6291,6280, 6230, 6200 Support, 6349, 6365, 6457, 6462 Resistance

Good morning. Messy! Well we got the rise and dip as expected yesterday but the dip came from higher up with a rather large sell off at the end of the US session. Turned out the US was open yesterday, it was just the bond market that was closed. 6300 provided some overnight support, but it was quite a drop from 6390 in just a few hours – still a lot of fear opiut there and the bears are still in control really. I have 6230 or lower, still on the radar despite a low of 6243 on Sunday night. If 6290 gets taken out today then I expect we will see those lower levels, as that is the bottom of the 20 day Bianca channel.

Asia Overnight from Bloomberg
Asian stocks fell, with the regional benchmark index heading for a six-month low, extending a rout in global equities after the Standard & Poor’s 500 Index capped its biggest three-day loss since 2011.

The MSCI Asia Pacific Index (MXAP) fell 0.6 percent to 135.60 as of 9:04 a.m. in Tokyo before markets in China and Hong Kong open. The gauge dropped 8.8 percent from its year high in July through yesterday as the Federal Reserve contemplates when to raise interest rates and a faltering recovery in Europe sparked concern global economic growth will slow.

“Pessimism is coming back into the market amid the slump in U.S. equities,” said Nader Naeimi, who helps manage about $125 billion as head of dynamic asset allocation at Sydney-based AMP Capital Investors Ltd. “It’s been a while since we had a gut-shaking correction in the U.S. It will take a while before the market can build a firmer base. There are a lot of worries about global growth.”

Japan’s Topix index tumbled 2 percent after markets reopened from a holiday. South Korea’s Kospi index was little changed. Australia’s S&P/ASX 200 (AS51) Index gained 0.4 percent. New Zealand’s NZX 50 Index lost 0.8 percent.

Futures on the S&P 500 added 0.4 percent. The underlying gauge declined 1.7 percent yesterday in New York, bringing losses the past three days to 4.8 percent, the most since November 2011.

A rout in global equities wiped $1.54 trillion from shares last week, with the S&P 500 tumbling 3.1 percent for its worst drop in two years, amid growing concern of an international economic slowdown. Fed officials said over the weekend that the threat from overseas may lead to rate increases being delayed. The International Monetary Fund cut its forecast for global growth last week and said the euro area faces the risk of a recession.

Tensions escalated in Hong Kong yesterday as a mob tried to tear down barricades erected by pro-democracy protesters near the city’s business district, and student leaders vowed to defend front lines under threat of police moves to clear them.

FTSE Outlook

FTSE 100 Prediction
FTSE 100 Prediction

For today there is a fairly decent 30 minute channel in play, with resistance just above the daily pivot (6349) at 6360/65ish depending on when it might hit the top of that channel. As such I think that channel will be decent to play off today, so a short at the top of it for a dip down to the 6291 area. If that breaks then i can see the bears getting a bit of momentum and breaking through the other supports that are just below, namely the 10 day Bianca at 6280. If they do then the downside level for support is 6205ish, then the bottom of the Raffs at 6100ish. With the sell off at the US close last night the bears are still in control and there is a lot of fear out there, the daily trends still firmly down, and Gold still rising. That said, the FTSE has fought back a bit from the 6300 overnight low, and is looking at opening around 6340ish. I have put in an initial rise this morning to the top of that channel and just past the pivot, but if that breaks then 6390 being yesterdays high will be resistance, before the Bianca channel tops at 6440 – maybe a bit too optimistic for today but you never know! Still short the rallies really, with most indices breaking below their 200 day moving averages now.

156 Comments

  1. FTSE gave me this morning at 9:00 a buy signal, but as FTSE gave false signals during the night for the 1st time since Oct.1…I’m in sidelines on FTSE. This index gave the worse performance in the system, when I run the test, comparing with DAX, DOW and SPX

  2. My gut feeling for October was exactly right…I should had short all indices in start October and let it run.

  11. Nelly if your not in a trade then leave it… Imho look like more downside but market could change

  12. My signals on FTSE are a bit of a mess 😀
    My exit yesterday at b/e was a good choice.
    Not trading at all.
    But have alerts to go long in SPX, DOW and DAX if signal reverts to buy mode. FTSE is out of the game

  15. FTSE running with Nick’s arrow, next stop 6291. Have a buy order there.

    smokingaces, when will they announce QE4?

