s just us manning the trenches on the late shift :0)

      1. Can’t get the staff these days WSF :0) might add at 6450 if this crazy market gets there!!!!

        1. I’m just scalping,think they will try to print a U.S close over 17000 now and then try to repeat that on Friday.

          1. Yes I think you are dead right,and going short can be a very dangerous pastime but it’s all part of the game, hope you get some blue numbers on your screen best of luck.

  37. Cheers you too.Tempted to look at ASX later but will try and resist that and call this the EOD.Goodnight.

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