6400 then? 6435 broke overnight…

bianca trends
bianca trends

Good morning, hope you had a good weekend. Not looking like a great start to the week with the FTSE just above 6400 as I write this, off the back off the Chinese Manufacturing data last night, reaching a 3 month low (50.5 versus 50.9 estimate). Of course, the big even for this week is the Fed meeting tomorrow and Wednesday which should provide some clarity on when they will taper. That’s what everyone’s expecting anyway. I think though they will reiterate that it will be when data warrants it, rather than a set date at this stage as economies are still fragile, as shown by the Chinese data. Would be a shame to withdraw QE too early and put the brakes on any sort of vital signs in the economy. At least with prices on the FTSE now nearly at the 6400 level (an area that I had from ages ago as older members will know, as a potential bounce point) we could see the start of the climb around about now. Interestingly all 3 Bianca channels have met at this area as well. I’d go so far as to say that no immediate tapering could kick start that Santa Rally and we still get the 6800 year end close, provided 6400 holds.

Asia Overnight from Bloomberg

Asian stocks fell for a fourth day, poised for a three-month low, after a gauge of Chinese manufacturing fell and as investors awaited a Federal Reserve meeting starting tomorrow to gauge the timing of stimulus cuts.

The MSCI Asia Pacific Index lost 0.6 percent to 137.15 as of 2:05 p.m. in Hong Kong, heading for its lowest close since Sept. 13. The measure dropped 1.1 percent last week, a second week of declines, as improving U.S. economic data spurred bets stimulus will be reduced. The Fed will start paring $85 billion of monthly bond purchases this week, according to 34 percent of economists surveyed Dec. 6 by Bloomberg. Futures on the Standard & Poor’s 500 Index slid 0.5 percent today.

“The market is very divided on whether the Fed will announce any changes,” Stewart Richardson, who helps oversee about $100 million as chief investment officer at RMG Wealth Management LLP in London, said in an e-mail. “Equity markets seem to be behaving a little more bearishly in the run-up to this meeting compared to September.”

Manufacturing Data

The HSBC Holdings Plc/Markit Economics preliminary manufacturing purchasing managers’ index for China fell to 50.5 in December, missing the 50.9 estimate in a Bloomberg survey after coming in at 50.8 in November. Readings above 50 signal expansion. The data may signal pressure to support short-term growth as President Xi Jinpoing rolls out reforms to sustain momentum for the rest of the decade.

FTSE Outlook

ftse 100 prediction
ftse 100 prediction

No significant rally is likely to kick in pre Fed meeting I wouldn’t expect (though as we know, always expect the unexpected!) however 6400 presents a decent buying level I feel for a possible swing trade to hold till the end of the month. All 3 Bianca channels are there, I had 6400 in my mind from way back for a decline too (not actually thinking we would see it though I admit, once prices hit 6800 in October) and I do still think we won’t have tapering for a few months yet, and its still only a possible anyway as its data dependant.

Today’s pivot is 6445 so will be an initial resistance level that will need to be overcome. Immediate term this current bounce off 6400 I think might struggle at 6425ish which is where there is a ProTrend lien and also the 2 EMAs on the 30minute.

201 Comments

      1. It is very difficult to hit the sweet spot Jack especially with the short trades. You can look only for levels and the trend, usually by the time you spot the signal, you already lose your entry. I have a 30 point stop so, I am happy to hold. If the trade doesn’t go my way, I will look for another opportunity.

        I had a trade open last night short from 6447 with limit of 6400 and stop around 6490. I bagged 47 points last night while having a good sleep. It doesn’t happen always 🙂

        1. I normally tend to trade retracements. Now the price gone and the train gone, and trying to short this “steam engine” is not what is usually a winning opportunity. However if I short this it’s usually on the tops, better touching some levels hoping for a missive rejection. So I had a short lasting short 6453 (out b/e), and 6468 (out +1), wast of time really. Now I expect a breakout to 6485 as it didn’t show any signs of short so it is more likely to break the top (if it didn’t break down when it had a chance it’s now a chance to break the top – that’s my reasoning).

      1. when this starts to happen, u being to see a reveral, since open there has been a bit of flow to the short side..

  4. Am not buying this rise….. yet….. Wall Street is bound to send the shivers through the markets before Wednesday’s Fed meeting (if only that the big guys will want to buy in lower) and that will quickly wipe these gains out (unless you are trading intraday which I am not. I am of a view that the FTSE will turn later positive this week and this will stick but keeping powder dry in the meantime rather than chase every movement

  7. This is a big bounce on ftse, so im going to be careful, wasnt expecting it to drop to 6400 overnight and then rebounce to 6470, its quiet significant and can be a stealthy reversal.
    I was suppose to close my shorts at 6400 like i mentioned last week but I didnt put in the LIMIT :(..going to hold an manually close my position if we see more upside.
    I am looking to add to short at 6475..if we close above 6500 then im closing all my shorts.