  16. Senu I was being humorous in the past every time markets have sunk central banks jump in… How long before they jump in again?

  18. Problem is market is running on pure fear. fear/greed index hit 0 yesterday have never seen this before vix is though the roof… Problem is when everyone is bearish that when the market turns.

  23. Morning all, hope everyone’s having a profitable day?

    Closed yesterdays shorts mid morning. Set my next price @90-40. Didn’t get past 38, how annoying!

  30. I don’t want to be too bearish as the market is weak and we buy on weakness but it hit my price. 6320-6370

  38. Been developing a new way of analysing 2hr charts and doing this on DAX. Doing some testing and going to try and post signals and tergets here. First one is SHORT DAX 8829 for target 8751. Lets see!

  40. Had to be out for a bit. Still testing and exploring. The 5 min. system responded leisurely to the bounce from about 6307, and lost a chunk of gains from the earlier 6349 SHORT. Since going LONG @ 6336 the system has piled on the points; gains are now ≈ 15 pts above their previous high. Right now, I’m expecting the upswing to develop some more.

    1. Humm… so you are in line with my thoughts.
      Got long at 6336 but exit below the 50 ma at 6376

      1. My system on FTSE is a mess… it optimizes after the loss 40 points from reverse buy to sell, last evening.
        The backtest program does not test for ex: 8:00 till 16:30
        It has a lot of limited issues.

        1. And ofc, after that optimizer, now all the signals are gone, with only one in Oct.1, which is a short one.
          This gives me the idea that all is an illusion

    1. Jim, so far so good with your software signals. I reckon if you tweak a bit, you might get another 5/10 points and align with RC software signals. Just a suggestion 🙂

  44. I do not want to spoil the party, but FTSE is going for another try at that 50 ma.
    Now US will dictate

  47. Uau… the “candy” indicator on DAX giving a green light before the end of the hour.

    Did not saw one in a looooong time

    1. Yes senu, am still optimistic about gold @1000 next few months. Gold is no more attractive as US and UK interest rate are set to raise in next 12 months. Gold might fluctuate depending on geo-political events, but downtrend will continue. At the peak gold was nearly 1900, lets say a 50% correction, ie., 900ish. well, thats my view 🙂

      1. I went long at 14.31 when looking at construction i would have gone short in the past. but it’s macd. all about macd.

        1. A, and something else – it’s new for me. when it dropped to 16365 I nearly closed as I did in the past admitting it’s a wrong trade. but then I thought – wait, if 16370 bounces it will be great. patience also imp.

  53. Afternoon Guys
    Can see that you all have done some fantastic trades.
    6381 – is a tough nut to crack

  55. and that’s the reason why i didn’t hold above pivot. bearish action, it looks like short now, guys. pivot didn’t hold? however i’m not going to test it.

      1. Oh, I had a tight price watch. I didn’t believe the pivot would hold so got out at first wobble. I was thinking of short but I cannot get moves like this, they scare me. Who knows if it just pulls back (massive pull back) or crashes down? There’s not guarantee. Maybe someone knows or brave enough. Not me. By EMA the spike was an obvious option so I went for it, managing tightly.

        1. although, as you know, Senu, short off pivot seems like a reasonable option. but I was long before that and didn’t adjust to taking any trades so soon.
          Tbh, it’s all gamble. I admit, I was a gamble, it could not spike at all.

    2. it’s too early for anything. Things need time to develop. It might go a test the lows of overnight or something….

    1. yes I think it was only few points out really looking at it now and also believe we will head towards that target. No gains but exciting none the less.

    1. I just recalculated variables for the first time since open. They remain unchanged, which is reassuring.

      1. I hate those variables, Jim… they look ok when everything is ok. If something changes in the performance for worst…the variables will change drastically

  61. I see, it just touched the bottom of the channel on Dow, don’t know where it goes. thinking – it goes up again.

  65. Senu. 6382 break confirmed… you now can go long…but a bit more difficult as we are at end of session and US dictates now the trend in overall markets until night

  66. Waiting now for that signal in US… the alerts are activated and positions open when it happens. I already had my thing today with FTSE.

