6166 6230 resistance Asia weak but FTSE bullish

Support 6130 6128 6102 6092 6012 6000
Resistance 6146 6164 6166 6213 6236
Good morning. A great Dax trade yesterday offset the rather lacklustre bounce for the FTSE at 6120 in the end, while gold fell steadily throughout the day, ending up 2% down. The FTSE slowly drifted down towards the pivot as commodity prices have weakened once again, Rio Tinto plc was down 5% at one point yesterday. Worries over global growth have once again weighed on markets as the FTSE has fallen from 6430 to this 6130 level.

US & Asia Overnight from Bloomberg
Japanese stocks rallied as the yen sank to its weakest level of the month, while shares of Asian commodity producers slumped following slides in oil and metals prices. The Philippine peso rose the most since March after an anti-establishment candidate claimed victory in a presidential election.

The Topix index gained for a second day in Tokyo as the yen added to Monday’s 1.1 percent tumble. Mining and energy companies were the biggest losers on the MSCI Asia Pacific Index after a Bloomberg measure of raw-materials prices dropped on Monday by the most since March. Crude oil traded below $44 a barrel, while nickel rebounded from its steepest slide in two months as Japan’s biggest supplier forecast a widening shortage. Malaysia’s ringgit and South Korea’s won were the biggest losers against the dollar among major currencies, while the peso was Asia’s best performer.

“Worries about global growth have re-emerged,” said Shane Oliver, head of investment strategy at Sydney-based AMP Capital Investors Ltd., which oversees about $120 billion.

“There could be further weakness in the market. Recent news out of China hasn’t helped sentiment.”

More than $1.5 trillion has been wiped off the value of global stocks so far in May as data pointed to subdued growth in the world’s biggest economies. The Bloomberg Commodity Index dropped on five of the last six trading days, after rallying in April by the most since 2010. Changing winds eased the threat of wildfires in Canada, after supporting oil gains on prospects of a drop in world supply.

China’s consumer-price inflation held at 2.3 percent in April, in line with expectations, and declines in producer prices moderated, data showed Tuesday. Industrial output figures are due from France, Germany and Italy while the U.K. is scheduled to report on trade. Credit Suisse Group AG is projected by analysts to report a second consecutive quarterly loss, and earnings announcements are also expected from companies including ING Groep NV, Nokia OYJ and Walt Disney Co.

Stocks
The Topix rose 2.2 percent as of 1:19 p.m. Tokyo time, after climbing on Monday for the first time in two weeks. Chinese stocks in Hong Kong fell for a seventh day, their longest losing streak this year.

“The CPI and PPI were OK but recent economic data hasn’t been as strong as March,” said Linus Yip, a Hong Kong-based strategist at First Shanghai Securities Ltd. “Although markets have already dropped a lot, we need more stimulus for investors to buy on dips.”
The Philippine Stock Exchange PSEi Index rose 0.5 percent after Rodrigo Duterte — a mayor who has tapped into middle-class frustrations about rising crime and inefficient public services in the Southeast Asian nation — claimed victory in the presidential election.

BHP Billiton Ltd and Rio Tinto Ltd. slid more than 4 percent in Sydney. Lenovo Group Ltd. dropped to a four-year low in Hong Kong after Morgan Stanley and HSBC Holdings Plc cut their recommendations on the stock.

Futures on the S&P 500 rose 0.2 percent, while contracts on the U.K.’s FTSE 100 Index gained 0.4 percent.

Currencies
The Bloomberg Dollar Spot Index was little changed, after a five-day winning streak that marked its strongest run of gains in almost a year. The ringgit dropped 1.1 percent versus the greenback — the biggest loss among 31 major currencies — as lower oil prices dimmed prospects for Malaysian exports ahead of a deadline for a bond interest payment by a state investment company that defaulted last month. South Korea’s won fell 0.7 percent and the Philippine peso strengthened 0.4 percent.

The yen sank as much as 0.5 percent to 108.86 per dollar, its weakest level since April 28, while the euro was little changed following five days of losses.

The kiwi dropped 0.3 percent, falling for a third day after New Zealand’s Finance Minister Bill English indicated he expects the country’s central bank to signal a plan on dealing with the housing market in a report on financial stability due Wednesday.

