6610 support; 6632, 6650, 6675 resistance

Good morning, hope you had a good weekend. Fridays trade worked exceptionally well with the long from 6585, and well done if anyone held over the weekend – gained a few more since i closed (at 6614 as per email). Its looking fairly upbeat first thing this morning as I write this, however, that has created quite a few gaps which might well close first thing this morning. Key level initially for the FTSE is 6632 where we have resistance and in fact have dropped back from a bit overnight. Continuing the war theme after the Ukraine, North Korea has been live test firing missiles, though the Russia situation has calmed down a bit. News out of Japan showed an unexpected slow down in industrial production. Yellen is speaking later today, and traders will be awaiting payroll data later this month. As we are nearing the UK tax year there are some who will be putting money into ISAs so as I mentioned the other day I expect share prices to remain attractive for the S&S ISA money, for the moment. No sharp sell offs just yet.

Asia Overnight from Bloomberg
Asian stocks rose, with the regional benchmark index heading for its fourth straight daily gain, as consumer shares led advances.

The MSCI Asia Pacific Index climbed 0.5 percent to 137.40 as of 12:36 p.m. in Tokyo with about five shares rising for every three that fell. The gauge lost 0.8 percent this month and 3.3 percent this year through last week as investors weighed the crisis in Ukraine, with stocks in Japan and Hong Kong declining the most among developed markets. Federal Reserve Chair Janet Yellen speaks in Chicago today as investors await payrolls data due later in the week to assess the outlook for U.S. interest rates.

“Shares have rebounded a bit recently after falling too much due to the Ukraine situation,” said Masaru Hamasaki, a senior strategist at Tokyo-based Sumitomo Mitsui Asset Management Co., which manages about 11 trillion yen ($107 billion) in assets. “Things haven’t deteriorated further, giving a sense of relief to the market.”

Regional Gauges
Japan’s Topix (TPX) index added 0.6 percent as the yen held last week’s losses versus the dollar with Mazda advancing 4.1 percent to 457 yen. Data showed Japanese industrial production unexpectedly fell 2.3 percent in February from January. A three percentage-point sales-tax increase takes effect in the country tomorrow.

South Korea’s Kospi index fell 0.3 percent. North Korea said it may conduct a “new form” of nuclear test if the U.S. challenges its efforts to enhance deterrence through military drills. Australia’s S&P/ASX 200 Index rose 0.8 percent and New Zealand’s NZX 50 Index slid 0.1 percent. Taiwan’s Taiex index rose 0.1 percent andSingapore’s Straits Times Index added 0.6 percent.

Hong Kong’s Hang Seng Index and the Hang Seng China Enterprises Index of mainland shares traded in the city both rose 0.1 percent, while the Shanghai Composite Index was little changed.

US Futures
Futures on the Standard & Poor’s 500 Index rose 0.3 percent today. The measure gained 0.5 percent on March 28 as consumer shares rebounded amid data showing household purchases, which account for almost 70 percent of the U.S. economy, rose in February by the most in three months.

China Manufacturing
An official purchasing managers’ index of Chinese manufacturing due tomorrow is estimated to drop to 50.1 for March from 50.2 in February, a Bloomberg survey of economists shows. Levels above 50 indicate expansion. HSBC Holdings Plc and Markit Economics Ltd. also release the final reading on their China manufacturing PMI for March tomorrow, after preliminary numbers signaled a third month of contraction in the sector.

China is expected to roll out specific growth-supportive policies, analysts led by Lu Ting at Bank of America Corp. wrote in a note dated March 28, after Premier Li Keqiang said the nation can’t ignore “difficulties and risks” from increasing downward pressure. The official expansion target for this year is 7.5 percent, although investment banks including Goldman Sachs Group Inc. and UBS AG have projected lower growth.

