6470 area to hold today?

Good morning. We got the dip and rise yesterday which stalled as expected at around the 6555/6565 area. I wasn’t sure what it was going to do from that point so my arrows ended there for the prediction. It was a 50/50 chance of more rises to test the 6570 area, or tank. As we know it did the latter, and drop it did. Its being pinned on the tapering starting soon, based on that US debt deal I mentioned. Unfortunately prices never got as high as our ideal shorting area at 6565, but will probably drop a bit further before any possible rally nearer to Christmas. It felt like it was too early to start just yet. Looking at the S&P its right on the bottom of the 20 day Raff channel at 1778, so could possible form a bottom here. If not then I think its heading to 1757. It certainly closed weakly yesterday, dropping the most in a month yesterday. Be good to get some clarity for a little while longer after the Fed meeting next week (17/18 Dec).

Asia Overnight from Bloomberg

Asian stocks fell, with the regional index heading for its lowest close in two months, as investors speculate the U.S. budget deal will give the Federal Reserve confidence to curb stimulus as soon as next week.

The MSCI Asia Pacific Index slid 0.8 percent to 138.69 as of 2:02 p.m. in Hong Kong, falling for a second day as all 10 industry groups on the gauge dropped. The budget compromise forged by U.S. lawmakers, which will ease automatic spending cuts and reduce the deficit, comes after 34 percent of economists surveyed by Bloomberg on Dec. 6 said the Fed will begin paring its $85 billion in monthly bond purchases when it meets Dec. 17-18.

“There is risk of a short-term correction in shares,” Shane Oliver, who helps oversee $131 billion as head of investment strategy at AMP Capital Investors Ltd. in Sydney, said in an e-mail. The risk is “we see a combination of Fed tapering and a faster growth acceleration. After the rapid gains of the last two years, shares are no longer dirt cheap. As a result, returns are likely to be more constrained and volatile.”

Futures on the S&P 500 slid 0.1 percent today. The gauge yesterday posted its biggest back-to-back drop in two months as the congressional budget accord fueled speculation the Fed may trim stimulus next week.

FTSE Outlook

ftse 100 monthly
ftse 100 monthly

Oh dear. The bulls have really mucked up their chance, however they might just be keeping their powder dry as this drop looks fairly ordered to me. Overnight we have a low of 6467 so that’s the line in the sand for the moment. with the S&P sitting on its 20 day Raff then a bounce is possible, and it will be nice to get some clarity of Feb tapering plans. They will taper of course, its just a question of when and in the meantime we get these fear driven sell offs then the reassurance bounces. I still think they will wait till the recovery is really cemented in before tapering. At the end of the day if you have thrown a couple of trillion in, what a few more billion and tapering too early might scupper it. That said, if we continue being weak and start breaking below this current level, a drop to 6175 is possible, which is the 25 EMA on the monthly chart below. We are currently near the 10EMA at 6450.

ftse 100 prediction
ftse 100 prediction

144 Comments

  2. Closed short at 6470 as per Nicks chart, not willing to go long as its in daily downtrend. Would rather wait if we get a rebound to short again…
    The CAC looking strong….

  3. im still short (sad i couldnt add to it and that im only holding 1/3 of my original position, closed 2/3 last week around 6500-6510).
    Not looking to go long until either we hit 6350 or just on the 18th after fed announcement (latter will be dangerous, remember last time it did that and nearly shit my pants..the time it took to scroll my screen i was up +20 points lol, can just imagine if i had the wrong trade on..i wudnt have realized it till i was atleast 60 points down!)

      1. now that hard part senu of when to get out!
        We have it easy, imagine if you trading HUGE amounts, not only will u have a problem of WHEN to get out but also HOW to get out! as u may effect market as well as end up losing profit when liquidating!

        1. I remember at my old work place, their positions were soo huge that it took them sometimes a whole day to rebalance a market.
          And they had a rule, that it shouldnt take more than X (dont want to give exact number…never know whos watching) amount of days to liquidate a single market position…and they used to struggle with it lool

  4. Been long from the 6480 area since last night…beginning to question whether it’s a good one to hold now. Thinking I was slightly premature…

    1. everyone long @ the same level. it is not a rule that FTSe should go down when everyone is long in this blog. Let’s hope we get 6500ish .. Ahwab are you still holding your longs?