Commodities
West Texas Intermediate crude slipped 0.2 percent to $43.36 a barrel, following Monday’s 2.7 percent slide. Canadian producers have begun restarting operations after wildfires led to cuts equivalent to about 40 percent of their oil-sands output, based on IHS Energy estimates.

Nickel rallied 1.2 percent in London, after sliding more than 5 percent on Monday. The market will face a shortage this year as Chinese smelters are joined by other producers in paring output, according to Sumitomo Metal Mining Co.

Bonds
Australia’s three-year bond yield dropped as low as 1.53 percent, a record, following gains in U.S. Treasuries. The latter have handed investors a 3.5 percent return since the end of December as traders pared bets that the Federal Reserve will raise interest rates this year. There’s a 45 percent chance of a hike in 2016, down from 93 percent at the start of the year, Fed Funds futures show. [Bloomberg]

FTSE 100 Outlook and Prediction

FTSE 100 Prediction
FTSE 100 Prediction

For today we have the pivot for initial support at the 6130 level and I feel this may well hold, so as such its probably worth a small long for a rise to test the top of the 10 day Bianca at 6166. The 2 hour chart is now showing some bullish signs with support at the 6100 area – we have the green coral here and also the Hull 100 MA is 6093 support. The bears will need to break this level if they are to reach 6000. However, I think the upside might be limited as we are nearing the top of the 10 day channels, and also have the Raff at 6163, as well as a bearish moving average picture on the daily with resistance at 6213 and 6236. Don’t fall in love with the upside as they say, so if we were to get 6236 then that area looks to be a good swing shorting area. So for today, weak bull I feel, with a bearish move to come again soon, from either the 6166 or 6230 areas….

88 Comments

  1. Morning fellas,
    Haven’t posted any trades recently, hope you guys are doing well!
    Nice top formation on FTSE so extra extra heavy short at 6172 S20 will hold this for an hour or two if don’t get stopped out.
    GL all 🙂

  2. Morning all, let a bit go at 50 just before the open and a bit more at 60. It might have stopped for the time being but would look to replace if it comes down to 40 ish or run the balance of the long and see if it’ll get through 200 this week.
    Good luck all.

      1. Hey chippy hope you doing good..What you think after we reach 200 ,….for me I guess it will go 200+ and then everybody will start shorting and it will keep on going !! Fancy land but I am long for the day !! 🙂 GL

        1. Hi Sharma, I don’t think we’ll get 200 today but might sometime this week. I sort of think that we could quite easily see 6300 in the near-ish future. I don’t think we’ll see anything below 6000 so my “step up long” was/is simply a 50/50 gamble!
          If I get 200 for what I’ve still got running I’ll be a happy boy and will probably be sitting on my hands for a week or 2.

  3. Morning all
    I’m still alive too, hope you’re all trading well.
    Was thinking we might reach 6198 as a 38.2 retrace of the previous bearish move.
    I’m long for a bounce from 6160, but it’s certainly under pressure if that goes. Nick 6166 seems to be constraining the up move at the moment. Wonder if we might see a retest of the morning lows.
    GL

  4. Morning Guys !! Bargain Buying yesterday was good plan …woke up two trades both 60 points up !! want to hold it but let someone else earn as well. gd luck all

  5. Hello chaps, don’t know quite what we are doing up here on the most tenuous of justifications if Nick’s retweet of the Torygraph is anything to go by.
    It does seem reasonably comfortable despite the big cash up gap and I guess the bulls will want to try and crack the 78 area, both yesterday’s and today’s high but I’d be surprised if they make it this morning, although there does seem a bit of underlying strength on the FTSE.
    I picked up a bit of long on rsi in the 50’s letting it go soon but no rush.

        1. Even If I repeat your trade I get some blue ..Lol Shorted 77 closed for +10.. Thanks TMPF 🙂

        2. and +18 on the rest and a small long at 62 maybe have another crack at it but just playing with a bit of profit

  6. Forgot to admit that my crack habit (dow binary) cost me 20 points last night. Could someone come round to my house around 8.45 each evening and take my i pad and phone away from me please?
    FTSE – seems to me that it could have a nice little run, got a manually chasing stop on whats left of my long from yesterday. Also still got limit puchases at 50, 30, 00 etc. Good luck.

    1. Parental lock, that’s what you need. 🙂
      Good luck with the long, I’d be tempted to forget about the 50 one, if we get there there’s no real tech support and we’ll probably have a look at 30 anyway.