FTSE Outlook

FTSE 100 Prediction
FTSE 100 Prediction

The bullish run that we rode on Friday from the 6685 area has continued without any major upsets news wise over the weekend, however we are testing the resistance at 6632 now. With some gaps formed since Fridays close i expect that we may get an initial dip from this area, to around the bottom of the 30 minute channel and the pivot area at 6606. However, if that level breaks then 6685 and 6563 are the next supports, the 85 one more than likely to get hit. That is the level that held on Friday so would set ups 2 day double bottom. As I mentioned above, there is likely to be some ISA money coming in this week before the tax tar ends on Saturday. However, we do have Yellen speaking later today, last time causing the market to drop – so if we have risen tot he resistance area at 6648 but that time then it might be worth a short then.

99 Comments

  2. So, are we going to see 6585 today ? there is a gap there. US may help us.

    Wanna reenter there and in DOW, looking for a bargain

  3. Wow – quiet here this morning. Heavy weekend?

    I closed my longs out at 6650+ early this morning and seeking a reentry point so am on similar strategy to Muan. Waiting to see if 6610 area is the turning point or not.

  5. Oh, I knew Nick’s arrows will be Down-Up. It’s very confusing as I was expecting to see something: Up-Down.

  6. May I ask, yesterday the time was changed 1 hour forward. How will it affect the opening the US market, in particular Dow? What time will it open now? And when Dax will open? Could you clarify to me, please?

    1. no i closed it…
      I cant trade using my indicator becus markets just too range bound and no clear direction..indicator showing sidelines

    2. i may do a quick trade on yellen speech to catch some points..
      after very long im having a down month, quiet pissed off about it…
      was thinking of taking a week off or so, but ive become quiet fresh with the weekend break so no time to waste 🙂

  11. Marco I think we will see the rise till DOW open, atm DOW looks weak so yellens speech at 1:45 might be the little push over the edge. Personally long at 6222 looking for 6240, or preferably before the DOW open.

  12. Last few weeks have been so dodgy I’m conditioned into a scalper now too many times has there been a random u turn…

    1. yea thats why i kept getting churned out 🙁
      crazy.

      my indicator showing sidelines but moving into bearish – how well can i trust this right now? hmmm like NOT AT ALL until we see a break somewhere..
      like i said before if we turn bullish its gonna be super stealthy
      and if we look at the chart it kinda showing ftse drifting up with huge vol

  15. Hi Guys,
    I hear people many times on here say they move to reach break even when they’ve placed a trade but doesn’t this stifle ‘room to breath’. How much room do people give on their stop loss? 10 points, 20 points or just under a resistance level?

    Thanks
    Lee

  16. People should need not worry, April 1st has risen every time for the past 10 years with an average close of +70 for the day.

  22. FTSE looks like it definitely wants to dip.. cus dows opening rise basicallly had no effect..lool thinking i should have closed my long from 6620 earlier hmm

  23. If you said Dow opens at 14.30, what opens at 13.30 then? I always see big fluctuations at that time.

    1. jack we had DST changes yesterday….so US opens at 2.30 now, last 2 weeks or so was opening at 1.30…
      1.30 u usually see fluctations as some ecnonmic reports come out then..

      1. Oh, Thank you very much. That really helps. Cos last weeks like you said it was at 13.30 and at some point I was surprised to know that as I thought it was 14.30
        Now I get it, we back to 14.30 again.

        2. ofcourse it will continue, they never said they will just stop. In my opinion they will still cut 10B each time they meet till there is nothing to cut….lol…

    1. Well, its last day of March and we are nowhere near his 7100 target :-)…fat chance to see him around anytime soon…lol

  26. Ok, so economic indicators in US lets be honest , they were shit and the market is up almost 1%??!!! Did I miss something??or do they operate on another planet??lol

      1. Yes agreed – but on this occasion looks like it is going to do it. Ready to go long…

  29. To be honest, I am not sure why the Yanks are so pleased with themselves???I am not an economist but I can tell you that as long as they print the easy money the economy will never recover to the level they want. Why would any business take a huge risk and expand, create jobs if they can just do what they do now, borrow ease money and buy back they own share. That way investors are happy and the CEO can sleep better and keep checking the bank balance. Like everything else whatever goes up, eventually has to come down

