6550 resistance, 6460 support

Good morning. What a day yesterday, when the price hit the 6642 area I mentioned and thought it was a short it all looked pretty risky after a strong climb at the open. Oh what a false prophecy that was! My 6615 short first thing got stopped (which was fortunately quite tight so minimal damage) but was just a bit early shorting there. We then had some serious drops getting as low as 6488 out of hours yesterday. It all felt quite risky placing the trades at the time but that short and the later long paid off, just a bit gutting I closed the short when I did! C’est la vie!  Of course most of the movement yesterday was down to the Fed as I am sure you know, who have cut QE by a further $10 billion per month. no real surprises there, and one could argue that by tapering they have faith in the recovery and economic strength. It has sent emerging markets into a tailspin though!

Asia Overnight from Bloomberg

Asian stocks fell for the fifth time in six days after the Federal Reserve pressed on with cuts to U.S. economic stimulus and as a report showed China’s manufacturing industry contracted.

The MSCI Asia Pacific Index lost 1.6 percent to 134.54 as of 12:23 p.m. in Hong Kong, with all 10 industry groups on the gauge falling. The measure has dropped 4.8 percent in January, on course for the biggest monthly slump since May as part of a global equities rout sparked by weaker-than-expected economic data from China and a sell-off in emerging-market currencies.

“Given the likelihood of continued Fed tapering in the period ahead, there appears little doubt that long emerging market positions are likely to be subjected to near-term pressure,” Matthew Sherwood, Sydney-based head of investment markets research at Perpetual Ltd., which manages about $25 billion, said in an e-mail, referring to bets on gains in developing-nation assets. “What we are seeing at present is a global re-pricing of risk.”

USA

The Fed cut the pace of monthly bond buying for a second straight meeting, saying it will reduce purchases by another $10 billion to $65 billion, sticking to a plan for a gradual withdrawal from its unprecedented monetary easing. The central bank left unchanged its statement that it will probably hold its target interest rate near zero “well past the time” that the unemployment rate falls below 6.5 percent.

U.S. stocks sank yesterday as earnings forecasts from Yahoo! Inc. and AT&T Inc. disappointed investors. Yahoo slumped 8.7 percent as its sales outlook signaled slowing growth for the Internet company. Boeing Co. retreated 5.3 percent and AT&T lost 1.2 percent after forecasts trailed some analysts’ estimates. The S&P 500 sank 1 percent for its lowest close since Nov. 12. Futures on the measure gained 0.2 percent today.

China Manufacturing

The final reading on HSBC Holdings Plc and Markit Economics Ltd.’s January purchasing managers’ index for Chinese manufacturing was 49.5, the first contraction in six months. Readings below 50 indicate contraction.

FTSE Outlook

FTSE 100 prediction
FTSE 100 prediction

I think the FTSE is going to test the daily pivot at 6557 area initially today before a drop back to test the support area at 6480/90 where we have a weak rising 30 minute channel. There is the bottom of the 20 day Bianca channel currently at 6514 which has been tested and broken quite a few times this week, though we are currently seeing quite volatile sessions. There is the bottom of the 10 day at 6429 though I don’t think we will get that low today. 6460 might be the bottom today and a decent area to go long.

I got the dip and rise scenario wrong yesterday, as it was rise then dip, however today I think we will get rise dip rise!

The main supports to watch are 6484 and 6460, whilst resistance at 6550/60.

61 Comments

    1. as in since the fed has tapered indicating confidence in the us economy-so im saying imo it looks as though all eyes will be on employment data/earnings etc- or wat do you think

      1. You would think that, but….you have to remember that if the market react in the opposite way than it should, all the like of Bloomberg, CNBC and the big boys will ALAYS find reason which will make sense to them, to why!! They even will try to tell us that we should think the same…lol

  5. Agree as mentioned previously 6460 is my level for a medium term long (3 months). Probably won’t get hit today – more likely tomorrow or next week – but who can tell in these volatile markets?

  7. Markets knew about the tapering before they started this fall. So by the time it was announced there was no more forces left to continue this fall.

    1. f***** markets versus news. Taper was announced last month to start every meeting. Since then markets gone up. Sure markets knew it. I knew it. Who did not knew it ? Dumbs of course who going short with that wrong idea.
      Markets gone down on profit taking/correction.

