6211, 6186, 6150, 6099 Support, 6276, 6288, 6305, 6356, 6381 Resistance

Good morning. We, and professional traders too, earn the money on days like that – carnage would sum it up quite well, as the prices just scream all over the place. It was such a big fall on the FTSE that even a 100 point bounce in the evening looked little more than a small bump on the chart. I had hoped that it was going to perfectly hit the Raff channel I emailed round last night at 6140 but instead bounced from just above at 6150. The way the S&P lead the charge definitely looked like the Plunge Protection Team (PPT) stepped up the plate. We are just above the Bianca channels for the moment, at 6211 and 6186, so we may see a little bit of a relief rally before more downside.

Asia Overnight from Bloomberg
Asian stocks slid toward a six-month low and average bond yields for the biggest developed economies fell to a record on concern that Europe’s economic woes may scupper the global recovery. Crude oil extended declines as South Korea’s won led emerging-market currencies higher.

The MSCI Asia Pacific Index sank 0.9 percent by 12:49 p.m. in Tokyo, as most major Asian benchmark gauges retreated.Japan’s Topix index dropped 2 percent. Standard & Poor’s 500 Index futuresadded 0.3 percent after the U.S. gauge fell to a six-month low. The won gained 0.3 percent. Japan’s 10-year bond yield dropped and Treasuries rose an eighth day as investors pushed out the estimate for when the Federal Reserve will raise rates. Oil in New York fell 1.3 percent to $80.75.

Euro-area inflation data is due today after the region’s stocks tumbled, Greek bonds plunged and Germany cut its growth forecast, stirring memories of the bloc’s sovereign-debt crisis. Asian bond risk surged. A bigger-than-projected drop in U.S. retail sales ignited concern over the impact of the global slowdown on the world’s biggest economy.

“There’s been a significant correction in U.S. equities and that’s shaken investor confidence,” Toby Lawson, head of futures, options and cash equities trading for Asia-Pacific at Newedge Group SA in Sydney, said by phone. “Geopolitical risks and the spread of Ebola are adding to global economic uncertainties. When the market is a state of flux, everything gets amplified.”

The S&P 500 ended last session down 0.8 percent, paring a drop of as much as 3 percent that briefly wiped out its gain for the year. Europe’s benchmark stock gauge plunged 3.2 percent, its biggest retreat in almost three years, and finished the day 11 percent below a June high, meeting the common definition of a correction.

Asia Stocks
The Asia-Pacific gauge is heading for its lowest close since March 25, and is down more than 9 percent from a July 29 high. The MSCI Emerging Markets Index fell 0.2 percent today.

All 33 industry groups on the Topix dropped today. The broadest measure of Japanese equities is 11 percent below its recent peak. The Nikkei 225 Stock Average slid 1.9 percent today as a gauge of options prices on the measure surged 14 percent to the highest since March.

Hong Kong’s Hang Seng Index dropped 0.5 percent and a gauge of Chinese shares in the city pared its loss to 0.1 percent. The Shanghai Composite Index climbed 0.6 percent and the CSI 300 Index also added 0.6 percent, buoyed by a surge in healthcare stocks amid heightened concern about the spread of the Ebola virus.

Treasury Surge
The average 10-year yield across the U.S., Germany and Japan fell to 1.1 percent, the lowest on record and down from 1.9 percent at the end of 2013.

The rate on Treasuries (USGG10YR) due in a decade fell four basis points to 2.10 percent today and Japanese 10-year bond yields fell to 0.475 percent. That’s the lowest since April last year, when the Bank of Japan unleashed an unprecedented prgram of monetary stimulus.

A measure of Treasury volatility jumped the most since September 2008 yesterday. Bank of America Merrill Lynch’s MOVE Index, which measures price swings based on options, climbed 26.64 basis points to 101.28 basis points.

Trading volume in U.S. Treasuries surged to the highest on record as investors dropped wagers that the Federal Reserve Will raise interest rates. More than $945 billion in U.S. government debt changed hands, according to ICAP Plc, the World’s largest interdealer broker. That surpassed the $662.2 billion traded on May 22, 2013, when former Fed Chairman Ben S. Bernanke mentioned the possibility of slowing bond purchases.

WTI, Brent
The yield on China’s sovereign bonds due September 2024 fell five basis points to 3.9 percent as of 10:46 a.m. in Shanghai, prices from the National Interbank Funding Center show. The benchmark 10-year yield dropped yesterday to the lowest level since August 2013, according to ChinaBond data.

Aggregate financing totaled 1.05 trillion yuan ($171 billion) last month, hitting a three-month high while missing the median estimate of 1.15 trillion yuan in a Bloomberg News survey, according to data released today by the People’s Bank of China.

West Texas Intermediate oil declined after ending last session down 0.1 percent at $81.78, its lowest settlement since June 2012.

Brent for November settlement, which expires today, declined as much as 71 cents, or 0.9 percent, to $83.07 a barrel on the London-based ICE Futures Europe exchange. The more-active December contract was down 70 cents at $83.42.