    1. more like 100 point jump…and thats only half :P.
      Tapering…
      And because of this drop on fear of tapering, if they dont taper… the bounce will be very strong, and im with Nick, no tapering in Dec..
      Remember last time when Fed had taper talks and the market assumed no tapering…what happened was that the market never reacted as bullish as a couple meetings ago when markets behaved exactly like they are now and then for next couple days they were pure bullish..
      and this is what i think is happening now..fear pushing markets down and im betting money on it soon that they will jump hard…its just that there will be a bit more drop id say.

      I AM CLOSING ALL SHORTS AT 6400

      1. “more like 100 point jump…and thats only half 😛 .” ignore that line lool that was a reply to one of ur previous comment!

  8. I have three open positions… Long from 6600, 6550, and 6530. 2 stops at 6450, and one stop at 6400. I do not want to risk any more capital than I currently am on increasing stops. I was expecting 6600 this week, which I could close my 6600 long at b/e and close my 6550 for 50, while leaving my 6530 running. My plan has gone a bit lob sided at the minute. Interested in the views of other people who go on this blog who hold medium term long positions such as Javied and Ahwab?

  9. I have closed my longs – the FTSE is showing no ability to rally sustainably, rather it is getting the heby-gebies about tapering again so I want to keep my powder dry until I see a clear trend reversal. Was lulled into thinking that had happened last Friday though couldn’t for the life of me understand why the market had seen the US figures as good news – that was just a ploy in hindsight but now normal service has been resumed ! Should really go short but not sure now is the time to do this. Either way its going to be interesting in the next two weeks.

    1. So soon, it’s not even The Christmas yet. Too early to go imho. You’ll miss the rally. If the rally gonna be anyway. LOL

  12. Bit the bullet, took a HUGE loss. 50% of my capital gone. Atleast I admit it. Well done FTSE you won this round. This blog feels like its turning into a blood bath. Everyone long, everyone getting stopped out.

    1. unlucky mate, but atleast u did the right thing taking the loss (i hope it was the right thing 🙂 ).
      U got enough capital…if u could lose 50% then pretty sure u can also make it! Have patience and treat ur next trade as the last trade of ur life, so plan and time it perfectly!
      GOODLUCK!

      1. Thank you for that Hashmash. Yes, atleast I will learn from this trade. I could have held it longer if I wanted, but in the current market, it might just eat my money away and i’d be left with nothing. Better to bite the bullet, regroup and try again than be wiped out, or worse, get into debt.

        1. Don’t worry, you are not the only one who lost this year. I lost 500 pounds since August, however I gained those 500 pounds at the beginning of the year up to that August. Hello b/e experience. Back to my deposit.
          Following good people normally helps. I followed mahmoud, but he doesn’t come here anymore, very sad. I lost what I gained after he’s gone.

  14. I stand by the theory of “never add to a losing position”…but the temptation is right there. Especially when it hit those low 40’s.

  15. I am looking to close shorts at 6400, depending on how market reacts… and to build small longs at 6350..again depending how market reacts.. this is just my future game plan.

  18. DOw is holding and SPX also. We open with gap down. I think this are the last cartridges of the bears

    1. <let's see the daily candle close. But I think this gap down shows that we are at final deep

    2. i think a bit more to come..from today till 17th atleast i think there will be more bears than bull…18th after feds meeting thats when bulls start to run..the reason why im putting high probability to this is because of collecting what others have been saying that tapering wont happen…if tapering wont happen and markets are dropping in fear of it … they will bounce hard, as we have seen previously.
      The best one i cant remember who mentioned here was if they taper in Dec its crazy as liquidty will be low as well causing dramatic drops.
      If we reach 6350 (where i plan to long), then within a couple days after fed releases no tapering we will be back at 6500 easily.
      I am saying all this doesnt mean i am going to put my orders in right now…im going to wait for the market/indicator to show some signs

        1. And to be honest the real fundamentals don’t support market at those levels….Just remember, whatever goes up has to, eventually come down…

          1. well with ur anaology, ur saying ftse will come back down to say 0, and eventually become non-existent? Because it wasnt there always now was it?
            What ur saying is purely “anchoring”, if ftse treats to levels we saw just after 2008 then that means we are in the middle of a financial crisis again.

