6514 support – will it get that low? On resistance at 6590

Good morning. What a perfect day yesterday that followed the prediction to a tee. Based on the emails I got I think most benefitted in some capacity. Only slight regret was closing the long around the 6500 area, only to see the US drag it higher. The trade plan had target 6515 then 6580 so well done anyone that held for both those targets. I wimped out far too early but the analysis was sound in the end! Still, combatting greed is one of the main things in spread betting. Hindsight is a wonderful thing…

Today is of course NFP day (forecast to be 180k vs 74k previously) so its going to be spikey at 13:30 today. Plus its Friday so a day to stay nimble or side-lined.  Pretty bullish in the end yesterday though of course there is now the scenario where we are testing the top of the 20 day Bianca channel at 6604 for today. Looking at the daily Raff’s for FTSE, Dax and S&P below, you could say that we might have climbed a bit far too fast yesterday, as they are all at or near the top of the channels…. Looking at the FTSE I’d say a dip from this area is likely initially (6590 as I write)

Asia Overnight from Bloomberg

Raff Channels
Raff Channels

Asian stocks rose, with the regional benchmark index paring its sixth straight weekly loss, as U.S. jobless claims fell and investors weighed company earnings.

The MSCI Asia Pacific Index added 1.1 percent to 132.95 as of 12:48 p.m. in Tokyo with all 10 industry groups rising. The measure has pared its weekly drop to 1.4 percent.

“Fundamentals still look good and the global economy is expected to grow faster this year than it did last year,” said Stephen Halmarick, Sydney-based head of investment markets research at Colonial First State Global Asset Management, which oversees about A$170 billion ($152 billion). “That’s a positive environment.”

Japan’s Topix (TPX) index rallied 1.7 percent after the yen dropped 0.7 percent against the dollar yesterday. South Korea’s Kospi index added 0.5 percent. Australia’s S&P/ASX 200 Index added 0.6 percent as the nation’s reserve bank raised its economic-growth and inflation forecasts. New Zealand’s NZX 50 Index advanced 0.6 percent as the market reopened following a holiday.

U.S. Futures

Futures on the Standard & Poor’s 500 Index advanced less than 0.1 percent today. The measure rose 1.2 percent yesterday, the biggest rally since Dec. 18, as claims for unemployment benefits fell and earnings from Walt Disney Co. to Akamai Technologies Inc. surpassed estimates.

Initial jobless claims dropped for the first time in three weeks, falling 20,000 to 331,000 in the period ended Feb. 1, according to the Labor Department. The median forecast of economists surveyed by Bloomberg called for a decrease to 335,000.

The Labor Department may report today that U.S. nonfarm payrolls grew by 180,000 last month after a 74,000 gain in December, according to the median forecast of economists surveyed by Bloomberg.

FTSE Outlook

FTSE 100 Prediction
FTSE 100 Prediction

The FTSE is just above the 20 day Raff channel and testing the 10 day as I write. Therefore I’d say that an initial dip from this 6590 area is likely initially, maybe as far down as support at the daily pivot at 6514, though that’s quite a drop I admit. Upside targets while prices remain above 6567 are 6653 and 6730. Lower support is at 6490 then 6432. I wouldn’t be looking to load up large long positions while the price is at the top of the daily channels, though as mentioned above with NFP its going to get spikey anyway.

The EMAs on the 30min chart are still in bullish mode so for any bearish action the price would need to break the 10ema, currently at 6576. There is a narrow 10 minute channel in play with resistance at 6590, and support at 6570.

An initial dip to 6570, if that holds as support then a climb to the 25 daily EMA at 6808 then further downside. We might see some profit taking ahead of the NFP (it wasn’t great last month so might repeat). A day to stay nimble anyway, I am not a big fan of trading too much on Fridays or around NFP – it always seems to behave a bit unpredictably. Its certainly tempering my bullishness the fact that we are testing the top of so many daily channels across the board.

64 Comments

  2. Bad economic numbers out of Germany and UK and the market is up……are we again where bad news is good and good is even better??…lol

  4. Morning all.

    Am pretty new to this and trying to get my head around all of the lingo.

    I’m using IG Index and have seen the markets fluctuate quite a bit this morning. Is this normal for a Friday or is this due to NFP?

    Can you guys suggest any good literature that will help me in my quest to become a day trader?

