6596 resistance, 6558 support

Good morning. Interesting day yesterday, if you read the media (and actually took any notice) you would have bet your bottom dollar on it being bearish, however, despite the initial dip 9that went slightly below the 6520 support) we sure as heck bounced back, reaching that 6572 almost in a straight line! The short there kicked in and grabbed a few though it wasn’t till later when the yanks got bearish and we saw a dip to 6547. The Russia/Ukraine situation continues to rumble on, though interesting gas futures have actually dropped so make you wonder whats going on and if we get the full story. Either way its still likely to weigh on markets, and Obama and Putin spoke yesterday. Gold continues to stay within that 30 minute channel and we should get 1350 before too long.

Asia Overnight from Bloomberg

Emerging-market shares slid a third day and commodities fell as the slowest Chinese money supply growth in almost 13 years tempered optimism from improving U.S. economic data. Japan’s Topix index rose for the first time in eight days and Australia’s dollar retreated.

The MSCI Emerging Markets Index slipped 0.3 percent as of 1:36 p.m. in Tokyo, as Hong Kong’s Hang Seng Index fell 1.1 percent. The Topix climbed 0.5 percent.Standard & Poor’s 500 (SPX) Index futures were little changed. The Aussie retreated 0.3 percent as the central bank forecast steady rates. Crude fell from a six-week high, leading the S&P GSCI Index of commodities lower. Palladium dropped from the highest close since August 2011 as Russia, the metal’s biggest producer, faces the prospect of further sanctions over unrest in Ukraine.

Chinese shares declined as the broadest measure of credit fell 19 percent from a year earlier in March and money supply grew the least since 2001 before data that’s expected to show economic growth slowed in the first quarter. Federal Reserve Chair Janet Yellen will speak today as manufacturing and inflation reports are released after better-than-estimated retail sales and Citigroup Inc. earnings buoyed U.S stocks. U.S. and European lawmakers are looking at how to punish Russia for its support of separatists in Ukraine.

“Investors are a bit worried because M2 is quite low,” Zhang Haidong, an analyst at Tebon Securities Co., said by phone in Shanghai. “New loans may be better than expected by a little, but it’s still not considered good data; we still think liquidity is very tight.”

Money Supply
China’s one-year interest-rate swap dropped as much as eight basis points to a one-month low of 4.05 percent after the data. Aggregate financing was 2.07 trillion yuan ($333 billion) in March, the People’s Bank of China said in Beijing today, down from 2.55 trillion yuan a year ago. M2, China’s broadest gauge of money supply, rose 12.1 percent from a year earlier, compared with the 13 percent median estimate of analysts in a Bloomberg News survey and 13.3 percent in February.

China’s gross domestic product grew 1.5 percent from the previous three months, according to the median estimate in a Bloomberg News survey ahead of data released tomorrow, down from 1.8 percent in the fourth quarter. That indicates a sharper deceleration than the median projection for 7.3 percent growth from a year earlier, down from 7.7 percent.

Accusations Fly
Ministers accused the Russian government of stoking the latest unrest with the same methods it used to destabilize the Black Sea peninsula before moving to take it over. U.S. President Barack Obama warned Putin of further consequences for supporting the separatists.

Ukraine’s central bank raised its benchmark discount rate to 9.5 percent from 6.5 percent to support the hryvnia, the world’s worst-performing currency this year, after clashes between pro-Russian separatists and government forces in the east of the country turned deadly.

Ukraine is facing its third recession since 2008 and dwindling foreign-exchange reserves.

U.S. Rally
The S&P 500 and Nasdaq Composite Index (CCMP) rallied more than 1 percent early in the day yesterday amid optimism on earnings and the U.S. economy. Stocks wiped out their gains as the market headed into the final hour of trading, only to rebound before the close. The Nasdaq Composite ended the day with a 0.6 percent gain, while the Russell 2000 Index added 0.4 percent.

The S&P 500 slid 2.6 percent last week amid disappointing results at JPMorgan Chase & Co. and signs hedge funds were dumping the bull market’s best performers. The benchmark index dropped as much as 4 percent from an all-time high on April 2 as concern grew that valuations may be too high as earnings season begins.

FTSE Outlook

FTSE 100 Prediction
FTSE 100 Prediction

With the Russia/Ukraine situation continuing then that will be a concern to markets, though with the results season underway in the US we will get the volatility. Citi results yesterday beat, showing JPM how its done(!!). we had a good bounce off the bottom of the Raff channel area yesterday and as you can see int he chart below are almost at the 20 day mid point. With yesterdays rise we are back within the Bianca channels (only usually stay outside of them for a couple of sessions while they adjust after a big move or break through. As such i have support at 6558 being the 20 day Bianca channel and also the daily pivot for today. I therefore feel that will be a good place to go long.