      1. Parental lock, good idea but might turn off some other specialist sites.
        Yep, just had a look, pulled the 50 limit and doubled the 30. Thanks for pointing it out.

  7. The germans appear to be waking from their hour long slumber with a go at new highs looking likely. No response here so far, 70+ the first target. If the DAX doesn’t follow through, then a break of 160 may develop a bit of downside momentum.

    1. the 3 min 10 rsi on ftse hasn’t broken 40 all morning, just had another go, usually a sign that BTD is the plan but a break of it could develop quickly.
      Right now that would probably coincide with breaking 58/60 properly.

      1. That was just waiting to happen, out of patient short at 44 looking for a bounce and reshort

          1. still waiting, should hold 30 but I’m not so sure
            What a cr*p early profit take in the middle of nowhere 🙁

          3. It’s called scaling against the trend by averaging. I do it sometimes and get out like you did most of the times, but sometimes it costs me a lot. Theoretically you should have closed your first trade not lower than 6153-152 at 11.58 You could see it broke the support then and there was no point to add up.

        2. Thanks JACK 2 for your words, I had a position @ 60 when it rose to 64 I closed half of it and was wanting to build a long around 30-40. Dun know why I added @44 but that was only for couple of points as i expected to rebound at least few. otherwise my intended entry was at 30 which I did. Lesson learnt 🙂

  9. Just logged in and got some at 30, lovely job, don’t think I’ll get any at 00 today. Don’t know what did that but happy days!

          1. I’d say that 58/60 is now quite strong resistance, we may get there bu it will need a good DOW to help.
            I get the feeling that you are a bit more long than you want to be around 37 average and I would be tempted to slim it down if you get a chance around break even.
            Don’t get into the habit of putting stuff that doesn’t work out immediately “into a box” solely on the basis that you think it will come right.
            You might be able to get away with that in a ranging market like this is at the moment, but the day will come when it will break out the wrong way and be expensive.
            Re your stop at 6100…do you think that a good placement? It’s a fairly important support area despite being temporarily broken to 60 where it quickly recovered from. GL.

          2. Thanks Tmpf for your wondeful words of advice! As I posted yesterday I have been very strict with my stops! But being a novice trader I am not to good as yourself picking up the exact moment for the trade so i compensate with my second or third position but for them I am always strict with stops.!! ( if I make any sense) Second I know 6100 is not good stop as it can go there quite easily and rebound but honestly I like to put some stop in case it goes utterly south/north against my positions. But depending on the momentum (if thats the right word ) I always close early . AS you can see from all my post. I remember reading somewhere one should put stop even if you dun know the basics. 🙂 but once again thansk for your advice.

          3. Another thing my positions size are not always same so I play with sizes depending upon where I want the average to be 😛

        2. I think that’s a PIA pop up from early this morning sharma.

          I’m all square and awaiting developments as they say at this level 32, wouldn’t long it personally but that may have been a 20 pt overshoot on support, unconvinced.
          We were around 20 when the DOW closed last night and wouldn’t want to pay more than that. As I said first thing, it’s a mystery to me why we were in the 6160+ zone in the first place.

          1. signal was reshown at 12:06 pm !! I am just guessing could it be a case like couple of weeks ago where it rose from 180 to 300 simply !!

          3. Sorry, I hadn’t seen the posts where you got out without too much damage, good escape..
            Doubling up losing positions is brave/dangerous as we all know, probably one of the main ways most people blow up accounts, the day when it just keeps going.

  10. Needs to push on above 30 and hold for this to be the morning lows
    Dumped an 18 bargain at 31, don’t think its all over yet

      1. Thanks Jack. Yes, a good morning so far apart from not holding my shorts longer but that’s nothing new.
        Just thinking about what to expect from the DOW. I suppose opening around 17770 would be in line, support around 700 and resistance at 900.
        I can’t see them being hugely bullish like we were on that pretty sketchy vague Asian strength reasoning.
        Just been looking at the China 300 chart, no support there till 2600 lows, that’s 12% away. Nikkei looks a bit better, but I don’t get this Asia strength thing.

        1. And Dow was very bullish. I just don’t understand why Dax is sitting and not moving? Had to close my long. It isn’t progressing at all.

