6200 yet again… 6250 and 6160 levels to watch. Asia rallies

Support 6186 6175 6159 6134 6098 6081 6079
Resistance 6204 6225 6230 6239 6241 6252
Good morning. I hope you had a good weekend. The FTSE has stayed around the 6200 level with a slight dip down to 6175 daily pivot overnight and bounced back, so will today be the day that the bulls can hold above 6200? News overnight saw China’s consumer prices remain buoyant last month on surging food prices and factory-gate deflation moderated. The consumer-price index was at 2.3 percent in March from a year earlier, matching February’s level, as food prices jumped 7.6 percent. Producer price declines narrowed to 4.3 percent from a drop of 4.9 percent in February, and posted the first month-on-month increase since 2013.

US & Asia Overnight from Bloomberg

  • Japan’s stocks retreat as currency advances for seventh day
  • Gold climbs to three-week high as oil near $40 boosts ringgit

Stocks and currencies rallied in Asia excluding Japan while copper prices advanced as Chinese inflation data pointed to a pick-up in industrial demand in the world’s second-largest economy.

The Shanghai Composite Index rebounded from a one-week low as a report showed producer prices increased month-on-month for the first time since September 2013. U.S. oil topping $40 a barrel for the first time this month boosted Asian energy stocks and the Malaysian ringgit, while Japanese shares retreated as the yen headed for its longest winning streak since 2012. Copper rose from its lowest close since February, gold climbed to a three-week high and wheat extended declines.

“The producer-price index number has delivered a signal that the economy is picking up,” said Wu Kan, a fund manager at JK Life Insurance in Shanghai.

Concern about the health of China’s economy drove a January stocks selloff that erased some $7 trillion of market value worldwide and Monday’s inflation figures are helping restore confidence at the same time as a rebound in oil prices supports global equities. Shares are trading the most in sync with crude since June 2013 in the run-up to an April 17 meeting at which major oil producers including Russia and Saudi Arabia are set to discuss a production freeze.

The World Bank trimmed its 2016 economic growth outlook for developing East Asia and Pacific countries to 6.3 percent from 6.4 percent on Monday, while acknowledging that the region is faring relatively well despite tough global conditions. Central bankers and finance ministers will gather this week in Washington for spring meetings of the Washington-based lender and the International Monetary Fund, as well as a Group of 20 session.

Stocks
An MSCI gauge tracking Asia-Pacific stocks outside of Japan gained 0.3 percent as of 12:52 p.m. Hong Kong time, led by gains in energy companies and raw-materials producers. The Shanghai Composite Index rallied 1.8 percent as Baoshan Iron & Steel Co. and Wuhan Iron & Steel Co. jumped more than 7 percent.

China’s producer prices rose 0.5 percent in March from February and were down 4.3 percent from a year earlier. The year-on-year decline was less than the prior month’s 4.9 percent slide and the 4.6 percent drop forecast in a Bloomberg survey.

Exporters and banks led a 1.1 percent loss in Japan’s Topix, dragging the gauge toward a two-month low. Foreign investors pulled funds from Tokyo’s stock market in the 13 weeks through April 1, dumping $46 billion of equities, as economic reports deteriorated and a resurgent yen pressured exporters.

“Yen strength is really hurting at the moment,” Steve Brice, chief investment strategist at Standard Chartered Bank, told Bloomberg TV in Singapore. “The extent of the strength we’ve seen has surprised pretty much everybody.”

Futures on the Standard & Poor’s 500 Index declined 0.1 percent, while contracts on the U.K.’s FTSE 100 Index declined 0.2 percent.

Currencies
The Bloomberg-JPMorgan Asia Dollar Index, which tracks Asia’s 10 most-used currencies excluding the yen, was headed for its highest close in five months. South Korea’s won strengthened 0.7 percent versus the dollar, the best performance among major currencies, and the increase in oil prices helped lift the ringgit by 0.5 percent. Malaysia is Asia’s only major net exporter of crude.

ING Groep NV and Commonwealth Bank of Australia — the most-accurate forecasters of Asian exchange rates for the last quarter — predict at least seven of 10 emerging-market currencies in the region will appreciate by year-end.

