6525, 6500, 6479 Support, 6560, 6568, 6590, 6608, 6639 Resistance

Good morning. A fairly decent day with the initial dip of the 6485 level, along with that gold trade too from 1220 to 1207. As you know the Fed minutes were released last night and put a rocket under everything, on the assumption that interest rates would remain low longer on continued economic weakness. The FTSE has nearly reached the top of the 20 day Bianca channel at 6560 over night, and there is initial resistance there, though today could well see a follow up move to push a bit higher.

Asia Overnight from Bloomberg
Asian stocks rose for a third day this week as Federal Reserve concerns over a global economic slowdown spurred bets that U.S. interest rates will remain low.

The MSCI Asia Pacific Index (MXAP) gained 0.5 percent to 138.81 as of 9:02 a.m. in Tokyo, before markets open in Hong Kong and China. Futures on the Standard & Poor’s 500 Index slid 0.1 percent after the underlying gauge yesterday surged the most this year. Slowing global growth and a stronger dollar pose potential risks to the U.S. outlook, Fed policy makers said at their September meeting, according to the minutes released yesterday.

“Minutes of the September Fed meeting acted like a steroid,” said Matthew Sherwood, head of investment markets research at Perpetual Ltd. in Sydney, which manages about $29 billion. They “seemed to suggest that U.S. rates could remain highly accommodative for longer than initially expected if global demand remained weaker than expected.”

Japan’s Topix index added 0.4 percent. New Zealand’s NZX 50 Index gained 0.1 percent. Markets in South Korea are closed for a holiday.

Australia’s S&P/ASX 200 Index rose 1.2 percent. Employers probably added 15,500 workers in September, after an increase of 32,100 in August, according to economists surveyed by Bloomberg before jobs data due today. The August employment report was revised yesterday, with the government statistician dropping the seasonally adjusted figure — which showed a record gain in the month — in favor of the raw data.

Fed Officials Saw Global Slowdown Among Risks to Outlook
Federal Reserve policy makers last month worried that slowing global growth and a stronger dollar posed risks to the U.S. economy as they decided to maintain a pledge to keep interest rates low for a “considerable time.”

A number of officials said the U.S. expansion “might be slower than they expected if foreign economic growth came in weaker than anticipated,” according to minutes of the Sept. 16-17 Federal Open Market Committee meeting released today in Washington.

The minutes highlight growing concern among policy makers who say further gains in the dollar could hurt exports and damp inflation, which has undershot the Fed’s goal for more than two years.

FTSE Outlook

FTSE 100 Prediction
FTSE 100 Prediction

We are virtually testing the top of the 20 day Bianca channel at 6560 though I expect this to break and 6568/72 is a small resistance after that. The top of the Raffs could well be in play today at 6590 and 6606. The 25ema on the daily chart is 6639 – if it were to get that high then a short here might well be worthwhile for any further dip in this downtrend. A move above 6560 does invalidate the drop potentials for the moment, certainly for a major drop anyway. As I mentioned yesterday I still think October will end fairly positively and higher that we have seen this week! Todays pivot is at a fairly useless 6479 – I doubt it will dip that low today, but stranger things have happened. You often hear about gap closes – with the FTSE looking at opening around 6555 then it might well dip initially towards yesterdays close level at 6482 (coinciding with a dip to the pivot), however I don’t think it will drop that far this morning!

163 Comments

  1. Morning all. What are everyone’s views this morning?

    Personally the only way i see it is down?! I don’t know how it’s even still up here? Surely everyone’s woken up this morning and thought woah and gone short?

    Fed said next interest rate rise is “data dependent”. It was ridiculous to rally on that because it isn’t news of course interest rate moves are data dependent…

    Ridiculous rally IMO. Interest rates will only stay low for longer if growth is low which is not bullish at all? After such a bull market more growth will be needed to keep it going.

    Rant over…

    1. FTSE rally is nothing. Have you seen Dow? This is where to worry about. Strong bullish response. Daily from mid September looks rather choppy, one day up candle another day down candle. It looks rather bullish atm.

      1. We sell on strength buy on weakness. When things steadying up we are bears waiting for the next fall.

    2. Morning All – Gone Long 6497 Tgt 6517 30 MA/5 Min
      ( I have some Shorts running as well – running Sub 6500 – so if this falls away (as it is!) – I’ll make a decision at some stage)

  2. It’s was a far more dovish report than expected plus markets were oversold personally think these markets will rise further today, on the sidelines apart from my dax trade.