I have put in an initial rise this morning to 6596, though thats only 14 points from where we are as I write this so we might not get that high initially, as that dip last night from this area to 6547 could be foretelling. Todays divi is 3.2 so not too exciting to lure lots of divi hunters at the close I wouldn’t have thought.

After 6596 resistance the next level is 6619 then 6636. If the 6558 level does hold then 6619 is my target, though looking at the daily chart we have the EMAs to act as resistance – 10EMA at 6585 and 25EMA at 6606, so bear that in mind. Not an overly clear picture for today and can be argued both ways.

100 Comments

  1. Still holding short…
    will add more at higher levels, in prep for overnight and day drop tomorrow.

  2. Finding it really tricky to see any trend myself at moment so not going to take any big positions for a while till I can see one (might make some small trades). What is your thinking re a downday tomorrow. You could well be right but wanted to know if you felt a specific event will deliver this. Thanks

  4. Think we will see movement between 6550 and 6580, don’t really think we will see new territory today.

  7. Read all your comments & once again I tend to agree with
    DavRo’s
    However – US is showing signs of weakness over the 30+
    ( can expect a small up move at open – though ) – & in terms
    of FTSE – if it does not take out Todays high BEFORE US
    open – then re-test of Yest Low looks preety inevitable.

    One Q? to you hashmash – Your basis on this Down Move
    IS it Totally based on these Eco Figures ? Do you see anything
    in the charts ( as of now ) to substantiate it ?

    1. in charts u can see its pretty apparent, 4h ftse looks like a hanging fruit, stoc turning, enough room in RSI for down move.
      we have seen rejection of the 6600 level a couple time.
      down channel on a 30 mins, the only issue is that there are a lot of supports (6520 being a major one.
      also like u mentioned US markets were booming n now they slowing a bit and showing weakness.
      also ukraine crisis brewing up.

        1. Are you already in a short?
          If not – where are your areas you are
          expecting a short to be worthwhile ?

  8. I’m with Hashmash selling 6600 hopefully if we get, still waiting for a big dip and the typical strong bounce to signal the start of an uptrend, as next time it’ll go for record high…

    1. yup..
      good chance of 6600..hence why im just holding a small short now and waiting in attempt to catch day high lool, will be pure luck if i manage to catch day high, i just want to get as close to it as possible.

  9. Ahwab forget the record high on the ftse having been hearing that for over a year 2014 is nothing like 2013 these markets will end lower this year, for time being think we will be very range bound.

    1. luke i personally believe record high wont be anything crazy,
      maybe a 1% or 2% above the current high

  10. got the yellen speech today as well….gon fk up positions which i will hold during the day 🙁

  14. Closed out early good profit on ftse and DAX now to find a good area to short, didn’t expected to be this fast, now a long day ahead 🙂

  19. ok dont look like we will see above 6600…market tops out at 6590.
    ive added a bit more short at 6580

  20. Hashmash

    Another Q !
    You are waiting for a short at 6604 – OK
    How do you trade this – ( based on your expectation
    of going down ) – if the market begins to sell off before
    your order is triggered ?

    US Open – so looks like we get a sloppy move down

    1. rob i alredy have short from yesterday..
      and like i said above i added more at 6580 🙂
      im at 2/5 of my max position right now.
      will add more if i see 6600 (which i dont think we will see – but if we do then great).
      my 1/5th will go on at break of 6550 and last 2/5 will go on break of 6520

      1. Yep well done – good to have one go well. I am still sidelines as have been out in the spring sunshine until a longer term trend sets it! How long do you plan to hold now?

        1. holding till tomorrow at least, if i see 6450ish i close everything and go home with 130 points profit 🙂

    1. ofc keeping my plans :), whats the point of entering a trade n bailing out for a measly profit?
      unless it goes tits up id try best to close break even.
      i havent added anymore at 6550 yet

  26. Wonder if Nituk ever bailed out of his trade – if i recall he was going long 10 points every 20 points from 6550 so would have been adding through to 6700.

    1. nah doubt we would break 6590…
      i wasnt expecting a huge drop today anyway, its alll in the overnight and tomorrow day.
      🙂
      if that doesnt happen then ill start thinking about closing positions

    1. no im not closing, holding for a big drop tomorrow.
      Everything point to a drop tomorrow.
      China bad reports.
      EU bad reports
      US bad reports
      Ukraine talks going on…
      Hi vol – showing fear…
      so dont see why i should close a position which is already in profit 🙂

      1. We’re having a good size drop today. For the first time ever I sold right at the top 16271.

        now just need to be sensible and move my stop down

      1. haha yeah been some time, had a hit on confidence though!
        Lets see if we can ride this till near 6450ish.
        Think we have broke the range bound barrier, otherwise id wouldve been losing money today lol

        1. on a more serious note, reason i say we broker range bound barrier cus my indicator reset today, showing a correction in market, before majority were winning, now majority losing.