The yen advanced 0.2 percent, climbing for a seventh straight day versus the greenback amid a surge in bullish bets on the currency. Chief Cabinet Secretary Yoshihide Suga repeated that officials are watching the foreign-exchange market “with vigilance,” and will take appropriate action if necessary. Deutsche Bank AG and Bank of Singapore Ltd. said the yen remains at or below fair value.

“The yen is nowhere near overvalued,” making it hard to justify intervention, said Sim Moh Siong, a foreign-exchange strategist at Bank of Singapore. “Even though the yen has moved quite substantially against the dollar, you look at yen relative to euro and other currencies it hasn’t really strengthened all that much.”

Commodities
Oil rose 0.1 percent to $39.76 a barrel in New York, after surging 6.6 percent on Friday, and earlier traded above $40 for the first time this month. The jump in prices at the end of last week was spurred by data showing an unexpected drop in U.S. stockpiles and a decline in the number of active rigs in the nation. Venezuela said the first step at the April 17 meeting in Doha between suppliers including Saudi Arabia should be to cap production.

“The market has positive momentum, so there is a potential for oil to test the highs we saw a few weeks ago,” said Michael McCarthy, chief strategist at CMC Markets in Sydney. “Some sort of supply agreement in Doha seems extremely unlikely. Even if a deal were announced, the market will be extremely skeptical of any compliance.”

Gold climbed 0.9 percent to $1,252.28 an ounce, set for the highest close since March 18. Copper advanced 1 percent on the London Metal Exchange, while tin and zinc added 1.2 percent.

The monthly increase in China’s producer prices is “a sign of a pickup in industrial demand, supporting metals prices,” said Jia Zheng, chief metals analyst at East Asia Futures Co.

Wheat in Chicago fell 1.1 percent, extending last week’s 3.3 percent decline. [Bloomberg]

FTSE 100 Outlook and Prediction

FTSE 100 Prediction
FTSE 100 Prediction

We had an overnight dip to the pivot at 6175 and that has held on the first test but if we test it later and break through then I expect us to dip down towards S1 at 6134, with a pause (and possible hold) at 6160. However, initially today I am feeling rather hopeful that the 6200 level is going to hold for a bit now and we rise towards the top of the Bianca channels at the 6250 level this morning. Its been a funny few sessions, with the bears failing to build on sell offs and the bulls failing to build on repeated tests of 6200. If we do rise this morning then we have the Bianca resistance at 6250ish for both channels, as well as the 10 day Raff at 6240 as well. Should the bulls really push on and through these then 6265 is the top of the 20 day Raff and a break through that on the first test for a while is unlikely, so I would be looking at that capping any exuberant rises today. So, generally positive today, 6160 and 6135 for support, 6250 and 6265 for resistance.

63 Comments

  2. Morning, yup still here.
    Funny old thing, the mind. I was quietly browsing charts and stuff on Sunday and couldn’t get out of my head the notion for 6250 this morning.
    Nothing much technically to justify it, we’ve looked strong around the higher part of this range many times before, and weak around the lows.
    A right old mental tussle went on, and I ended up posting on Friday’s page here my thoughts to see how ridiculous they looked in print.
    Anyway, I bought pre market as I said at 90, 20 pt stop and immediate weakness, lol.
    We got to 80…75…70, £500 down at 08.10 Monday, great start to the week 🙁 and I thought of inoodle’s faux pas, doubling up a losing position, so it was a moment of clarity, do what you say or do what you think?
    I binned the stop and doubled at 68….
    Bad bad trading, now average long 84 showing +25 and all signs of “intuition” being likely to be proved right.
    The moral is?

  4. Morning All,
    Very happy this morning as my long order at 65 triggered and all out now at 6222.
    Now short at 22 S15

  5. Hahaha I’m also narrowly avoiding a meltdown already. Caught out by strength of up move

  6. Morning lads I’ve got three longs on Ftse …..just closed my first from 84 at 25.9 for plus 31.9 nice was medium size ……two more Ftse hooks looking for a good nibble….good luck lads…

    1. Might have to turn some attention to the Dax as well……must make some hay while the sun is shining….remember anstel…..take the money…take the money…thief in the night…….be looking for the thief in the night.

  7. This is probably the first time, I traded with PIA signals on IG as I had no clue where the markets were going.
    PIA signals were long at 65 with 25pt Stop and target was 6235, it’s so weird that FTSE high for this morning is 6231.1!!!