  3. PMS – This is for you.
    Link to Manual
    https://www.prorealtime.com/en/pdf/probacktest.pdf
    Programming in ProBuilder language
    We advise you to read the manual concerning how to program indicators in ProBuilder
    This section details the ProBuilder commands that are specific to trading systems.
    ProBuilder is the programming language used In the workstation. It is very simple to use and offers many possibilities. Some important principles of ProBuilder are:
    The calculations are done at the end of each bar.
    ProBuilder programs including trading systems and all of their functions are evaluated at the end of each bar from the beginning to the end.
    All instructions to place orders are triggered after calculations on the current candlestick are finished (meaning the orders will be executed at the open of the next candlestick at the earliest).

    1. Thanks Hugh. THat’s from I started…
      I already passed that.
      Hugh, did you read any of my posts ?
      You say that trading in smaller time frames is better ?
      Did you understood the flawless ?
      It means software does not read tick by tick. The best advice would be then to trade tick by tick

      But as I said I already passed that. I’m working only in the long versus short…no stops, no targets, no trails…

  4. Morning Hugh, MLawrence, Jack2 & smokingaces & ofcourse Nick

    Still here guys
    But sorry to say – So far – Software has given no signals.
    So probably suggesting sideways movement

  5. wow got beaten up bad on my shorts can see 6600 then more down side
    what the hell is keeping this up its madness i tell you madness 🙂

  6. Hi PMS —
    I need a lot more testing before I venture into Automatic Trading. Yesterday would have tested my nerve! I think though that I’ll be able to run the backtest in an unlinked screen, allowing me to get on with other things. There is an issue which I need to look at further: I copied the code of an optimised backtest to a new backtest and then replaced the variables to be optimised with the latest set of fixed, optimised values of the variables. I expected of course to get precisely the same Equity Curve in the new situation as obtained previously, instead of which I got something vastly different. Disconcerting — I’ll look at this again. I am working with short timeframes at the moment but I’m interested in longer ones too.

    1. Hi Jim

      If I understood what you are trying to do :

      1st – You may need to place the new optimizer variables in the indicators chart .
      2nd- then run a new backtest optimizer with a new range of variables

      1. When I do the 1st part, I get exactly the same report as the one in the Optimizer backtest

      2. Hi PMS —
        The optimiser produces a set of values for listed variables. I wanted (for various reasons) to take these values and put them in a non-optimising, but otherwise identical backtest. I expected to obtain identical results but didn’t — I need to look at that further.

        1. But the list is long. Are you using the all list ?
          Only the 1st in the list is taken in account on the report

    2. I didn’t get a courage to take this short on Dow.
      FTSE is doing rather well. Soon it’ll get to “impossible” pivot at this rate. Hope it reverses.

  8. RentalCollection —
    I’m running the model using a data frequency of 100 ticks and data from 07:00 on 07/10. It has done a little hunting this morning but nothing wild. Last recommendation was SELL @ 6528, which has pushed the equity curve up to ≈ +150 points for the period. Trading is allowed only between the hours of 7 am and 9 pm. The EC stood at about +125 @ 8 am this morning. For various reasons, every other day for me is disrupted and this is one such, but I’ll do my best.

      1. It’s a standard option in the timeframe options drop-down list to the left of the indicators button in the margin of chart screens.

    2. That’s a bigger problem in smaller time frames. And if you use the data starting from the much older one, you will have EC at negative side.
      The longer time frames give better performance.

      But in this kind of trade (no targets, no stops, etc) you need to exit at the top of the EC. That’s the strategy

  12. I didn’t get a courage to take this short on Dow.
    FTSE is doing rather well. Soon it’ll get to “impossible” pivot at this rate. Hope it reverses.

  13. Worryingly DOW yesterday had 65% long now @40%, though that isn’t the case for DAX and ftse so the balance has tipped to long for DOW but not for the others? Personally think DAX/ftse will come down a bit later but not to reach further lows…

      1. I feel FTSE will continue to fall until Wall Street opens. I wish i stuck to my guns and didn’t close so early. Wall Street might then continue to have a small rally taking FTSE with it and then when strong we’re sellers again so another dip.

        That being said will Wall Street also feel the rally was ridiculous and take profit? Or will some buy the dip to keep it rising?