  30. DavR0s

    I read a few days back you trade the ftse-100index in your isa?
    What are the fees for this – both charges & interest charges?
    how closely does it track the ftse index itself? whats the spread?
    can you go short as well?
    grateful for the info. thanks
    kevin

    1. Hi

      Will try to help. The charges are simply the buying and selling charges as if you are buying/selling a share. So should be sub £20 to get in and out with an online broker. No stamp duty (it wouldnt work otherwise) and no interest charges. Its like buying a share in the FTSE. Divis are paid 4 times a year so the direct relation with the FTSE is modified each time an individual share goes ex divi so you need a spreadsheet to track this properly. You can read up on tracking index which for something like ISF.L is about as good as you are going to get – cant remember the details but when i looked into in originally was happy with it. I only use this one as the liquidity is very good and its a physical ETF which means when you buy it then it is backed up by share purchases rather than being something esoteric that I dont understand. Means the spread is very tight – currently equivalent of just under 3 points. You need to do the maths on this given your pot size but I find the costs are pretty good for me. Be careful bearer market open/close times as the spread can widen like a share – and it obviously doesnt allow you to trade out of core UK market hours. What I love is the ability to risk “off” and “on” with minimal cost. I dont use this for shorts as the whilst there is an ETF that does this the tracking is apparently really horrible so stick with the SBs for this. I am trying to use this strategy for holding several weeks rather than day trading. SO presently my overall medium trends are showing a turn up so only considering longs at the moment and trying to get a good entry price. Hope that helps

  31. S&P 500/daily — Gradient of LinReg 100 positive since mid-Feb. Price > LinReg 100 once again and LinReg 20 close behind. All quite bullish. FTSE meanwhile is floundering; the upswing from ≈6500 lacks energy.

  32. DavR0s

    Thanks for the info – very informative!
    a few questions if i may
    what is the price of 1 of these etf’s ( approx – 000, or 0000)
    are you able to trade in & out on a daily basis – ( I have noted the way you trade )? this is in reference to liquidity – .
    when you say short Etfs are horrible at tracking ftse – could you explain this pls.
    Regarding your stratedgy – do you find yourself trading at close or anytime of day ?

    Thanks once again
    Kevin

    2. DavR0s

      Sorry to just add another PS
      Do you find trading these etfs very different to the index itself outside the isa ( apart from the obvious isa benefits ) – in respect to trading itself
      Kevin

      1. Hi – sorry bout that. Just bought in at 6590. With 2 minutes to go the spread hadnt widended. So coming back to your questions….

        I FTSE ETFS with ishares costs 659.40p at the moment so you need to work out the mutliplier to get to the equivalent FTSE number. I actually use the IG shares charts along side my trading account.
        You can by and sell these as often as you like – as I say is like a share – its just a personal choice not to to too much intraday stuff.

        Re the short side there is an ETF that tracks the FTSE but in short manner (called something like the FTSE super short ETF) but I have read that it doesnt track the FTSE very well ie if the FTSE fell 0.5% then you would get nothing like 0.5% return so I stay clear of this. Its tracking gets worse after a few days so you might as well use a SB.

        Timing is when price action/support dictates which is why I find this site very useful. Dont normally go in close to day end of first thing but given sharp end of day sell off that is when it happened on this occasion.

        I dont buy this outside the ISA as that is where most of my cash is and you then get into the world of capital gains and tax on divis – again like a share. That the ETF is the same ETF.

        I am still learning here and no vehicle is perfect. See just made 0.15% on my ISA since 430 so beats bank rates though clearly there is lots more opportunity to lose as well as win doing this!

