Support 6426 6387 6360 Resistance 6444 6454 6510 6540 6551

Good morning. From what I have heard I think this rise has caught the vast majority off guard, myself included as I was expecting yesterday to be more bearish and for the drop off the 6350 level to break through the 6305 level. Markets were fuelled by the hope that the Fed won’t be rushing to raise interest rates yesterday. I still think it will be next year at the earliest. We have tested 6445 overnight which is the 50% retrace of the whole recent high to low, and with the 20 day Bianca channel at 6454 we might see the bears have a go at this level.

US & Asia Overnight from Bloomberg
Asian stocks rose, with the regional benchmark index heading for its biggest weekly advance since December 2011, as U.S. shares rallied after minutes from the Federal Reserve’s latest meeting indicated the central bank won’t rush to raise interest rates. Energy companies led gains as oil headed for its steepest weekly increase since August.

The MSCI Asia Pacific Index climbed 0.7 percent to 132.13 as of 9:00 a.m. in Tokyo, poised for a 4.6 percent rally this week. While Fed officials noted the U.S. economy continued to improve, the committee decided to wait for additional data confirming the outlook for growth, the minutes showed. Officials cited growing risks, mainly from China, while saying they were on track to increase rates this year. Odds of a Fed liftoff in 2015 have fallen below 50 percent, futures data show, after a weaker-than-expected U.S. jobs report last week.

“This looks like a sustainable turnaround,” Michael McCarthy, chief market strategist in Sydney at CMC Markets Plc, said by phone. “Investors have become less pessimistic. Things are definitely not in a strong economic environment but there is an expectation of further central bank support.”

Japan’s Topix index added 1.1 percent. New Zealand’s S&P/NZX 50 Index rose 0.7 percent, and Australia’s S&P/ASX 200 Index advanced 1.1 percent. Markets in South Korea and Taiwan are closed for holidays Friday, while those in China and Hong Kong have yet to start trading.

The Shanghai Composite Index climbed 3 percent on Thursday as trading resumed after a week-long holiday and investors speculated the government will take more steps to boost the world’s second-biggest economy. FTSE China A50 Index futures rose 0.8 percent in most recent trading, while contracts on the Hang Seng China Enterprises Index in Hong Kong added 0.4 percent.

E-mini futures on the Standard & Poor’s 500 Index slipped 0.1 percent on Friday. The underlying equity measure advanced 0.9 percent on Thursday as commodity shares rallied. [Bloomberg]

FTSE Outlook

FTSE 100 Prediction
FTSE 100 Prediction

I have that Friday feeling today, and its not immediately clear where this is going. We have some fairly key resistance at the 6450 area – 6445 is the 50% retrace of the high to low, and we have the top of the 20 day Bianca at 6454. As such I am inclined go for a short at this area for a run down to the 6424 support area, though if the bears really start to go for it then a dip to the pivot at 6387 is possible. The Dow has got back above 17000, so its possible it will push a bit past that now before some other crisis develops to take it back down to 14500 before the year end rally back to 17000+ For the moment the moving averages are all pretty positive so with support at 6425 on the 2 hour chart, as well as the 25ema on the 30minute chart this area might be worth a long and we can see who wins the battle today – bulls or bears!

64 Comments

    1. Nice one Senu, I went out and left scale ups from 50, just missed the boat.
      Looks a bit hungover this morning, doesn’t it?
      How’s our Golden Boy doing this morning, you were shorting were you not, anstel?

      I have no strategy today, just a bit of scalping mainly favouring the short side, currently short at 08 b/e vaguely looking for 6380ish.

      2. Morning Mr Bear (tmfp) yep I’m short from 27.6 oh and I’m long from 38.8 :0) thought we might be in for some mental chess today so I don’t think its time to break my hedge yet,makes it interesting :0)

        1. Lol Mr. Bear’s hibernating atm, too many hunters about.
          Never quite understood this hedge thing, if both positions are the same size, why not call it an 11.2 loss and keep things tidy?
          GL.
          ps stopped the 08 short and went back in short at 08.
          Overtrading? Me?
          Good Luck.