  20. with hashmash on this one see dow at 15600 and snp at 1750 anything under those figures is time to go long.

  21. SO it seems Santa rally as everyone was hoping for is gone. It would be the 1st time in more than 10 years.

  22. we are going to visit the bottom of broadening wedge around the 6330-6350 area. That trend line didn’t work out.

      1. lol if everyone starts buying at 6350 most likely i wont be..no offence to anyone, i just know that when most people stay on 1 side, taking options position sentiment into consideration my indicator kinda uses it to indicate the direction i should be betting.

      2. But if this is a fact, why I do not close now and buy there ?
        Well, because we may have a bounce here. Besides bein oversold area like last week we may have a bullish divergence with RSI

        1. People need to understand RSI works 2 ways..majority know below 20/30 means oversold…but being at the level for a period of time also indicates a strong BEAR!

  24. Well you cannot blame the miners like Rio Tinto for the big ftse drop today..so who IS/ARE responsible for shedding the points? Who is/are the culprits? 🙂

  26. My forex trade is flat still….time to dip into the ftse..small long…£5pp…aiming for 30-40 intraday DCB…strange?? Wall Street futures holding..only down 21 at 11.50am…will have to scan news wires for explanation for ftse drop…I already know it is going to be bullshit! 🙂

  27. Why Nick always wants to hold something? Why not let it go down, for example? And say Today It Will Go DOWN and WILL NOT HOLD.

  29. hashmash I will add more confusing to your signals and go short at 6465 and close my long 😀

    1. I too am still holding my long.

      Refused to average down…however I may accept defeat soon and take a small loss, as I feel the slaughter could continue.

  33. that dip to 6434 was so close to stopping me out some..phew still long from 6477 tho..and to think it was only yesterday i was short from 6552 🙂

  34. I was looking at different instruments and everything today is red.
    the euro/usd is hitting a top trendline.

  35. Closed my shorts at 6440 today. £4 per point from 6810, £5 per point from 6680, and £5 per point on the DOW from 16080.

    I was in two minds as to whether I should close them or not. Think we might test 6330 again so I had to weight up the risk of making another £1,400 or losing my profits on a Santa Claus rally.

    2. My kind of trader. Sensible stakes, great entries and longer view.

      Very refreshing after some of the utter BS that has been posted recently

  37. If we have a hammer today at close with that gap down below the 200 ma. >Fasten your seat belts 😀

    1. Yes…expected purchase size today is $3-$4bn..type in google fed pomo schedule..should get newyorkfed.org…lists dates and size..published every month…done at 3.15pm GMT onwards for about 30 mins if I recall correctly…

  48. Still short from 6475, just topped up short at 6465, going into the last 30 mins..
    Long of Dax and CAC as they seem to follow the US futures..

  50. Even though i’ve taken a big loss, glad I got out when I did, what an ugly close. No reversal in sight

    1. for me 6350 is the key area..im holding short still…18th dec is the day where im going to take a reasonable size gamble before the fed meeting (gona close short n go long)…i really hope by then we are at 6300-6350

  55. If we hit the 6350 level Hashmash….we have not moved at all since 3rd week of Jan this year!! I remember 6365 area well…got liquidated…lost my shirt shorting from 6000 in New Year!!

  57. Whatever happened to the market pricing in? At 6500 I thought this had happened although the market likes to over extend either way. Still long and doing all I can not to add!

  58. Lol…We have been hearing for the last 6 months…(since the big May sell off from 6900 to 6000 on taper fears)…that tapering is NOW priced in..this was back in May/June…we then rallied back to near 6800 from 6000…now it’s December…lol…every other week it is supposed to be priced in…like last Friday…NFP 200 Dow rally…said tapering is NOT ‘tightening’ and a strong robust economy as indicated by recent economic data can withstand tapering…like just last Friday..lol…:-)

  59. Lol…We have been hearing for the last 6 months…(since the big May sell off from 6900 to 6000 on taper fears)…that tapering is NOW priced in..this was back in May/June…we then rallied back to near 6800 from 6000…now it’s 3December…lol…every other week it is supposed to be priced in…like last Friday…NFP 200 Dow rally…said tapering is NOT ‘tightening’ and a strong robust economy as indicated by recent economic data can withstand tapering…like just last Friday..lol…:-) Santa rally??