      2. Just because u say u “knew it”, doesnt mean you did, actually you didnt know…if you did then you either have psychic powers beyond this realm or are an insider.
        How can you know something which no one knows?

        We can have views, but to say that you knew is incorrect.

        1. You miss understood. I knew it as the markets knew it. If change policy than it would be a surprised for me and markets.
          I posted earlier that, before the FOMC.
          Everything else is for dumbs

          2. Also I expect another new low in SPX today or tomorrow and then short squeeze. SPX made a bullish diverg RSI/PRICE 4 hours. Expect the same in 1 Hour chart, this is why expect another low.
            And that 4 hours charts signals are very dangerous

          3. Mate, you have to understand one thing… there is no more powerful weapon as market sentiment!… forget your daily averages, 1,2,3,4 hour charts or whatever you apply to your trading strategies when sentiment is in play.That is what we had over the past year and even more so now….unfortunately for the time being the consensus and the trend is down…

          4. init, like nothing fking matters, if theres a trend play it, even if ur godly indicator is showing opposite…

        2. Just like your indicator. Is good as yours. Markets have the final word. Just look at a new low in SPX and short squeeze after.

  8. LONG on the FTSE @ 6410 today. Hopefully a decent buy point as we go through February and into March.

  9. short 6530.. original target at 6557 (doesnt look like that will be hitting, plus 6530 looks like resistance since yesterday) even when the announcement was made it was hard for it to break.

    1. Sorry, you have lost me…what is the right idea about taper??? so, when they started to print and the market went up (with disregards for fundamentals) like there was no tomorrow than that was OK but when they slow the printers and the market goes down and adjust asset prices to reality its somehow wrong??
      What planet are you on???

      1. 😀 You still did not understood anything I said. And I write average english which is not my born language.
        You are one of the guys shorting on that ? GL

        1. Obviously I am not the only one who doesn’t understand… English is not my first language either but I don’t have a problem to communicate my thoughts to people and never had anyone coming back to me because they didn’t understand what I was trying to say…lol

  14. I closed all my LONGS from yesterday evening. Big level here. If FTSE 6550 convincingly breaks then we are off… Flat at moment not sure of direction. Anyone else short or is Longs all the way?

  17. i 2x my pos at 6557 closed at 6530 (fuking accidentally did it, was in a meeting looking at my phone, next time i looked and my positions were closed!!! i didnt set a limit!!!).

    1. very fking pissed off…i had an amazing entry.
      sorry mistake above, i had added shit loads 3x at 6560…bringing my average to around 6548…was perfect, and something def fuked up on IG mobile app…it closed my positions

        1. I had 3 positions in total, Main one got closed automatically…i closed the other 2 manually, cus i was like its fked my avg up now…
          im gonna phone em and ask em to restore my 6560 short loooool

  20. … close to re-crossing its 200 dma, once it touches this it rarely pulls back more than 50 points maybe 6500 is the bottom for now 🙂

  21. Looking at my charts (daily and weekly) I can say that you made the lows in FTSE for now. DO not see deeper than this.
    Shorting, looking to close gap tomorrow at open is good strategy, but looks too risky right now for me.

    1. Nevertheless is still good, as we are in short term downtrend.
      I still looking for SPX making new low and short squeeze afterwards
      But markets have the final word.

      1. … Well there so disconnected I think, S&P closes above it weekly start and the ftse is approx 2% down for the week! a big fall in the US is carnage for the Ftse no question

      1. The fact we’re thinking alike shows there is substance in our decisions and therefore likely to pull off 🙂

    1. Right, just like here in UK the traders have 5min after 16.30 to finish off the trades in US they have 15min till 21.15 so lets see…Dow had close after all 56 points lower then the official close, S&P closed 8 points and NASDAQ close 23 points lower…….just tells you how they drag in the retail investors and then dumped their own stock..that was such typical example sale in to the rally…lol

    2. just a good example, Amazon is down in after hours $50, that would make ab. 17% at $354 a pice, last time seen 12/11

      1. check price again! ;-)….crazy moves on google and amazon in after hrs on ig…almost 10000pt swing on google

  27. Does anyone know what dividend adjustment was on Tuesday . IG are telling me there wasn’t one .. Nick said it was 2.1,??

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