          1. Come on tmfp I don’t do giving up without a big fight,I just had a change of heart last night and wanted to get a good nights sleep so all I have done is press the postpone button,I think there’s a good few points here lurking somewhere but I wanted to get some sleep and be fresh when I try to sniff them out :0)

          3. Sorry tmfp I didn’t think you wanted a proper answer,well here’s the thing, firstly my 11.2 deficit is not a loss in my eyes it was just the cost I was prepared to pay to get some sleep.I think going short is the best option,but it’s just too bloody obvious that after a rise like yesterday it’s going to fall,the market is a tricky little devil and it doesn’t like to give anything away if it can help it so I watched it after midnight and at 12.15 it was looking strong so I hedged then it did a teaser and dropped 10 but the Dow was flatlining pretty much which suggests to me more positive sentiment on the way,sooner or later it’s going to spit it’s dummy out but im thinking its going up first then a drop.

          4. Ok, it was just a simple question.
            If you’ve sold at X and bought at X +11.2 then that’s a loss whether it’s disguised by keeping the two positions open or not, and of course, you pay an extra spread.
            That was all.
            🙂

          5. Tell you what tmfp I will see if I can get my bed and breakfast cost of 11.2 points back with some scalping.Yes it is a loss you are right of course.

  2. Morning Senu,I had a look at 12.15 last night and didn’t like the look of it,I took my stop off and hedged my position,I’m going to play the waiting game but I can still trade around my position if I see anything I like. I think we may have a few surprises in store and I’m in no rush.

      1. The one thing I have learnt is that the biggest moves come when you least expect them.If I get it wrong I get it wrong but I’ll give it a shot.Glad you gained some points Senu all the best and good luck.

  3. Morning All, yep day after FED minutes and Friday another tricky day….do we see morning pull back then afternoon push up, with strong weekly finish? I tried a long 6397, which seems good so far. We tried a long 6424 this morning with Nick, but didn’t work out, I managed to add another position then out BE. GLA

    1. 97’s looking good now mali, I should have taken +10 but was looking for a little more early uncertainty.
      What’s your target, or just sit with it and see how it goes?

    1. Certainly looks that way Jim, air’s a bit thin up here, wouldn’t take much to go sour quickly, but 6550 (as predicted by your truly 🙂 ) isn’t out of the question first.

      What you doing with your short Argyle, still holding?

  6. Morning All..
    I’m cooking something new at the moment ..
    As it stands …I’d be maintaining Short from 6425 – here ( S) 6412 App Stps >6420.
    Using 5 Min Chart

      1. No WSF, I do like Bitcoin though.

        Short at 30, stop 51, limit 6380, off out till this afternoon now, good luck all.

        1. Cheers,well if anyone does or more to the point,is interested in the idea of other stuff as indicators/proxys for sentiment eg Transport sector for the Dow and Copper for the Economy then at the moment re Ftse and the fear vs fear of missing out stuff then HSBA day chart vs the Ftse is worth a look I think especially when it comes to the touch on the July low which HSBA hasnt done yet (544.3 vs 6433 here). HSBA is good to trade and with the China thing I think its chart is interesting at the moment.Only mention it because of the observation about Euro/GBP and the FTSE the other day.

  10. Just thinking …given the “daily range” of FTSE which is about 125 points ATM –
    From last night – possible 6551 – 6303.
    All Sigs on all indicies have turned + but (Albeit not v.convining to me)…

    1. I bet this weekend is full of Experts pulling out old Spike Low charts from T.A books and calling the bottom as in.

        1. My post up above Hugh,think it might have been your comment about Euro/GBP and tfmp’s answer I was thinking of there.Apart from the possible indicator thing at the moment HSBA has a 1/4ly div cycle etc etc and that is why i like it,if I had the money I’d take something like it as a focus.

      1. ” Fiddle in the middle ” …..of the range 6395 – 6440.
        Although the move lower off 6430 might be considered a fail.
        & the bounce off 6415 could be positive.
        So none the wiser !

  15. That’s incorrect I have divided my monetary loss by my position size and it works out I’m down 6.3 points.I had not taken the spread into account.

    1. I’m using the day chart for my Dow Hedge trades like that,a bigger range and a bit more to go either way before I start closing the ones that are left,waiting until I think we have a greater market trend to unwrap it now,so like the sort of Straddle Leeson did with Japan only if I unwrap it and get hit with a surprise like he did I’ll take the hit 🙂 I’m hoping that a trend will appear into year end (up?) that will take the unwrapped and in profit stopped part much further than the spread between it and the position I closed at a Loss.It is actually 2 longs and 2 shorts.Obviously planned to add if the Trend has legs on the same timeframe too.Essentially I am looking to close out and not use it as a shifting range trade anymore and trying to make it a big trade if mkt conditions allow.