    2. One of the posters 🙂 on the previous day’s thread ‘predicted’ – some sort of ‘conjunction’ that could be seen in the tea-leaves lol 🙂 that 6475 would be a ‘key’ area to watch out for on Monday… and what do we have, the FTSE shooting straight up to 6475 lol :-)… wished I had longed the damned thing lol 🙂

      1. Dont know why but lookin at the charts it feels weird to be short now…very strong bounce from S2 to R2…
        SL set to 6500

  8. Yes holding above 6500 is for me the reason to start believing Santa is arriving – will be very surprised if that happens before Wednesday evening. if it does then difficult call as would rather not go too long ahead of the Fed meeting – guess will just let the price/action guide me

  11. WE are seeing the so called bounce similar to the other week, which was a bull trap.
    Let’s see this one, how it works. This bounce I was expecting Friday.
    I’m going to close my position at b/e or a bit higher, depends how the market goes.
    Maybe I will only leave it open until end of week or after 😀

      1. yes hope so. with the rsi being so low and macd close to a crossover i thought it mightwork out. i caught the move down like yourself at 6723.

      1. If im correct, most people retail traders will start shorting (its a nice back up i use to confirm signals from my own indicator)…

    1. ^^^ its this behaviour of retail traders that makes monitoring the flow of buy/sell a very good indicator lol

    2. not saying ur wrong..lol cus right now i got bearish signal as well..but i think its reversing hence why i closed my shorts n now am long.
      GL to both 🙂

  20. Just sold my long. Any pull back to 6475 and I’ll get back in. Still reeling off this morning. A break probably be good but don’t want to miss a pop!

    1. yeh igot in the long late..took me a while to realize (entered 6475…we most likely get pullbacks..bad for me :(…hope we dont though lol) hope we get pullback at 6510 to 6486 ill add more long then haha

  24. I’m still not prepared to rush long into this – still expecting it to drop sub 6400 before the “real” rally starts. Surprised though by the strength all of it all of a sudden today, given the weeks of weakness. Certainly suggesting the market is soon for turning

  28. I did shorted it and closed 88.5 for points but still losing 3 points. So it’s a waste of time shorting any rallies.

  33. Everything I thought I had ever learnt has gone out of the window over the last week.

    Especially today.

  34. Looking for a short term short if there is some confirmation, only looking to hold for a couple of legs down though.

    3. Take you pick from anything!! The moon, the stars, X factor winner over the weekend!! This is markets, the news is made to FIT the action, always AFTER!!!

  36. Dax – Hitting previous upward trend line on the daily chart. Hitting top of 4 hour downward trend and also hitting fairly strong resistance level. Just moved over 200 points.

  38. ABC for me is the opposite.
    Everything working as usual.
    Now will be another bull trap ?
    That deep overnight maybe the signal everyone was expecting, but now we need more confirmation.

    1. In no way wanting to start an argument…but for quite a while I remember your charts and theory being bull bull bull…and we just saw a continuing slide.

      Hence why I feel quite a few people may have questioned their theories/analysis etc…

      Obviously we will get it right some of the time (like yourself today)…but it’s taken a while?

      1. lol ABC dont do it… i get told that my indicator is some made up thing and have people attacking me.

    1. If you are so sure, why not borrow a £100k and put it all on your sure bet…Lol
      If the markets was such a certainty everyone would be very rich and self employed!!!

      Gl tough!

  41. Daily charts — Got decent early ‘up’ signals for S&P 500 and Dow. Both close to mid-channel at the moment so likely to get boosted back onto the upper track. Same signal for the FTSE, but weaker – less certain. Also, FTSE has just come off the lower rung of its daily channel – perhaps still vulnerable.

  43. ABC
    I think I already explained that.
    I exit in my trailing stop. No big deal.
    I become bear since then, etc, etc.
    Its all in previous posts if you read it.
    I do not guess top or bottom.

    1. As I mentioned, I was not at all having a go.

      Merely pointing out that quite often things go the opposite way of the best analysis.

      “The markets can remain irrational longer than one can remain solvent” !

  47. A little light entertainment —

    “Aggreko lifts FTSE
    An upbeat outlook from services provider Aggreko has helped to give the FTSE 100 a lift into positive territory, helping to offset the…
    Brenda Kelly, 4 hours ago”

    1. Warren Firth from IG said today

      “Price at time of writing – 9006.