Bank of America Corp. and BNP Paribas SA predict prices will hold above $80 a barrel. Commerzbank AG also sees that level as a possible low for Brent crude. They’re in part counting on OPEC cutting output — some say as soon as next month — to compensate for recent declines in demand.

FTSE Outlook

FTSE 100 Prediction
FTSE 100 Prediction

What a day, haven’t seen just declines on the FTSE for a long time. Certainly a lot of fear out there over global economies, especially following poor US data; but that said company earnings that are coming through this week are not too bad. Todays pivot is 6276 so whilst I think we might see that today I do think we are about to get another leg down before a decent bounce. Looking at the S&P, down to 1835 maybe, then bounce to 1900? Ebola is still hovering as an issue too, with a rumour going round yesterday afternoon that Barcelona airport was in lock down after several symptomatic passengers arrived. Jitters all round then. Anyway, for today I think we might have a little continuation of that bounce from last night, a bit of consolidation then more downside, maybe tomorrow. There are quite a few resistance levels mention int he headline at the top of the email – thats the problem when it s bait chaotic, it puts the levels a bit all over the place. So, after an initial rise to the pivot, a possible dip from there (6288 is also resistance so this whole area). If it retests that area then we might get a rise to 6305, where we have the top of the 30 minute channel, and a good spot to go short again. If the bears really start, helped by the US then we could get further declines off that to the bottom of that channel around 6060, which might well tally with the S&P hitting 1837 where there is support.

145 Comments

      1. Dutch
        I feel the same. There is no way this market is goining to get there.
        But as all the trading guru’s say – “” if you have a system – that has a good track record, then to discount it because it is not working once or twice – goes against good trading “” Good trading is all about consistency. Repeat the same thing every day.
        But am I talking Bull**** ! I dont’ know really.

        2. applying systems as the only thing an an irrational market and indeed world is pretty much madness and if not for occasional luck a sure way to loose your shirt in the end. That’s me talking bull**** of course :-). By the way you best get out of that trade I recon.

  3. Hugh try out ? Your images do not upload
    Did you read my posts and my question?
    Can you answer that question ?
    It’s a simple question

    Thanks

    1. Yes PMS – I did reply with some images but it said that it was waiting to be moderated.
      On the detailed report – there are 3 tabs – one of which says closed positions.
      This will list all the trades that the summary report is covering.
      Let me know how you get on and I can do something this evening..

      1. Ok, thanks…but that is not what I’m asking. Not at all.
        \You did not understand my question. Thanks anyway

  4. Jim
    when you say :
    At the moment I’m using the 5 min. timeframe and a run of data from Monday morning.
    You place the start date at Oct.13 and data frequency from 3 days or data frequency randomly (100 bars/10000 bars )?

    Jim, Hugh
    I placed a Probacktest
    start date Oct.1 – 8:00am
    and end date real time
    And data frequency 10000 bars

    What will probactest reads ? The data for only the period starting Oct.1 or crossing with data for the 10000 bars ?

  6. Loving this market! 4 trades already completed this morning 127 points up! Broken 300 points this week :).

    1. What spreads are you using – knowing you do let’s say 6180 -6245.
      Volatility has increased – has that had any bearing on your spreads ?

      1. Started trading early and went short @45 @60 @75 (never trade with stops just trades) then went long @45 @30 @10. Went short again on the way back down to 10 @35 and just closed that @00.

        So long again now @85 – didn’t like how that got hit so quickly but at the same time don’t mind going long again too much. So next price is 65-15.
        Defensive price would be 6150-6200
        Confident price 6170-6220

          2. Yes Sam, I just asking him. changing from one side to the other, does not seem have any result on many of his trades
            I have this system of trade in Probacktest but in a longer time frame and the reverse usually has some profit, but never the same as if I would exit in dips or tops. The Probacktest only stays in the market all the time and I can choose to exit in top of EC, where the profits are huge.

  9. I cannot trade calmly today. Even though I had a sleeping drops I didn’t get much sleep. I didn’t worry about it but my subconscious did. It brought flashes of trading day into my mind. So pity I cannot get hold of those moves today. I think I got scared a bit yesterday.

      1. I need one, hindsight is good but I need a fresh air.
        How did you do yesterday?
        What surprising to me still is that my account lowered at max point (I just calculated) to -2118 pounds (£6pp) but I only had 2136 pounds in my account (maybe 2158, not sure if it was before dividend was added or not). How did they allow that? I couldn’t close the trade as I wasn’t there. But it did save me, however I’m thinking, would it go overdraft if it continued falling. Doubt it, it’s not a bank.
        Going out now, catch up later.

  17. For the time being 6075 Low

    S2 Pivot Point is 6082

    S3 Pivot Point 5953

    Quiet for a while …….possibly

  18. Long FTSE 6091 and keeping that whatever happens (lol!) picked up soo many points scrapping today, I’m totally knackered and have a day job to do. So will let this ride out and check back in the evening. GL all, keep it low stake and scrape!

    1. Lol – know what you mean – I’ve got a ton to do as well & wish things would just stop kickin up ..!

      1. It’s OK Senu – maybe a mistake – I was just following trade disciplines. I was Long – and put a stop just below Support (Short Trade) …hence, why I picked a Short up there …!!