    1. GG – tbh i never actually set levels, i just try follow the markets..
      Let me contradict myself, i do however spend alot of time watching the market move tick by tick at levels which i think maybe be support/resistance.
      6520 i had today as a major support and thats broken.
      next level i have is 6450 on a 4h/daily chart.
      and i most likely close MOST of my shorts there because the next support is on a weekly interval around 6000 – and i really dont believe we will see that.
      But just incase if 6450 is seen this week ill close around 80% short and leave 20% open and see how it works, if theres a bounce with strength ill close immediately :). With this approach u just gotta have understanding that u cant catch every point on every trade, u will watch a bit (sometimes alot) of profit evaporate lol.
      But in the long run ull see that u end up riding the trends much longer than u would if u have a take profit set in stone.

  36. I pray to god not to touch 6500 🙁 I am dying. I just want to close my position at 6590 level and can sleep.

    1. whats the point, if u look how close we got to 6500 then ur lucky becus its at 6530ish now…
      Uve technically made 30 points profit.
      whats gonna come before? a 30 point move down or a 60 point move up?
      dont say 50:50 like nitup, probability wise u close now than wait for 6590.
      Also consider what tomorrow has upcoming,
      if we break 6500 tomorrow, u wud wish u closed at 6530.
      if u see 6590 before 6500, then its luck and not trading, dont cheat urself in trading – like a black hole, sucks u in…FOREVER!

      1. We were at 6590 earlier so why didn’t you close then. Sounds like you have too big a position for your comfort so you need to get out with minimal damage and start on a smaller scale until things start to work.

  38. Ftse all over the place still. I have tomorrow’s pivot around 6555 and we are almost back to there again after the late afternoon sell off. I am probably now bearish but who knows where we will be in the morning

  39. These markets are kind to me !
    Went Long 6555 – – telephone calls and lack of concentration – hedged out at 6530 .
    Closed the hedge at 6523 and closed original position at 6555.
    Now looking as if it may have run it’s course..

  40. wow well these last couple weeks have been amazing for day trading- especially if your on the right side of these 50-80 intraday swings

  44. DEMOCINCE your prayers have been answered……… must have been fairly good ones……. done the trick anyway…..will consider a few before tomorows trading

  45. just checked the markets..
    for people wondering whats going on with me.
    half position closed at 6550.
    reopened at 6575…avg open at 6577.5.
    GL all..
    Ill be up all nite monitoring Aussie and china reports.
    to me looks like another visit to 6520 atleast.

      1. only fear is of the Aussie report… if that breaks 6600 then ill close at around 22.5 point loss… otherwise will wait for close tomorrow.

  47. top of 10 day has good suport for to carry on rising can now go either way depending on news good or bad GL

    1. i said most liekly it wont break, and that will be a sign of the jump back.
      i assume the reports tommrw will push markets down 1% roughly to 6520 and then jump back up, and that jump will be the one for the rise up.

  50. still out… in the meantime the f**** of every people saying disaster is coming , I miss 2 x opportunity of entering DOW futures JUN at 16080.
    I still am influenced of what others tell.
    I need to close my eyes and ears of what anyone saids.

  51. I just have a general question:

    Say the holding cost is 2.9853% and geometric mean of FTSE 100 10 years return is 8.04% (https://www.google.co.uk/search?q=ftse+100+return+over+10+years&rlz=1C1CHFX_enGB508GB509&oq=ftse+100+return+&aqs=chrome.2.69i57j0l5.9303j0j7&sourceid=chrome&es_sm=93&ie=UTF-8&qscrl=1)

    and we can project ftse 100 climbs to 7100.10 from 6572 (today’s point) in one year.

    Then no matter what we put in Spread Betting at this point and wait till a year. There will be a (8.04% – 2.9853%) return theoretically.

    Is this correct from your point of view?

    I do know there is a risk that the market can be reversed dramatically toward very low end say 6400 in the year end. But on the long run, it looks like if the up trend is certain, there will be a very big gain. More stake you put, the big return you will have.

    please feel free to identify the flaws:)

    1. also, apart from the spread, is it true that holding cost is the only price we pay for any spread betting platform.

  52. All Cannon St Conmen . Wall St is a con as well . Look at the overnight on DOW .

    All a complete joke .

  53. This is a strange time with the FTSE – my trends showing mildly upwards but its the 7th change in 7 days which consider I drive this off a daily timescale is somewhat unusual. So going to keep it small or go and enjoy the sunshine again! Probably look to long off the pivot (mid 6550s) if it gets there. Reluctant to hold longs for any long period of time as if Ukraine goes pear shaped it could sell off very quickly.

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