6581 support today (at least initially!)

Good morning. Worked out well yesterday with the rise to the 6685 area then a drop and what a drop, initially it hilt target at 6626, bounced back to 6660 (giving the city boys who missed the initial drop a chance to hop on) before tanking even further to 6570! Certainly turning bearish as expected and should remain that way for the next couple of weeks I feel. The Nasdaq continues its correction as reality hits those overpriced tech shares…. and the rush of recent IPO’s here and in the US is often a precursor to a fall. Some of them have been quite ridiculous on both sides of the Atlantic – even online retailers here valued at many billions (ASOS etc I’m looking at you here) and JustEat to name a few. Still, bubbles are what makes the market and they have always been and always will be. From tulips to tech, property to commodities, nothing ever changes! Next one is bound to be something mundane like banks!

Yesterdays falls were some of the biggest in recent months – the S&P down 2% for the 3rd worst day in 9 months and the Nasdaq’s biggest falls for 2.5 years!

Asia Overnight from Bloomberg
Asian stocks slid, pushing the regional index down the most in three weeks, while emerging-market and commodity currencies weakened as a selloff in technology shares cut demand for riskier assets. Nickel extended its longest rally since 2010.

The MSCI Asia Pacific Index sank 1 percent by 1:58 p.m. in Tokyo, its biggest drop since March 20. Tencent Holdings Ltd., China’s biggest internet company, led declines, followed by Japan’s Softbank Corp. and South Korea’s Samsung Electronics Co. Standard & Poor’s 500 Index futures rose 0.1 percent. The yen held gains as currencies from Australia to Turkey weakened. Nickel climbed a 10th day as the prospect of further sanctions against Russia added to supply concerns.

Information technology and telecommunications stocks led today’s retreat after theNasdaq Composite Index slid the most since 2011 yesterday in the U.S. amid concern that valuations aren’t justified. China’s inflation rate was 2.4 percent in March, while producer prices fell 2.3 percent, close to the 2.2 percent decline predicted by economists surveyed by Bloomberg. India is expected to show faster growth in factory output for February while Germany and Italy issue price data before a U.S. consumer confidence report.

“As market sentiment worsens in the U.S., investors tend to focus on negatives, creating a downward spiral,” said Juichi Wako, a Tokyo-based equity strategist at Nomura Holdings Inc., the nation’s biggest brokerage. “We’re seeing a necessary correction in technology shares.”

China’s Economy
China’s producer-price index retreated following the previous month’s 2 percent drop, as the government seeks to shore up growth with spending on railways and tax relief for small businesses. Data yesterday showed exports from China fell 6.6 percent in March, with economists expecting a gain of 4.8 percent. Imports dropped 11.3 percent after rising 10.1 percent in February.

Germany also reports final inflation numbers for March today, while in the U.S., producer prices and the University of Michigan survey of consumer confidence in April are due.

USA
Claims for U.S. jobless benefits dropped to 300,000 last week, the least than at any time since before the last recession, data showed.

The Dow Jones Internet Composite Index sank 4.2 percent in the U.S. session and the Nasdaq Biotechnology Index plunged 5.6 percent, the most since 2011. Alexion Pharmaceuticals Inc. dropped 7.5 percent, the biggest slump in the S&P 500. The drugmaker, which trades at 101 times reported earnings, has lost 22 percent since closing at a record on Feb. 27.

Alcoa Inc. this week unofficially began the U.S. earnings season, recording quarterly profit that exceeded analysts’ estimates. Earnings for members of the S&P 500 probably climbed 1 percent in the first quarter, analysts now forecast, after anticipating a 6.6 percent increase in January.

Gold
Gold climbed 0.2 percent to $1,320.96 an ounce following a 0.6 percent advance yesterday. The precious metal is headed for a 1.3 percent gain this week, a second weekly climb. Palladium slid 0.4 percent and silver declined 0.1 percent.

FTSE Outlook

FTSE 100 Prediction
FTSE 100 Prediction

Well its all pretty bearish and if the bulls are to maintain any hope they will need to break todays pivot at 6650 which, to be honest going into the weekend is probably unlikely. But then again this is trading we are talking about so you never know! On the downside we are not far off the bottom of the 20 day Raff, though the 10 day being over a shorter time frame has support at 6520. We have the bottom of the 10 day Bianca channel at 6581 so that might provide some early splice for the bulls. Supports after that are 6570 and 6550.

I am going to be quite optimistic to start with an go for an initial bounce as the inevitable bargain hunters swoop in thinking its fallen too far too fast, and then a drop, maybe from 6645/6650 if it were to reach that high (still think that is a bit of a big ask though), but 6620 more likely.

There is a rising 30 minute trend line with support at 6570 so if there was an initial drop that could well be support so I would look to go long there but probably try a half stakes long at 6581 (Bianca channel) first, to target 6620, 6640. Then going into the weekend i think a dip again. I don’t think that 6650 pivot will be broken today so a short there would be worth a go as well.

82 Comments

  1. well i went long 83 this morning, sqeaky bum time now will it bounce at 72.
    looks to me it is going to 50

  2. I close my long out this morning when it couldn’t push back over 6600 (thank goodness) so small loss. Doesn’t seem to be offering any strength this morning – guess where the US market goes will dictate where we head after lunch so probably on sidelines for rest of the day.