  22. Industrial Production m/m
    forecast 0.4% -0.1%
    that could lift markets at the open

    but then

    Philly Fed Manufacturing Index
    forecast 19.9 22.5

    could set a new low

  25. Jim
    when you say :
    At the moment I’m using the 5 min. timeframe and a run of data from Monday morning.
    You place the start date at Oct.13 and data frequency from 3 days or data frequency randomly (100 bars/10000 bars )?

    Jim, Hugh
    I placed a Probacktest
    start date Oct.1 – 8:00am
    and end date real time
    And data frequency 10000 bars

    What will probactest reads ? The data for only the period starting Oct.1 or crossing with data for the 10000 bars ?

  27. Ref
    Hugh says:
    October 16, 2014 at 12:37 pm
    My Short at 6070.
    It’s OK Senu – maybe a mistake – I was just following trade disciplines. I was Long – and put a stop just below Support (Short Trade) …hence, why I picked a Short up there …!!
    Reply

      1. Yes I know what you mean about that 6145 entry – I looked up and it had moved so quickly away to 6130 – 6120 ..
        I’ve got 6118/19 as the resistance…at the moment

        I was thinking last night that these markets are quite severe at the moment as they’re not really providing the opportunity to square up …not yet anyhow !

      1. Draw a Fib down but instead of using the base as 0% – use it as 50% .
        That way you get a projection.
        Hope I explained that well enough.
        (I can’t remember the level I used)

  29. Do not care anymore with my fears. The system is doing well on DOW and SPX.
    I will place a short order on DOW, next time a see a sell signal after a buy signal.

      1. Sam – Yes
        But remember it is going against the trend.
        My suggestion – if you take it – bring your stop to breakeven ASAP

  31. The last small bounce gave a last buy at 16446 and sell at 16366 had a lost of 90+- points more or less (with worse spread), but the system is in profit and the variables stay the same.
    FTSE do not care with it, its a bad instrument for now.

  32. And since October 1 this last signals had loss in all (FTSE, SPX and DOW).
    DAX did not have any signal. Still in Sell mode
    But FTSE recalc the variables which was not a good thing to do.

  34. FTSE 5 Min Chart
    RSI TREND BROKEN
    30 MA Crossed
    MACD HIST RED
    MACD Looking as if it’s going to x.
    ADX Approaching 20 – if it goes up we are heading Up or Dwn.
    My ticker chart is RED.

    1. Think this is just a returned to “comfortable levels” .
      Can we really move higher without touching 6000 – I wonder ??

      1. Hugh

        Yes
        2nd try . 1st – hit my Stop
        But System is holding on to what it is saying.
        I know it is not broken – Just the fast market momentum
        is messing up with the parameters – on those sudden moves.

  37. i think US really want to touch & go 1800 this afternoon – just stop hunting and eat some accounts.

  38. here we go. Now give me a buy signal and wait for that sell signal. Mid session today hope see it-

      1. Thanks Nick.
        Was a bit depressed – with missing the short.
        With a little bit of throwing my keyboard, mouse at the monitor
        i worked off my frustration.
        I would anyday get the moves when market
        is managable than get 2 – 3 days of catching these fast irratic moves.
        So feeling better now.
        How has your day been?

        1. Things will start to calm down and can get back to technical trading so should be better.

          Day has been pretty good thanks, shorted 6276 this morning at the pivot. I had a long order 6070 which missed by 0.5 though which was rather annoying!

  43. Pleasing to eyes to some some greens among sea of blood red (positions) – not sure how long it will last though 🙂

  44. Wow – went long @30 didn’t even have time to put any orders in which would have only been to close @60 ended up closing @90 in seconds! Went short of a few extra as well.

  46. Hugh

    Target 2 Hit 6190
    Though I came out at 6167
    Feeling elated at the software. Still Unbroken.
    Really chuffed !

  47. Nick

    Yes the market still moves within technicals.
    However erratic the nature of the move.
    I suppose just have to have a real belief in it.

        1. Hugh

          Just trying to be clever.
          ————————————-
          RentalCollection says:
          October 16, 2014 at 9:32 am

          Long 6229 target 6296
          _________________________
          Trying to extrapolate.
          Preety poor job at doing it.

          Software only gave this.
          _____________________________
          RentalCollection says:
          October 16, 2014 at 2:06 pm

          Long entry at 6109
          Stop 6096
          Target -1 6167 Target -2 = 6190
          Not much use.
          Software gave 2 targets only

  56. Hugh

    Sent you a mail
    Trying to see if I can incorporate it,
    If i can atleast understand it.

  57. wow nice little rally, just closed my long, nearly 100 pointer!

    Think though of shorting 6200 level, what we think?

  62. Last reverse had a net profit of 19 points on SPX and 120 points on DOW from yesterday to today. Big swings in the autotrade it can handle.
    Manual I could had sold in the dip or trail

    I was blind, now I see. All those predictions from everyone are off my sight

    No more risk… no more stress. That’s my goal.

  63. If it reverses here, it will show in the chart again and signal will appeared.
    So another big move coming, as is the best month to test it

Comments are closed.