      My long-term DAX recommendation was to take profit at 8972, and sell short on any extension of the rally to the top of my target/resistance band defined as 8942-9054.
      Recommendation: Sell short on any rise to 9048, or on a break below 8942, whichever occurs first. The target becomes 8640.”

      Got that one wrong!

      1. nothing bad i can say about short here for the short term…looks reasonable, i dont want to do short and long as it seems to mess my head up, i was short for quiet some time and turned to long today at 6475, have taken it out at around 6524.8

  53. Just put 2 quid long on the dow
    Got 80 pips, sold.
    Never make profit on the dow, so screwing that the one time i did win i put next to nothing on it.
    Looking for a ftse pullback for sure, as with all indices.

  56. 😀
    I’m not at home. Exit at my target 6530 from last week.
    Need to look at these swing in detail.
    It looks a bit more strong then from the other Friday.
    We may have started an uptrend again.

  58. And here it is merry Christmas all the bulls are making money. Was down £4.1k at one point 6542 average open, got average down to 6506. Gl all, and let the good times roll. If today finishes strongly pretty much expect a second rise tomorrow .

  61. But we are still in bear territory.
    Do not guess bottoms or tops.
    My trailing stop was hit at 6692, when we were still in bull territory (indicators), but became bear, only looking at price action (6692).

  63. What the hell? Just logged on…didn’t plan to trade ahead of the FOMC on Wed…and see FTSE rallies some 140 pts from the low and DOW some 250 from it’s overnight low….a big rally on NO NEWS before Fed…now that really stinks!!!

    I am gutted because I could have gone long on miners this morning at 8am when they tanked, (in bed then 🙁 ), only to see a rally of some 5% in the likes of Anglo American from it’s low this morning…very very angry!!!

    As always markets defy COMMON SENSE..we already know they defy economic fundamentals!!! All week we have been hearing investors are cautious ahead of the FOMC…so what happened today to change the equilibrium?

    I agree with Nick’s analysis of not expecting a substantial rally ahead of FOMC..however this view didn’t materialise…keeping an eye on shorting Twitter when it breaches $60…or near that level…now at about $59.34..looks like got to hunt elsewhere…

  64. Just looked on IG…Brenda Kelly talking rubbish again…she would have you believe that FTSE component Aggreko is ‘single-handedly’ responsible for the 140 point ftse rally from it’s low overnight…lol…was not aware that Aggreko had 90% weighting in the FTSE…hate it when so called experts talk rubbish…why can’t she just say I cannot explain it or more likely that it is shorts booking profits from the recent downleg..which is more plausible..

    1. “was not aware that Aggreko had 90% weighting in the FTSE”… you learn something new every day, Ray… lol 🙂

    2. Ray, see my post above, ‘A little light entertainment’! I can’t believe the level of inanity. 🙂

  69. Proof why experts talk rubbish..CNBC today..”U.S. stocks surged on Monday, with the Dow and S&P 500 bouncing back from two consecutive weekly declines,as Wall Street TRIED TO MEASURE WHAT’S AHEAD FOR MONETARY STIMULUS ONE DAY AHEAD OF A TWO-DAY FEDERAL RESERVE MEETING”.

    Capitals emphasis my own….just checked dow rallied an ASTONISHING 274 points just today…from 15662 overnight low to intraday high of 15936…as investors TRIED to measure what’s ahead..i.e. they guessed ahead…and we rallied 274 pts in dow…even if we had the bloody fed decision today I doubt we would have rallied 274 pts!!!!

    End of rant!! 🙂 Proof experts and CNBC etc are full of crap…all last week they were saying investors are NOT building up positions ahead of FOMC…hmmm….

    1. 😀 press/media, they do their job. They do not make money from the markets as we. But surely they could do a better job

      1. Have a look at who owns them..CNBC, Bloomberg, etc… conflict of interest. As for brokers like IG, CMC ditto.

  70. Dave..I think it’s more like buy on bullshit..sell on bullshit…lol..:-)

    Anway..got rid a bit of my anger by booking small profit in Twitter short just now..but gutted about miners this morning..anyone want to explain why they dropped heavily this morning on bad Chinese data overnight..but rallied to erase those losses and result in more gains than Friday’s close? 🙂 I doubt it will make sense…

  71. The speed of the FTSE’s pull-back has seen it become somewhat oversold, and it may first need to rally back to 6491. This would provide an ideal opportunity to sell the index more aggressively before a likely resumption of its new downtrend.