    Cheers.

  6. I have a short 6580 no idea wht I am should do about it close it at 6550 or 6540 ..
    BTW have set the stop to b/e Any suggestions ?

    1. well depends…is 14 points alot of profit for u (shouldnt be, but have to consider the below scenario)?
      Jobless claims declined, so i guess a positive NFP.
      US showing recovery.
      Last NFP, was incredibly low.
      unless u have a reason to why NFP will be worse, or why the market may drop, only then u wud want to keep ur short.
      High prob u will hit B/E…in that case 14 points is a very good profit :).

      1. Thx
        With NFP data coming am hoping for some profit taking and this going down .. atleast till 1.20 🙂 worst b/e …

  7. Good, stick to the plan.
    I always sacrifice small unrealized profits for massive gains!
    That way ur account balance dnt drop if u were wrong 🙂

  8. The way market is.. doesnt look good at all…my startegy gone back into either a bear or reversing out of bear market.. so kind of hard for me to understand especially when we have nfp to come out aswell.

  13. I missed my planned drop at 13.30 due to shopping, planned to be back before 13.30, didn’t happen. I see everything happened according to my plan: dip and buy the dip (for some people).

    1. Yep managed to catch it at 6540 and now closed out – had orders set 30 points either side of the 13.29 price. Not sure where market going now so no position

    1. Or just another dead cat trap….just like last time when Dow went up 200 points and then few days later lost three time as much…lol

      1. I am still on sidelines – this does have some similarities to what happened early December. 100 or so point rise followed by a new low before the big rise. None of the indexes are giving any clue what they want to do at the moment so could be a dull afternoon

  15. Adam you may be right but with the uncertainty from today over with I am happy to start loading long

  18. Closed 70% of my longs for a very good profit.

    Think that we may drop a little, so will re-enter on Monday.

    Gl all

  19. … If ever you need justification that this market is rigged then it’s today, NFP headline catalyst what a load of tosh, fail to deliver and armeggedon forecast yeah? no fail to deliver and markets rock, sorry but total bullshit wait for the drop it’s going to be big 🙂

    1. Lol, exactly why I closed 70% of my stake.
      Normally I would keep it open for the weekend, but waiting to re-enter on Monday.

      It’s good to play them at their game 😉

  20. … All those experts calling for a minimum 5-10% correction eh! what have they got 2% at best! top banana you’ve gotta love em! the wolves of Wall Street ..lol 🙂

    1. it was 7 % +- in DOW and SPX a bit less.
      Now I think, middle February US will start turning positive for the year

  21. Havies, same here though I feel I sold too early. sold it all and hoping for a small pull back to 6560 to get back in

    1. The thing is, my theory on the DOW remains, if history proves true, then we will have a very slow year on the DOW, which in the current climate the FTSE will follow.
      I don’t see more than 2% growth on the DOW. 17100 top…

      Let’s see what happens.

  23. interesting facts:

    2000 top 2007 top were 20% + –
    2007 top most 20% 17100 + –

    2001 crash were 63% + –
    Crash in 2008 were 120% + –

    In this logic the amplitude of the movement must now be 20% higher than the historical

      1. THE right number would be 136,61% 15310+-
        Curious because this was the area where it bounced.
        We are now again in unknown territory

    1. Meanwhile I made some studies and found interesting things.
      Nevertheless I think we should now turn positive in US indices for the year.
      17000+- the target for this.

      1. And is not 11% from 2007 top, is 16,83% reached end of 2013.
        We need now the 20,83% (17160) as we already left behind the 136,61% (15315) proportion move from the last crashes.

  26. I think monday will be very little movementprob up to 6618 down to 6600 or 6590……….. tuesday down to 6556 6552 this being the btm for now then over the next month up to 6800 6850 falling back sharply again good luck.

  27. Would love the ftse too get back too 6850 and Dax back to 9800 for another long term short made a mint on this last time round.

  30. My personal view has been that the Dow will be pretty flat ( plus or minus 5%) this year from a fundamental perspective and that the FTSE will outperform. I also think we will see 6800 – 6900 by April and then a dip to somewhere between 6338 & 6425.

  32. closed my long at 6600 on fri..
    looking to re-enter long at 6585 (small)
    and 2x more at 6570.
    Expecting a bullish week this week, especially the yellen speech

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