    2. I’m with you. I already posted something like that. I cannot figure out this thing with Taper/press/media.
      If we take a step aside of all that, we look at the charts and see how damage they are becoming day by day and this is what bothers me.
      And I do not think 18th or any other date is important.
      For me is when enough is enough, time to take another direction and this will come unexpected.
      Markets are like donkeys with that thing in their eyes, they only look in one direction until they are forced to look to another way.

  60. What do you expect if EMAs are positioned downwards and nothing you can do to stop it, until it reached the bottom and still it won’t go straight up, all longs will be cut by shorts until we see stabilization. The only regret is not getting into this Santa upside-down rally.

  61. PMS Trader: Other direction will come when ‘THEY’ decide they have made a killing on their shorts and invariably by screwing the retail investor over and booking their profits and then making money AGAIN by going long…just look at Hashmash he is adopting the big boy’s strategy…short all the way up to 6350 level…then BIG longs from there…I think Hashmash is single-handedly forcing the market down with his shorts…he is now batting for the other side…a mini hedge fund all by himself!!! 🙂

    1. well tomorrow I expect some kind of bounce to exit my long with at least some kind of f*** profit. That f** gap is there to be eaten.

      You hear me Hashmash 😀 ?

      1. lool how much of a bounce…i was drawn back 50% of profits on pullbacks and yet stood strong 🙂
        But i am still expecting more drop to come…hey if im wrong, i still make money (just depends how long it takes me to realize bulls are back).
        Like i said, 18th dec is the day to keep an eye on…i cant say much now apart from go on my understanding (that tapering is NOT happening), but have to wait to see what indicators are showing.

    2. LOL wish i was a hedge fund, want to own one eventually..something small not crazy for a hobby…with 1 investor and that be me hahaha.
      But yeah believe it or not most hedge funds strugglign right now to make money.
      I know the top 4 in britain are all down, and have been for a couple years now (i know it cus i worked for the biggest one 😛 )

  62. Posted sell signals for S&P 500, Dow, FTSE and DAX Tuesday pm. FTSE has now fallen below the lower bound of the falling ϵ-channel from (as ever) 30 Oct. and the down-gradient has intensified. I have no idea where it ends up. 6300 or thereabouts within reasonable expectation I think

    1. my indicators have gone “ULTRA” bearish on ftse, then again it might not be as trustworthy due to the big fall in ftse..however for my indicators to return to neutral on ftse we need a 200-300 point jump roughly or a drop (EXTREMELY LARGE, or slowly with high vol).
      Sooo even though im sayign im looking at 6350 myself, most likely my indicator will still show bearish signal, the only reason im saying that 6350 is nice place to long small is because we are too close to fed meeting.
      So i am really in a pickle, should i go on my indicators OR take the gamble on fed meeting (most likely id do the latter).
      And I am expecting a mini financial crisis mid next year (dont ask me how i know because my reasoning will just embarass me)

  64. Thinking of getting a bank loan to take advantage of bulls after the 18th!
    Think that bulls will appear unless there is a 20 billion cutback of tapering

    1. lol people said that about 6600 a couple days ago, then 6550 then 6500 then 6470…
      I dont think this is the bottom for now, i wudnt risk money on it, u can easily see it slide 40+ points tomorrow 🙂 at the same time see +40 upward move, but at the end of the day I think we are seeing sub 6400.

  66. Everyone talks about Xmas rally. Not sure how many of you have been trading for longer than a year, but the so called Xmas rally for, not last year, but the year before (2011) started on december 20th. Everyone talks about the “Xmas rally” every year, but reality is, it starts and ends at different times every year and you would be a fool to think “it’s December, time to rally”. Some years it starts November, some December some not at all.