    Recommendation: Stay short, or sell again on any rally back to 6491. The target becomes 6251. Stop-losses can be activated on strength above 6600.

    Warren Firth, IG

    1. hes chatting crap, no way will we be seeing below 6300 (even 6400 now) unless fed taper. I’d say maybe Q1 next year we might but i dont know cant think that far ahead. I am expecting a lot of vol, kind of think today was reversal.

      1. loool im just gona set in a order at 6500 (already done), and check up on it every now n then..at this rate dont look like 6500 gon get hit

  73. It was a long waiting till DEC.18. The markets cannot stop 😀
    That last base was for a bounce, never for more sell from an already oversold indice.
    At least the markets could stay sideways for a couple of days more, but no 😀 it was too exciting to stay in same place too much time. This is good for stocks, not general markets 😀

    1. only thing scaring me now is too many retail people buying ….not a great sign AT ALL. Majority of retail traders have profited already soo far and they can only do soo much….

  75. A good morning star, with that close and price above T-line with positive slope.
    Even so, I want to see follow trough tomorrow

  76. THe best signal we have right now, is the candle lenght :O HUGE
    And out of curiosity it has the same length as the last October reverse candle

    1. im considering if it might be a bull trap…its just that we are soo close to fed meeting making it soo confusing, and to be honest my signals are bearish … im going long purely because we are close to fed meeting and im thinking no tapering (markets have priced in the tapering) meaning after announcement of no tapering we should be back up to 6700 in no time.

  79. Twitter falls today from $60 to $56.80 now…lost a whole 3 dollars…lol…what a bubble…rallied from from $38 to $60 in a few weeks..move was indeed parabolic!!! Absolutely diabolic…:-)

    2. the thing with the move overnight and early mornign was that u cudnt catch them … if u did then u are just gambling…i wouldnt believe if someone managed to predict it… only way u cudve caught those points if u have previously built long positions…so dont dwell on it 🙂
      focus on what the future opportunities u have.

      1. I saw that move this morning, and when you see the DAX down at 8980’s and the FTSE at near 6400, it was bloody tempting !! I just wished I had the balls to pull the trigger and not have to take the kids to school !!

  82. “The economy is on a roll, and tapering is not a concern for the market anymore. I’ve been calling for the Fed to take action this month, and I think they will, but this month or January is irrelevant at this point”, said Peter Cardillo, chief market economist at Rockwell Global Capital….

    Verbatim..honest on CNBC website..click at top US mkts…I am not going to even dignify this with a response!

  83. I really dont know wht to do…ive pulled out my 6500 buy order (not executed)…
    my strategy is showing bear signal….im in a dilemma lol.
    stick to the strategy and go against majority on wed?
    Stay out market as im confused?
    or go with long betting on no tapering?

    1. imthinking instead of $20b taper..what if they end up doing say $5b or something smaller? wont that be positive for the market?

  84. … $20b taper, absolutely no chance, I think it would be $10b max and not a chance for this year either 🙂

  85. Just a quick one..just found out why we rallied some 140 pts in ftse from lows and 275 in dow…silly me..of course!!! It’s because we had a winner on X factor over the weekend! Sam Bailey.. 🙂

    As always guys..in trading..the news is always made to ‘FIT’ the market action AFTER it has happened!! From my experience of trading full time for over 5 years now, news has (90% of the time) got jack to do with it!! Today’s move was simply shorts booking profits..i.e. to close out their positions they need to BUY..driving the market higher!!

    Just look at last NFP day..lol..

  86. I have reading a lot on this site and I think people (95%) here do not give a damn to technical analysis, charts, etc. They only look to price and where it is going… 😀

  88. Price is king!! Technical analysis, charts etc..are lagging indicators…too slow to predict turnaround regards intraday moves,technicals more of a hit and miss..sometimes is just indeed a ‘best guess’ or a judgement call…example this rally was unexpected and not rational just before Fed decision…charts did not predict this 140 pop on Friday for this Monday morning…on a bigger time framework yes..but not for 24 hrs later..i.e..for traders…

    1. You are wrong. Charts predicted that we could have a bounce. But you are right, price action is KING.

      2. Agree with you that charts predicted a bounce..but they did not predict it would come as soon as Monday…that’s the problem with charts..too slow to predict intraday or 1-2 day moves..lagging indicator always!