    1. Not so… giving good signals. It seems is awakening…the bears I think are doing the beds for hibernation… but still a doing the beds, nothing more

  71. Probably better to take the profits – if it gets close o 4.30 – after hours seems to mess with the signals – just a precaution I suppose

  72. can anybody suggest how I can put this page to autofresh & remain where it is – rather than having to scroll down. pain in ….side

        1. Jim
          HI . How was your day. Were the signals better today.
          Could not post in morning – browser kept crashing.

  74. Sam
    Thanks – will try to install it.
    Looks like the 1st target is going to get hit after hours !
    & probably the 2nd as well.
    I came out at 6400 – earlier on

  76. Hi RC — Much better! Went back to ‘untweaked’ model. Major gains were made from SHORT @ 6377 18:30 yesterday and LONG @ 6301 22:00 yesterday. Gains today have been OK and overall the system is up 194 pts. as of now against 08:00 yesterday morning. Parameters have remained unchanged on recalc. today, which I am pleased about. How about you! 😀
    Sam — Thanks for the autorefresh hint. Works a treat on Microsoft Explorer. Brilliant.

      1. Jim
        Yes the sofware was very good today. Got most of the moves.
        1. Long = 6336 Target1 = 6361 T2 = 6381
        2. Short 6361 – T1 = 6330 T-2 6313
        3. Long 6313 – T-1 6361 T-2 6381
        4. Long 6363 – T1 = 6411 T2 6436
        —————————————————-
        Have you begun to trade your signals ?
        If you have not yet – then you may have to factor that in –
        so a signal generated at 1 am – may be difficult to trade.
        Have you tried to see what & how it affects the signals
        by just having the market hours data only ! it may
        suprise you.
        I have learnt that after 4.30 – the signals are suspect.
        A target is – sort of OK – but a fresh signal – is often a dud.
        The 1st target suggested for the last trade – hit 6411 but
        I would not hold onto a position for the 2nd suggested target.
        —————————————-
        Could you post your trades that the software signalled.
        Would like to compare – & see if there was any correlation
        with what I got.
        Any possibility of sending a chart to me.
        thanks

  77. Si, Deangillan

    Read your post from yesterday.
    Not sure whether I have any qualifications to comment on it.
    I have been through very similar experiances as you guys, and I am
    sure many traders here will also know what you are talking about.
    From my experiance – as we go through the years – we collect baggage
    and its dificult to see anything as it is. It always seems to be through
    a fog – that the baggage creates.
    There must be a few dozen traders who sign on to this forum. I am sure
    that all of us see the same market very differently.
    Sometimes its good to just take a break and comeback with a slightly
    uncluttered mind.
    Personally – I took off a month or so – & then decided to try using this
    software for signals. Even though the software generates the signals
    I could look at the effect differently and tweek the settings with an open
    mind. It really made a difference. I have had the software for a good
    few years – but it was useless, until I approached it differently
    Sometimes the solution is sitting right infront of us but we just cannot
    see it.
    There have been a few bits of research done – with results where they
    postulate that it takes 7 years to master anything.
    They also say that this can be shortened by hitching a ride off someone!
    Not sure on that.

    Well I have done my good deeds for the day I suppose.

    Good luck
    RC

  79. As I thought, it went up after touching the bottom line of the channel. But it was so choppy so I wouldn’t have considered that long again.

  80. I am tired now. Better go to the pub for a half.
    See you guys & good trading for all of you who are
    night hawks.

  83. @RC. Legend. That is all. :-b

    Thanks pal. I hear ya. I’ll keep on trying and plugging.

    “this time next year Rodney we”ll be millionaires!!”

  84. Hi Guys
    Got a sell signal Just at open 6372 Target 6327 & 6298
    I could not get into this trade – too fast for me.

    There is no Buy signal as I write this.
    However from past experiance – the Buy signals often
    originate from the targets.
    Just something to bear in mind

  85. Think it is pretty much same as last few days, short the rallies as there is only more and more bad news and to a point where earnings might lift markets a bit in short term but the word for the rest of the year is deflation and it looks like a global phenomenon which is a huge problem, especially in Europe. So anyone who has long term longs or planning some, I would very carefully think that through as markets can easily go down another 10% now

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