    2. If I may ask , Can you explain while Long entry RSI is good indicator, but often it stays under red (20) and keeps on going down, so when one should actually decide to go in ? Same for Short

      1. It depends on the context, extreme rsi is only one factor and works best in markets which have some flow and momentum.
        One example from this morning, the short at 80 was a combination of very overbought rsi and expected resistance from the previous highs.
        Also later a “how not to” example, when I covered my 58 short at 44 solely on the oversold rsi with no other reason and it turned out to be too early.

        2. Hi Chaps,
          tmfp – It’s fair comment to say that 6144 was not a good entry in hindsight, but to be fair, it was perfectly fine (& as good as any) ..I think a good a example of “how not to” …. would be not following through on the 12:21pm (2nd) dip (about 6116) . Consistency & follow through 🙂

          1. Hi Hugh, I did in fact buy that at 18. I stopped cramming the page with useless late entry posts and sometimes the old fingers are a bit too busy.
            Because of my short bias in everything, I’ve been trying to work out exactly how my approach to oversold and overbought rsi differs, it does, but obviously logically it shouldn’t.
            Also of course, there is a difference between a trade that takes a profit and one that is a new position, although again, there shouldn’t be logically.

  11. Just had a look at Nick’s morning missive, great arrows, bang on Nick, magic. I should have looked earlier!
    tmfp, thanks for the heads up to skip the 50 long and I understand what you mean about 00 but am going to leave that one there.
    Good luck boys and girls

  13. I Think I m done for the day. 150 +pips. Call It luck or hardwork doesnt mattter 🙂 .. lol . Just wanted to ask if anybody from here will be attendng IG Seminar tomorrow in london?

    1. And…having listened to tmfp for the entry into that long I’m going to pre-empt a berating from him for not listening some months ago….I’ve been buying single stocks again, specifically banks, specifically HSBC. I know, I know, they are all technically bust, none of them can cover a divi, the world is going to a ball of chalk etc etc!

    2. Nice one matey, yeah I think that 58/60 zone might take a bit of cracking but nervous of another stab at 900 from the DOW.
      As for buying banks…..GL 😉

      1. Ha ha or LOL as you modern types say! Anyway, what’s the downside…..oh yes, 433 points!
        Yes, it does look like it’ll be a bit bouncy from 60 but I really can’t see it getting down below 6000 so, on a serious note, what is the downside?!

        1. It’s DOW dependent really. They’re obviously looking pretty bullet proof, 2400 pt rally with a 600 pt pull back is not really something to pick tops of.
          But technically on FTSE, there’s not much support below 6060 and who knows how high the DOW would have to go for us to make new highs, so trading it like you are as opposed to marrying longs looks the best approach. Buy the weakness, sell the strength my mantra.

          1. I’m also intrigued with the dow/ftse arb. Going back in mists of the past the difference was no where near the 11700 odd even at the top, this time last year so I have a sort of mistrust of the dow at this level and a penchant for ftse. As you say, pick a bit, nick a bit, bugger off home – there are many far cleverer than me.

        1. Hmm sort of see what you mean but completely conversely I’ve just closed all long (FTSE not HSBC!) at 55

          1. It’s only me playing head games really chippy, trading off the one second chart, although I can sort of see a pop into the 60’s before the close.

  18. Afternoon all,see it moved well today,global financial system is no match for Sod’s laws and cycles, R3 on the Dow.I seem to have missed all of Tuesday already. 🙁

  19. Just shorted FTSE Dow difference at 11690, probably should have waited for a bit more as they are bound to give dow a push through the next big figure!

  21. hi folks where do you get your info from too find out what the div payments will be indices?

  22. Evening all just closed down all my Ftse longs from tday and yday points are……..

    Bought Ftse 6161.5 …sold…..6167.1….. +5.6pts
    6159.1….sold…..6167.5……+8.4pts
    6156…….sold…..6167.4….+11.4pts
    6156…….sold…..6167.1….+11.1pts
    6151…….sold…..6167.1….+16.1pts
    6143…….sold…..6167.4….+24.4pts
    6132…….sold…..6165.4….+33.4pts
    6117.5….sold…..6165.6….+48.1 pts

    Well that’s me for today…..I can sleep easy now…..many thanks to chippy and others for helping me with my taking profit problem….it’s still there but I’m working on it…..Good night all and good luck…….

    1. Longed at 45 and 50 too….out at 50.7 on 42 for+7.9pts the 45 at 53.7 +8.7pts and 50 at 54.9 for +4.9 pts…..cup of tea now :0)

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