        1. But good insight thinking. Closing short positions ahead of DEC.18.

          This is the small thinking that we must be aware ahead of important dates

  90. Why are we waiting for the ‘BIG NEWS’ on Wed now??? Going by today’s move ..it’s like it has already happened…

    1. Lol ray u just mentioned above that this could be a move possibly because people are closing shorts for profit taking…

  92. Everyone keep an eye open on IG’s Warren Firth’s prediction above..I am going to slate this guy big time if he gets it wrong…

        1. The speed of the FTSE’s pull-back has seen it become somewhat oversold, and it may first need to rally back to 6491. This would provide an ideal opportunity to sell the index more aggressively before a likely resumption of its new downtrend.

          Recommendation: Stay short, or sell again on any rally back to 6491. The target becomes 6251. Stop-losses can be activated on strength above 6600.

          Warren Firth, IG

          The idiot wrote this before we hit the 6491 level

  94. Cnbc talking rubbish again..just now advising investors to invest for the santa rally in last 10 days of trading…advises dow rallies historically 1% around this time but very conveniently omits to say that you missed the near 2% dow rally today!!!

    Intraday dow low today was 15662..high 15936..so 274 points…= 1.75% dow rally just TODAY!!!

    It was a ‘stealth rally’…only the big boys made money on it…retail investors did not because they scared us shitless all week with Fed tapering scares…and retail investors were waiting for ACTUAL fed decision..rather than guessing it…

  95. Currently still holding my short which is losing at the moment obviously, but I just see a pullback overnight/morning (maybe just out of hope). Even if it does only get me down to breakeven area I would be happy. Caught so unaware today.

    So for everyone else out there…you will definitely profit by going long haha.

  96. ‘Quadruple witching’ Friday guys..expect volatility on Friday…

    Anyone going to short Herbalife??..just popped 10%..lol

  97. I still feel that the Fed will taper in a small way, look forward to a jolly good dumping session followed by a wild ride back up

  99. My kind of guy.. “There is little consensus whether good news is good or bad right now, with the indicators that I watch showing everything from fully bearish to fully bullish”, said Randy Frederick, managing director of active trading and derivatives at the Schwab Center for Financial Research.

    An upbeat November jobs report sparked a rally in equities on December 6, yet a week of mostly solid economic data drew a negative reaction from the stock market in the week that followed.

    “It doesn’t make a lot of sense. if good news is good news, it needs to stay that way”, said Fredrick. “Given the mixed indicators, I am not sure we know what the market wants”.

  100. “Debate will be running high through mid-day Wednesday about whether the Fed tapers or not at this FOMC meeting. If the averages trades higher today, tomorrow and Wednesday morning, then it could become a ‘sell on the news’ no matter the decision”, Elliot Spar, market strategist, at Stifel, Nicolaus & Co, wrote in emailed comments Monday afternoon.

    hhhm!!! 🙂

  101. Frederick is less confident about making a prediction on Wall Street’s reaction, whatever the Fed decides: “I think we’ll get a big move, I just don’t know in which direction”.

    SPOT ON!! I agree! 🙂 We should follow this guy on twitter…one of only a few who seems to talk sense in this circus!!

  102. What a day yesterday, the FTSE came to life… The FTSE is now in daily uptrend. So today buy the dips… Have said that I’m still short on FTSE and just longed the CAC agian @ 4100 to hedge… The FTSE could run to 6550 on this up leg ?

  103. Got one ‘flag’ lol 🙂 today saying to LONG the FTSE (surprise surprise! 🙂 , talk about quick on the uptake 🙂 and wasn’t that yesterday? lol 🙂 , one saying to LONG the CAC and TWO (wow 🙂 saying to SHORT the S & P 500 hmm.. 🙂

    1. Hmm, not so sure about the LONG ‘flag’ on the FTSE… kind of looks like the FTSE has made a sudden move from being well oversold to almost overbought lol Hmm. A massive push up on the FTSE although still in a downward channel on the 10 day… hmm 🙂 Always hard to tell… lol 🙂

  104. Incidentally, the last ‘flag’ lol 🙂 on the FTSE was way back on the 11/12/13 saying to SHORT it hmm… 🙂

  105. Been in and out of long positions for a day. Missed a lot of points. Now long at 6500 with half normal stake.

  106. I think if no taper and moreover no guidance of the plan we will pop then quickly down. I hope they reduce by $5-10 bn with a date for the reduction in say March. This will give certainty and we should rally. Still huge sums being pumped in and wider economic improvements. So bored of tapering but i guess we should welcome the volatility. My issue is too much £pp to hold big moves.

  107. I have 6550 as upside target for today, yesterday the FTSE broke down leg.. Only trouble, stop would have to be at 6420….

  109. Freefall could continue up to 6450ish. You never know where it’ll end, but I think more likely 6395 won’t be broken before it reverses. imho

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