        Either way over analysing… Stick to system regardless.

  14. Morning All – Gone Long 6497 Tgt 6517 30 MA/5 Min
    ( I have some Shorts running as well – running Sub 6500 – so if this falls away (as it is!) – I’ll make a decision at some stage)

  18. Jim

    FTSE is the best instrument to study a sideline market.
    DOW, DAX gave me positive EC since older historic data without any exit from positions.
    FTSE never move above the EC line.
    For me a sideline market is the ultimate battle. If you beat a sideline market, you will be fine for everything else.

    I already tested a dead cat bounce on DAX, DOW and SPX and all done great job
    FTSE am working (gave me a lag signal). This instrument is the worst performer from all the others

  20. No Sam, I’m very limited time wise so can’t day trade so I’m taking a leaf out of javed’s book and going for the long haul.

    1. you could have take some profit, now its back where you traded. Am looking to buy DAX for a ‘Javed-type’ below 9000.

    1. Yep and this time on the right side of the argument! Short 9110 and just thinking about closing it before the US open. If she goes near 9000 or under I will go long again. Feel on top of this again now.

  22. Remember to look at the previous days high, low & close. In my view today open is very much likely to be the top especially as i said it seemed a ridiculous rally and opened 50 points higher than the close (v easy to say now though..)?!
    And yesterdays bottom was say 50 – will it really break that? And if so will it go much further after already falling about 100 points?

    1. Dow pivot will be soon touched. Maybe will hold? It was slow drop on Dow and pivot miles away.

    1. Did you long at 6455? Tempting to think there will be a little bounce now its spooked everyone. Dax below 9000 isn’t good though

      1. I suppose a little bit Hugh – don’t knock it till you’ve tried it aye. It is good to come here and reassuring when my prices are close to you guys.

  27. Down over 100 now from this mornings high… wowsers! That bullshit rally last night didn’t last long eh?

    1. Yeah long @85 and @55 Nick – not sure how to play it though. Sell a few points into the rally or look for a strong bounce? It’s already dropped over 100 points which is why i feel it should hold around yesterdays low? Others might have the mentality of selling into the rallies though?
      I might look for just a few points to bring my bull at 85 down and go from there.
      I see other markets being weak as a good thing – buy on weakness sell on strength. If they were strong i’d be worried.

      1. I also went short @00 @15 @35. I’m just saying personally i don’t like it. If it brings you success then great! Never know i might take it up in the near future.

        PMS didn’t you go short before the minutes were announced – must have been sweating a little bit? 😉

        1. Not so. Dow gave me a sell signal at 16972 Oct.6.
          So it reversed long at 16797… giving me 175 points.
          In the other you could have stopped the auto trade much lower with a higher EC for a week target-

      2. Meanwhile DOW gave me a buy signal yesterday at 16797 and still did not told me to reverse.

        FTSE as a sideline market, lagging a bit more, but even so it would been a good place to catch a bunch of points.

        1. Agreed PMS – what are your views for this afternoon and what is the software saying? Wall Street a bit stronger now so could dip (especially waking up seeing the FTSE!) Or will the rally continue from yesterday? S&P’s push towards 1980 before a dip?

  30. You could have even gone short before the minutes were announced just like the Scottish vote. Yeah there will be a rally but you can be sure it will come down after and if it were bad news even better.

  31. Closed Shorts at 6455
    ADX Indicator one of the highest readings @42
    Last seen in May
    And also end of July 2011

    1. Short it. News is no what rules markets and with IS on the door step of Turkey and Ebola that will drive the markets down further. This till earnings reports take over next week and then a potential QE in Europe which could boost markets in weeks ahead. Who knows..:-)

  34. Closed long @55 – @70

    15 points brings my bull @85 down to @70

    Next price 35-85. (Unless the yanks give us a nice rally and i’ll hold on)

    1. this with a optimizer since start October. With the older settings. The signal did not appeared yet. Still long

  39. Oh well, scalp worked out, 53 points, consider day done, possible missing out on a great op. but better get when i get. who knows how pivot would work – through or reject.

  40. With some improvements… DAX and FTSE still in sell since Oct.1

    DAX in +-9180 and FTSE +-6560 will reverse signals I think. For now nothing to report

    DOW and SPX gave some dead cat bounces, but both, my system beat the market.