      1. Yes it’s quite an interesting way of trading I find,it adds some mental stimulation to just trying to scalp a few here and there.Im all for scalping,quick in an outs 15 or 20 times a day don’t get me wrong but hedges are very useful.I have got myself out of a few tight spots with them,if you hold a position and it goes up or down to the next trading range,say it drops down to say 20 points above a short you got stuck with,and that is repeatedly support,I will go long on a hedge at that bottom support area and try and get the 20 points on the rise then if I’m lucky if it drops back to support I take the 20 point loss and come out at b/e.Sometimes it goes wrong but it works more times than it fails,It’s also good for rolling futures contracts without charges,I do those in separate parts though in case it goes bad.

        1. Hi Anstel – WSF
          – Bit pushed for time ATM – but this is more less how I traded the last couple of years and did pretty well out of it – range bound market – within reason. Just keeping calling “Bank” on significant moves.

    1. Sitting around the top of the megaphone here (5 Mins chart Line up the tops).
      Nearly got an RSI Trio – not quite though…

      But my new recipe that I’m cooking sits Long from the break of 6425.
      This new recipe is supposed to be less time consuming but it’s been anything but that this morning…

        1. Tell you what Hugh,there’s a lot of latent strength lurking all coiled up in that Dow.i think it’s going to get a good shove up this lot,and the higher up it gets the happier I am going to be to close my hedge.But I think it’s time for a little walk so I’m not tempted to bank some blue numbers!! Good luck.

    1. Hi Jim…. Sure – just thinking to myself *!*!* . Just having a look at the daily chart – 6500 area is possibly the inflection point – which broke 19 Aug (TL Res 6475). Maybe we’re establishing a new range for the next couple of months 5900 – 6500.

  18. Hi Hugh, Yes, a pullback, or pause at least, seems likely. But for the moment growth looks pretty strong, despite all the woes! 🙂

  20. For all you astro-traders today’s a Bradley turn date. Just wish I’d listened to the last one which was on 9th June – not exactly a top but we had a hell of decline afterwards. Am expecting some sort of retracement over the next couple of weeks before the next climb to new highs (above today but below this year’s high) around 18th November – the next key Bradley turn date. The dates only have +/- 4 days built into them. So I’m putting my faith in the stars (and some key gaps below that I think will get filled) and will see what happens. Went short at 6417 and was stopped out at break-even on this morning’s rise. Am short again at 6450 though it could go higher. Some very overbought signals on the US indices suggest a day or two pullback before another push higher so will have to see how this affects the FTSE.

    1. The only other things about these Bradley dates is they don’t indicate direction, only a (possible) turn date, so there is always the possibility it’s another turn higher though I hope not …

    2. 6477 is also the 50% retrace of the year’s high/low so probably not a bad area to trial a short.

      1. Thanks,will look that up.The eclipse thing as a turning point seems as reliable as anything else.I Was just trying to fit an EWT count on the daily and came to the same timeframe.It either turns very soon with some drama or its still the 2009 uptrend,sort of this is a). or this is c). or the fall was an a).b).c). 🙂 not very useful that except as a reason to wait a week I suppose.

  22. Ok I have dumped my short for 402.1 for 31.4 pts I’m long now scary was intending to do it the other way!

    1. Sorry ** misleading figure there – FTSE Dec Futures 6370 – should have been 6401 thereabouts

  26. Well placed a cheeky long on the Dow at 79.4 should be able to cope with two 100 pt stop.Im thinking same MO as yday push up after Ftse closes.

  27. Well i was expecting a push up on the Ftse this evening which hasn’t happened really.I have just managed to luckily close my Dow long at a loss of 0.1 point.It was just in profit but that’s slippage for you.Glad to be out of it over weekend.I have been playing around with the long part of my hedge if anyone remembers and to break even on the long position I’m still holding I need 6428.8. That would mean overall I make 31.4 points on the hedge.If I’m lucky enough to close it above 28.8 well that’s more points made on the total of both the short and long side of the hedge.Overall I feel I have traded badly today.but even so as it stands now I’m still in profit on the day.Have a great weekend if anyone’s reading this and GLA.

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