    1. Interesting – that’s a lot of what i try to do to get my entries, but on a longer timescale. Daily trend now triggered down this morning on all my measures so i should be selling any rallies now but I am going to wait as its changed direction pretty much every day this week and am reluctant to hold over weekend given the volatility

    1. bounce now from 50 but only short term till us open the down trend to 1820 is a given this afternoon me thinks

  11. JP Morgan a miss which seems to be so far leading to sell off. All very quiet here. Anyone taken any positions or most people on the sidelines?

    1. Still in Short – but buying and selling to make a couple of points.
      JPM just broke lower by a tadge

  12. Dam do I never learn to stay out on a Friday till news hold a loss from going long at 74. Will cut my losses if it dips below 45

  13. All week without trading and today will do the same. Will wait till sunday to look at charts and see where we are in FTSE and DOW. With that mm50 break in SPX yesterday, I think we may go to a dip like start February.
    Cannot see what will happen to FTSE, as the long term trendline is at 6540.
    If this breaks, FTSE goes to a dangerous free fall, without any visible support.
    Can anyone have any idea where FTSE goes if the long term trendline breaks ?
    US markets surely will triggered that

    1. FTSE is my main concern. For the long term I still prefer the long side. But for now is too early, as the timing is for sell.

  17. on a closer inspection at the moment just nicely placed at the btm of long green candle on 30 day just might bounce

  18. Close my ftse short 130 points in profit… Sideline now on this market will take a long from 6500 if we reach that

  23. That’s it, not great set up for short. They dragged it too low before US open. Wasted day

  31. Thanks Jim took a little long on the Dax just now 9265 this is solely based on a gamble…. So will set stops at 9200.

  35. Staying out – my indicators are bearish but I want to see evidence of this two days in a row. Just had chance to update my tracking spreadsheet – track every single trade including costs etc as I suspect many do here – one interesting thing i have started to do is for each swing – the last one up started mid late March – i convert each trade into a weighted number of points based on my maximum position. So for example if i gain 10 points after costs but with 20% in i “bank” 2 points. And then maintain a cumulative number including any losses. So in the current upswing have made between 60-70 points on my full position which I am more than happy about – so it is if I bought at sub 6500 at the current price and held to now. Kind of puts it all into perspective. Its been hard work as the rally hasn’t really got going but when its bouncing all over the place it gives me some reference point as to why I am doing this!

  36. Looks like my long trade has caught
    A great turnarond . Heres hoping we will get to the highs

  39. JIm

    Are you giving me a reality check!!!
    but I do see it going to the highs of today ( really !! )

    1. I think if we break 6500 and hold it next week we could be looking at a decent correction as it will have broken the wave cycle upwards that has pretty much dictated the FTSE movements for 12 months. I hold a number of tech stocks that started to come down 7 weeks ago making March my first down month overall since last May – so only hold 2-3 now as started to pull out of them and the rest ain’t doing too good either. this tech sell off could end but it has the potential to do a bit of a 2000 if it gets any momentum behind it, and drag everything with it. Next few weeks going to be interesting. One of things of using momentum is that whilst when it changes you can lose a bit (so this week it has been very volatile) I find that it means you are on the right side of big movements when they happen. Wondering if the Dow can break 16000 this evening?

  46. I have got in around 6598 and now the index completely smashed to 6530. As the stake was a but high, I just wanted to wait to put a buy around 6510-6520. Hope it works our next week. But very worried:(

      1. If that is the case, that my life is fucked… Best things to do is clean the high bet and shorting futures when it climbs a bit.

        Is this right?

        1. I’m not a pro, but the daily MACD suggests we’re going down for a bit, atleast to 6510, but maybe more?

  47. Im guessing there will be a pullback to at least 6610 before further downside. .its all falling to far too fast. Monday I see being slightly bullish to start off.

  48. 6500 was a solid support last time we went down… Fear is controlling the market at the minute, but in my opinion we will bottom out next week and have another slow grind upwards then another fall think this is going to be how it’s going to be this year.

  49. The weird thing is that all of suden people’s perception changed so fast. I do remember a number of analysts would expect the ftse will stands 6660 points but know everything changed. What about a year projection? BTY, will there be a solid 7100?

  50. I see the FTSE testing the approx 6400 low of the feb and december “bottom’s” …
    i’d expect it to hit 6400 do a dead cat bounce as people put on long positions, drop again to test those longs stops and then start to build ..
    5% retraction from the approx 6900 recent high is 6555 , 10% 6210 .
    i’ll be looking to go long somewhere around 6300 .

    1. I have seen 6400 bottom have been tested for a couple of times but no sign of getting through. The buy pressure must be very high around 6400 level, or even higher 6500 level. So monday will be very strategic, if it shows some revert pattern by the end of day, there will be a strong bull signal. People are just waiting for all earning reports come out. once the fear eases, I mean there are no fundamental reasons to support the index goes even lower than 6400

  51. There’s a few stocks going ex-dividend on Tuesday. Does anyone know roughly what the adjustment may be? Just so I can bear it in mind if I go short Mon or Tues and hold it. Thanks

    1. Hope FTSE 100 wouldn’t go below 6450 otherwise there will be a free fall with no short term supports available.

  55. not to sure now since opening below 30 day as to which way it will go if it was going up i would have thought it would have opened above btm of 30 day

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