        Hope that helps again, Cheers

        1. Forgot to add you – another plus is you get a 15 second timer before you have to accept a quote – again just like a share, though sometimes they are crafty and will expire your quote so you lose the price even within the 15 seconds, but sometimes it works. So for example at 6606 today I was taking constant quotes to catch the dip and see if 6606 supported the price. In the end if didnt so I repeated the same at 6685. its not long 15 seconds but its better than no time at all which is what a SB does for you.

        1. I’m not and I know why that drop at end. ChinaPMI overnight.
          If this comes worse I will add at another level, much below 6580.
          If this comes inline or better I will do nothing, as we go for the upside. The upside trend is intact, but very modest.
          I’m better with Futures contract, as I do not get charged overnight.

          1. well if u not trading direct futures (i.e spreadbetting on futures) then the spread is too large (i think 5 points)….
            so unless u holding for more than 4 days then futures are better otherwise cfd/spreadbetting is better

  40. lol, never can’t get a decent position in FTSE. well at least I’m better than last time. What a bullshit drop out of nowhere. Targeting tomorrow or after 6670

  41. I think that was a stop hunt.
    FTSE looking good for a nice rise tomorrow, hopefully without this sort of drama…

    Gl all

  43. not buying anymore, i have to stick to my strategy, and its showing only a slight upside and then a slide down.

    1. HASH my spread is 5 points. I never know if my target is reached tomorrow or after 5 days.
      When I enter was expecting for an upside tomorrow or after tomorrow to that level.
      If it takes longer, then what ?

      1. I’m using mini futures Jun FTSE from IG. That is spreadbetting futures and 5 points spread

  44. If I buy 2 contracts in FTSE cash I need 71 ponts to reach that target. If I buy 1 contract FTSE future I only need 58,7 points. The exposure is almost the same.
    That’s my view… I could exposure a bit more in FTSE cash, say one more contract, but than my charges would be heavier

  45. bought last week Thursday at 6557 and close at 6606 today. With had the weekend. Now bought again at 6551,3 and targeting 6610. Always in Futures spreadbetting 5 points.
    I think if you go for 10-30 points the most, than FTSE cash is better
    Anything higher than 30 points in FTSE is better Futures. Don’t you think ?

    1. Its a fairly straightforward calculation – cost me £2.16 to carry 4 points across last week so thats £1.08 per 2 points (the min) – or half the DFB spread. So after 2-3 days you would be better going with the futures contract. Personally whilst I desire to hold for several days I dont know where the market takes us and the movements ( possible gains/losses) are much bigger than this sum of money eg I held a long across 3 days over the weekend and it gapped up and then rose so more than paid for itself. SOme SB companies will pay you if you go short overnight (IG doesnt they charge you). I have another SB account that i use when going short – though i do like the IG interface and platform

      1. Don’t you think that FTSE cash is better for small targets ? Futures are better for bigger targets. That’s my view between both. If I can reach 50 points in 1-2 days the most, of course cash is better, but that’s a higher risk to take. It can take longer time

        1. muan…if u trade futures directly than its usally 0.5 point spread + 0.5 fixed broker spread so 1 point (no overnight charges – but rolling contracts can require a bit of skill to minizmie cost)..

  48. Wishful thinking, but I’m leaning towards a decent rise hence my longs. Lol if we get 6690…100 point for me!

  49. I’m not an economist, or anything like one, but does anyone else feel that the UK is heading for hyper-inflation?

  51. I think this rally from 6500 is in danger of stalling – if it hasn’t done so already. 🙁

    1. Senu, I am optimistic this afternoon will be bullish, in fact I am looking for a break of the 6660 level to cancel yesterdays shooting star.

        1. I HOPE SO!

          WHERE’S NICK? HAS HIS ALARM NOT GONE OFF?

          DID HE GO OUT ON A MAD ONE LAST NIGHT?

          1. Am back now. Had to head off early to an appointment and was supposed to be back by ten, but it was chaos and all running late as the midwife hadn’t turned up for her shift. Fucking crap Southampton Hospital!

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