    DOW is again in sell, since my last post and SPX not yet.
    SPX still in buy mode from 1957, yesterday

    1. No Jack, I was stopped out @ 75 earlier. Today is not my day. This month is going worse day by day.

  44. I was greedy – again and missed 85 and 90. So instead of closing for profit i’m now long of 2. Should have been happy with my weeks work and kept out of it. Wall street strong so being sold. Should see a rally later on though?

  45. Sorry., the parameters were not right at SPX. 1943 buy yesterday.
    Sell was made at 1958 today

    1. I could at exited in the profit of the last sell at 1958… for a week target or remain in the market and go for a possible new leg down.
      As I mentioned earlier the sideline market is something I do not tested yet in real time.
      Because of that I’m still in Backtest , waiting for those sidelines markets and indecisions., to see the performance of the signals

      1. The two dead cat bounces, my system beat the market. SO we could say with 60% that future dead cat bounces could be profitable.
        The trend market is the easy one.
        So now waiting for the sideline market

  48. As always you exited when a week or month target is reach, or major supports/resistances are hit.
    Even it’s an auto trade, you can stop the trade at anytime in possible top of an equity curve or use the manual trade and buy/sell in the next signal

  51. Hi Guys

    Could not post earlier signals, out of my desk
    New Buy Signal at 6412 & 6405

      1. Jim

        Sell @10.15 6530 Target 6493 & 6449
        Buy @ 6449 Target 6478 & 6493
        Sell @ 6493 Tagret 6422 & 6412
        Buy now 6405 & 12 Target 6450 & 78

      2. Jim

        Yes –
        Sell at 10.15 6530 target 6493 6449
        buy 6499 tagret 6478 & 6493
        sell at 6493 target 6422 and 6412
        now buy 6412 / 6405 target 6462 & 6478

  56. Long of a couple but do we have much to worry about down here? Looks like it could hit the low for the year. Wall street will be low and weak so we buy – could lead to a great Friday bull run tomorrow?

  61. Now will take a rest and see the performance for at least a month. Starting Oct.1

    Had been crazy days…not sleeping enough

    Besides that I’m tempted to place a long on FTSE, at 6396-6356
    That’s will go against my system, which in on sell mode in FTSE, but until I have the system work I will be still in the manual mode

  63. And one last problem. When switching to auto trade, that is a puzzle still.
    It needs to be in a trend reversal or something like from yesterday to today.
    I do not want the system to place a short order at this levels.

    1. I may stick with the manual trade and place positions as they come. Not sure yet on that

  72. Bought at 6395,4. Stop at b/e. Saw some strong buy in SPX. But have my doubts still. will see

  75. Jim
    One thing we must do, is to update the variables at least, end of each week, depending on time frame. I’m using the 1 hour

  78. Morning all, what a roller coaster this is. Turned my DAX long into a short at 8930, lost 35 points in the process but sentiment seems to have really turned and you would struggle to find good news for Europe ahead. Am still long FTSE at 6112 so pretty buggerd on that one. My thinking is it might go to 6350 or 6300 at which point I will double up to catch a bounce. But worries though the tanks are going to test the S&p 1900 level and if they do it means anything from 5-10% correction possibly. Anyway it will be an interesting Friday that is for sure. To bad I have a day job…

    1. Hi Dutch
      I’m scratching my head a little as well ! I’m looking for 6586 to square up.
      We were around there 5 days ago.
      – FTSE Touch 6318 overnight ..
      – Mr.Top Step mentioned 1880 (1894 on the charts) area on S&P couple of days ago.

      Summary
      S&P Support 1894 (8Aug14)
      ……1924 (23.6% Retracement Line)
      …….Currently 1933
      DOW 16262 Support (8Aug14)
      …….16523 (23.6% Retracement Line)
      Currently 16695
      EU Stocks 50 2974 (8Aug14)
      ….3052 (23.6% Retracement Line
      ….The stocks based last night at 3000

  81. PMS — Yes, I think frequent tuning of vars. is a good idea! The shorter the timeframe, the more frequent retuning.

  82. FTSE/5 mins. — I have a BUY in the wee small hours, which should not be there, but never mind. No new trades since then — system doing well with the latter. A bit more uplift expected, against a fierce downward 4 hr. trend.

  83. Lot of news in the media saying stock market ready too crash or major correction! Time too start buying then… Should imagine that lots of retail investor have dump stock at a loss by now

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