        1. Thanks tmfp 🙂
          Another wave of buyers now, I have put a sell order at 6230 S15 for now and just shorted 14 S8!

    1. I think/hope you’ll probably be ok when the DOW rides to its traditional rescue.
      I still have half my early long, looking for a test of the highs again, another go at 17700+ would get us close.

      2. We seems to like following the DOW down more than up.
        I picked up a bit more at 200, but am not convinced even if the US goes to da moon that we will see our highs again before our close, so dumped that at 08 and selling into further rallies (only profittaking though).

  10. guys just to let know that i am killing it today………on my demo account!
    flips sake.

  11. Let’s see how far this rally goes, could be a push from the DOW coming up.
    Selling into it anyway…

      1. Yeah, it reminds me of a kid being dragged round the shops lol.
        Another lump gone at 18…

      2. lol wtf you doing trading at 2am on a Monday?
        Let’s see if we get our 16.00 rally, DOW +100 pts, ~1/3 pullback…

          1. Problem is when trading individual positions there’s too many buttons and not enough fingers…..should have learnt to type :0)

          2. no comment 😉

            Both the markets and I undecided what to do here.
            Our lacklustre performance makes me think a bit more downside to come, then maybe a late closing rally, DOW dependent of course.
            Grown rather attached to what’s left of a long term (7 hours!) position for me, would like it to go out on a bang, teens will do me.

    1. I was just wondering what you were thinking, I assumed you still had that 06 long.

      Added to long at 93 hopefully for that run up I mentioned, won’t be teens though I doubt.

          1. I got out of the 06 long by the skin of my teeth and switched into a short at average of 13. I’ve not been exactly comfortable, but the afternoon has been more profitable than this morning! I took some courage from the fact you were short too:)
            Hoping for a run up for the Dow after ftse close.
            Any idea what happened about that fed meeting yet?

    1. 6200 has incredible magnetic powers. It actually doesn’t seem comfortable anywhere else!

  17. Closed out some more trades.
    203 long at 218 for +15
    87.7 long from 2am at 218.7 for +31 medium size…
    87.8 long at 217.5 for +29.7 smaller than medium one.

      1. Nice one Anstel ! Your 2am trade worked like a charm
        I’ve been grinding out a profit – was down in an uncomfortable way earlier, but with a process involving throwing a dice and not daring to look at the screen, it’s all come good. I’ll stick to smaller stakes tomorrow, my nerves can’t take it haha. Must be nice to get into a good enough account profit to be able to wind it up, but I’m not there yet and shouldn’t be doing 10pp on the Dow – mostly seem to need a minimum of 10 point stop and ideally more – which quite quickly gets out of hand with a 10k account.
        Does anyone manage to ‘fire and forget’ trades? I have to watch every tick and it’s killing me lol.
        I’m going to quit while I’m ahead, so see you tomorrow chaps and happy trading if you’re still going.

        1. Hi inoodle…..thanks I’m still plugging away…..my thoughts are 10 pp on Dow can easily get out of hand if you use wide stops and small stops will get you closed out unless you have tmfps feel for price action…..just a thought but have a think about multiple entries …..if you get into profit slap a stop behind it and add size…….if it drops from your first entry you could scale into your position in 3 or 4 seperate entries…..don’t know just an idea inoodle ..you are better taking advice from the experienced people but you could ask them what they think…..good luck buddy……

          1. Thanks that’s a good idea actually – I was putting the full amount on then quickly trying to take some off when it went to profit, but doing it in separate trades once I’ve got stop to break even sounds like a far safer way of loading up. Cheers for that!

      2. Nice,been interesting this evening,after that first big pull back anyway.
        I still have half an ASX position open from last night,think it might get into the 5000’s now.

        1. Never traded the ASX but you mentioned it some time ago……maybe one day but I think I’m best to stick with what im used to for now…Hope you have had a profitable day WSF…….I might just hang around see if I can make a few more trades if they present themselves……like now I reckon

          3. Still got my Dax swing trade looking like it’s got high blood pressure……….I have part of it in the blue but I’m looking for 100pts out of that part of the trade so it can sit there till it behaves…

          5. Goodnight WSF….start again fresh tomorrow buddy….just added long Ftse at 84. And 593 Dow.All nice and manageable in size and today’s profits will be more than enough to run a wide stop and still be well up on the day if it hits …….Goodnight catch you tomorrow…

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