    GLA

    1. I think you are right. All this talk about the rally and the necessity of it to happen distract from what is actually happening. It’s like The rally should happen so I will be long just in case. Something similar happens on Tuesdays when high dividends get paid out, everybody is taking longs. This caused misjudgement and wrong trades.

      1. It’s the same every year. When I first heard these talks about “The Rally” I was thinking that every Rally I’ve been in December a couple of years ago was that Christmas Rally. Who actually identified once the ACTUALLY CHRISTMAS RALLY? I tried it once and it’s a waste of time. Every bull move in December felt like that Rally. It’s all for the minds. Bull….t. There’s no Christmas rally or whatever, there are bull and bear moves and charts.

  67. Hey guys interesting pattern on sp500. Ive seen this before a sharp drop from top of range (1810) to bottom (1775) leading to a violent upside breakout target 1845… The quicker it falls across a range the more violent the rebound can be…we will see.. Im long sp…

    1. 2 rules have been activated with todays close in VIX.
      Now tomorrow need a daily candle close below today and we have 50/100 points up in SPX

  68. No tapering in December will cause I mini bull run, all this selling off due to taper fears is just pure bullshit!! Big boy playing games.

  70. A bit of a heads up…keep your eyes open for the signal to short Twitter soon…just breached $55.30 today…on IPO hit past $50 mark..got shorted to I think below $40…since then a massive $15 rise to $55.31….

  71. Thats why i kept saying stop being soo anchored on xmas rally.. if it really was there n easily predictable.. mate im telling u id have a mega yatch.. couple penthouses all over world lol cus all id do is trade once a yesr 100000000k a point lool.
    We need to keep remindin ourselves the basics.. no such thing as a free lunch.. unless u hft and have big relationships with rhe exchnage that they push u forward in order queues during open n close.

      1. Rol, support and resistance levels are to be a given a very ‘WIDE BERTH’ when trading the DOW, with such elevated levels as 16000+

        Instead Rol, stick to the FTSE, as it has fallen a lot more and does not have that much left to fall, otherwise all of the year’s gain will have gone!

        If you are not aware, summary (from memory): Dow rose from 12800 Xmas last year to hit high of 16150 approximately, FTSE 5900 and 6900 respectively, so on a common sense basis and for extrapolating trading tips, stick to the FTSE!!

        Think about it, even if FTSE fell another 400 points now to 6000, a worst case scenario (a lottery win for Hashmash), at least you know where the ‘bottom’ is. A 400 point drop now from 14750 inthe DOW, translates to 14350, still a long way from 12800, from where we sort of started!!

        So with DOW if you trade it and it drops 400 points, you will lose your shirt, with the FTSE, it will almost certainly be the bottom, and you will keep your shirt, albeit, a very sweaty one!! So from this analysis, hope you trade well, whatever you do!! 😉

        1. Also of crucial importance is your stake per point Rol..if it’s £2pp in Dow then a 400 point drop translates to £800…bearable, at £15, huge £6000, AND this assumes you resist the temptation and don’t average down..

          Look at today, FTSE tanked, I traded just £5pp and banked 30 points or so from 6440, sold at 6470, when I typed breakout in the afternoon. If it fell further, to say 6400, I was ready to average down again at £5pp…sensible averaging down…and would have monitored it for a few days to see if the fall stabilised or not before probably closing some of the position. You try that with say £100pp..suicide!!

  73. No change of sentiment view still stands i was just looking at the close and it didnt look supportive …
    Pattern im talking about is as seen around dec19th 1929 prior to big spike up before jan 14th crash…!

  75. I usually have a 70% bias towards short positions by inclination.

    Can’t wait for the crash…’WHEN’ it actually happens!! 😉 Leg down is quicker, more violent, and easier to see on the charts and trade!

  76. Lol..just saw Sports Direct took a hammering today..dropped some 13% today, despite announcing a 17% increase in underlying profits!! Will monitor it for a possible DCB…

  78. Got one ‘flag’ 🙂 today (just the one indicator) to SHORT the DAX… hmm 🙂 Worth keeping an eye on since the DAX has gained before on opening (like today) in the past couple of days only to suddenly fall sharply 🙂

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