6164, 6145, 6070, 5977 5909 Support, 6183, 6226, 6255, 6280 Resistance

Good morning. Well the 6276 short worked rather well, running in the end all the way to the target at 6070. Unfortunately I had the long order set at 6070 so it just missed, the spread scuppering it! Still, rise back it did, hitting 6225… volatile eh! Fear and greed in full effect, with one of the Fed members saying that QE shouldn’t be tapered anymore giving the bulls some hope, and the US data out yesterday was not actually too bad. It nearly got drowned out in a sea of red at one point though. I might be bold here and say that I don’t think we are far off a decent rebound. I have put more support and resistance levels in the headline as with the volatility it could all of them!

Asia Overnight from Bloomberg
Asian stocks rose from a six-month low after a Federal Reserve official said the central bank should consider delaying the end of bond purchases and U.S. data eased concern over the global economy.

The MSCI Asia Pacific Index (MXAP)climbed 0.1 percent to 134.93 as of 9:01 a.m. in Tokyo after closing yesterday at the lowest since March 25. The gauge is heading for a sixth straight weekly decline as faltering recoveries in China and Europe spark concern global economic growth will slow and the Fed considers when to raise interest rates.

“Markets in Europe, Australia and Japan are looking attractive,” said Steven Milch, Sydney-based chief economist at Suncorp Group Ltd. “I don’t think the fundamental picture has changed significantly. U.S. data overnight was pretty good. The Fed needs to balance what is clearly a strong economy against some of this financial market volatility.”

Futures on the Standard & Poor’s 500 Index added 0.3 percent. The gauge was little changed yesterday after erasing a drop of as much as 1.5 percent.

St. Louis Fed Bank President James Bullard said the central bank should consider delaying the end of its bond buying to halt the decline in inflation expectations. Reports yesterday showed production at U.S. factories rebounded, claims for jobless benefits fell to a 14-year low and households held the most optimistic views in two years, signs the world’s largest economy is overcoming a global slowdown.

“The Bullard comments were a short-term shot of adrenaline,” Chad Morganlander, a money manager at St. Louis-based Stifel Nicolaus & Co., which oversees about $160 billion, said in a telephone interview. “The U.S. economy is doing quite well, yet there’s overall concern that the euro zone is falling into the abyss.”

European Slump
European stocks fell to this year’s low yesterday, with the benchmark index posting its longest slump in 11 years, as concern grew that a financial crisis is returning to the region’s so-called peripheral nations. Even so, the Stoxx Europe 600 Index trimmed a decline of as much as 2.9 percent after Bullard’s comments and ended the day down 0.4 percent.

Japan’s Topix index increased 0.1 percent today as the yen held declines against the dollar. South Korea’s Kospi index gained 0.2 percent. New Zealand’s NZX 50 Index climbed 0.3 percent. Australia’s S&P/ASX 200 (AS51) Index added 0.3 percent. Markets in China and Hong Konghave yet to open.

Student leaders of Hong Kong’s protests for democracy agreed to talks proposed by Chief Executive Leung Chun-ying while vowing to remain in the streets. The protesters, whose numbers have swelled to as many as 200,000 people in the past three weeks, are demanding that Chinareverse a ruling that candidates for the election of Leung’s successor in 2017 be vetted by a committee. Leung said yesterday that the decision wasn’t negotiable.

FTSE Outlook

FTSE 100 Prediction
FTSE 100 Prediction

So, here we are Friday after a rather busy week. If you have made good gains this week I’d be inclined to ignore it for today and just let it do its thing, and return next week. We have a fairly decent channel in plain on the 30 minute chart, the top of which I think will get tested of the bulls can break the pivot and also get over yesterdays high at 6225. The top of that channel is 6255, and with the 30minute coral green for the first time since Wednesday (suggesting an upward trend), we might get an initial dip and rise. We are just above the Bianca channels which are showing support at 6165 for the 20 day and 6145 for the 10day, so split the difference and try a long at 6155, stop 6140 for a run to 6255. We also have the 200ema on the 30min at that level adding to the resistance. If it breaks 6265 then 6280 is next, a move above that would put the bulls back in control for a push to 6400. Yesterday low at 6070 is tyne line in the sand support wise, if the bottom of those Bianca channels break, with the bottom of the 10 day Bianca at 5977 the next level of note. If that breaks then hello 5900.

57 Comments

  3. I’ve been watching. With disbelief really. Whats sending it up? Did the market not rise on QE news yesterday. Also has everyone really fallen for that?!

    The market will still be volatile and hopes will often be dashed by big swings down after rallies. So short @60.

  5. Nick, dead funny that vid, made my morning. Taking your advice and taking a break today from all the fun.

  6. The backtest I am currently working on stopped running in ProRealTime/IG yesterday — a great birthday present! There’s nothing wrong with the programme; it continues to run perfectly in the free, end-of-day version of ProRealTime. I have offered to supply the code to IG for testing. Backtests less demanding of computing resource are running fine, so I am a mite suspicious. In the meantime, I’m falling back on an earlier system which is a reasonable performer. It gave a buy signal @ 6190 this morning and has just produced a sell @ 6248.

  11. Btfd(buy the f…dip) certainly did those hedge funds and those going long no favours, best to see where the wind blows, nevertheless will try go long for long term before earning reports start coming out…
    IMO more downside to come with so many buyers jumping in now.

          1. Not much to worry about i don’t think Si. Still lots and lots of bad news among 1 small bit of good. It’s not even good news. It was just a comment which has bought hope. The fear will soon come back.
            Yanks can be a bit thick though…

    1. Good point Senu. Still think short term hope though and Yellen will say they’ll do no such thing. Short @65 @80 short again @00 or close 1@50.

  18. Hi Guys

    Not trading today. Busy.
    As it is at 6280 – Thought I’d post this May help
    1st Trade was 6193 Buy – target 6280 ( T-2 = 6337 )
    Not sure whether it can get there !! Not following it

      1. it always gives up 50-60 when it has gone up 250 plus at the end,, read this once and followed it
        and it seems to work

        1. Haha don’t worry I didn’t! Made £600 at £30 per point on that drop before it rallied again. Monday morning awaits now…

  34. Hi old chaps

    How are things doing ?
    A bull run till end of October ?

    Javed how is your sentiment ?

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