6635, 6620, 6604 Support, 6675, 6700 Resistance

Good morning. I’ll hold my hands up and saw that I wasn’t expecting to see the FTSE at -127 yesterday and down at 6650…. it even got as low as 6630 overnight, which considering I had mentioned 6635 yesterday but really not expecting it to be hit was a bit of a surprise! Europe slow down woes and ISIS bombing started were put forward as the reasons, but the US when it opened wasn’t quite as bothered, but sure was later in the day with the S&P hitting a low of 1975 after the close. Days like that i tend to find its best to stand aside once the identified levels break, it starts becoming more of a gamble rather than logical trades, and generally one just ends up losing money.

Asia Overnight from Bloomberg
Asian stocks pared a loss, with a rally in Hong Kong offsetting declines inAustralia and Japan, the dollar slid and bond risk rose to a three-month high after a selloff in U.S. equities. New Zealand’s currency gained from a one-year low after a smaller-than-estimated trade deficit.

The MSCI Asia Pacific Index lost 0.2 percent by 1:50 p.m. in Tokyo, dropping a third day as the S&P/ASX 200 Index slumped 0.9 percent in Sydney. A gauge of Chinese shares in Hong Kong climbed 1 percent from a two-month low. Standard & Poor’s 500 Index futures added 0.1 percent after three days of losses. The yen gained 0.3 percent to 108.57 a dollar, while the kiwi strengthened 0.4 percent after slipping as much as 1 percent last session. A measure of Asian credit-default swaps climbed one basis point to the highest since Sept. 1.

Australia cut its iron ore price forecasts as slower growth and a “cyclical downturn” in the housing sector in China sap demand amid rising supply. About $919 billion has been wiped from the value of global equities since a record on Sept. 18, amid concern the global economic recovery is wavering and on escalating conflict in the Middle East. Germany’s Ifo survey of business confidence is due today.

“Heightened concerns about geopolitical tensions in the Middle East, combined with renewed concerns about European growth combined to produce a risk-off environment,” Matthew Sherwood, head of investment markets research at Perpetual Ltd. in Sydney, which manages about $29 billion, said by e-mail.

Japan Resumes
About the same number of stocks rose as fell on the Asia-Pacific gauge, which traded at 13.6 times estimated earnings, down from the year’s high of 13.8 times on Sept. 3. That compares with 16.6 times projected profit for the S&P 500 and 15.4 times for the Stoxx Europe 600 Index.

Japan’s Topix index slid 0.6 percent after a holiday. SoftBank Corp., the Japanese company that owns more than 30 percent of Chinese e-commerce giant Alibaba Group Holding Ltd., was the biggest drag on the regional index, slumping 4 percent. Alibaba declined a second day in New York, losing 3 percent to $87.17 amid concern over the outlook for Asia’s largest economy.

Australia’s S&P/ASX 200 Index retreated after rising 1 percent yesterday. Prices for iron ore, Australia’s biggest export, slid 0.5 percent to $79.69 a dry metric ton at Qingdao in China yesterday, the lowest level since September 2009.

The Bureau of Resources and Energy Economics, Australia’s state commodity forecaster, reduced its iron-ore price estimates for this year and 2015 as rising production outpaces growth in Chinese demand.

The Hang Seng China Enterprises Index climbed after falling nine of the last 10 days and closing at a two-month low yesterday. The Hang Seng Index increased 0.4 percent with the Shanghai Composite Index advancing 0.9 percent.

Emerging Markets
“We’re still positive on China,” said Daphne Roth, head of Asian equity research at ABN Amro Private Banking, which manages about $218 billion, by phone from Singapore. “We still think economic growth is going to be around 7-to-7.5 percent.”

The Kospi index in Seoul added 0.2 percent. The MSCI Emerging Markets Index was little changed after four straight losses. The MSCI All-Country World Index fell 0.6 percent yesterday to a six-week low.

US
U.S. equities slumped as health-care stocks dropped and small-cap companies retreated for a third day. The S&P 500 reached its lowest level since Aug. 19, while the Russell 2000 Index (RTY) of smaller companies lost 0.9 percent, after sinking 1.5 percent Sept. 22.

FTSE Outlook

FTSE 100 Prediction
FTSE 100 Prediction

Todays pivot is 6700, a level that the bulls will need to exceed to target 6755 and a chance in tone on the FTSE, which is bearish obviously! Just below the pivot is the first resistance level for today at 6679, which is a back test of the bottom of the 10 day Bianca channel that it has broken out from. If it can get back within the channel then it will most likely hit the pivot. Support has been set at the overnight low of 6633, with 6620 and 6604 below that. If it hit 6604 then I would expect a bounce there as I still think there is some bull around, but maybe not getting going till next month.

When we break out from the daily channels it usually takes a few sessions to get back within them (talking the Bianca channels here), plus we have a PRT rising trend line at 6604, joining the lows in April and early August.

154 Comments

  1. Nick

    Interesting – You seem to see one of the alternatives that is being shown on the chart. Probably the most likely.

    From the Software signals which I use It seems to agree with your Predictions.

    However the charts – ( my analysis ) – There is another possibility as well.
    A consolidation process with 6670 as upper area and 6640 as the lower area.

    Just another take – which could play out

  5. Hmm short dax at 9572 which any chart will tell you is right. Keeping an eye though as the heart is not too sure

      1. banked my long before this morning, small 18 points profit. Added to current short at 87 now so overall short dax at 75 – stop 95

  7. Good morning RC,

    Really not sure this morning. Confidence knocked but must get back on the horse!
    I took 15 points for my short yesterday so I have no open positions at the moment. As the market opened ok compared to yesterdays close I would usually suspect a dip before a rally. Surely it can’t stay down here?!
    The market is bearish though and you can usually make good money selling into the rallies so I think I’ll feel more comfortable going short than long. If i followed on from yesterdays prices i would go short at 65 or 70. As i view it this morning I would have set a price of 50-90 (in hindsight could have made a quick turn..)
    But like I said don’t fancy going long too easily so long@6635 Short@6685. Now I just sit and wait.
    As you can tell i’m all over the place this morning though… So might even just jump in and hit the short button with a fear of missing out.

    Everyone else’s view?

  8. I great with Lawrence but I’m always wary about the putting up long orders on bear runes like these as momentum carries it further. Though 6620 is where I intend to consider shorting.

  9. Btw it’s nice to see for once we have a mutual short stance for once…although I shouldn’t let it, some of you guys have strong (sometimes) valid points and put me off…
    (Cue) PMS to say go long lol.

  12. When the market is slow like this – we ( sorry I ) moan.

    When the market is volatile as yesterday – we ( sorry I ) moan

    Looking more likely that Mlawrences 6685 Short will after all get hit.

  15. True Ahwab & MLawrence, As nentioned before I think we are in sell any rallies territory for this week at least.

    For me I will be taking the price at cob 30th Sept for my long through the final quarter. If that is in the 6600 – 6650 region I will be very happy and comfortable…..lower…..then better still.

  17. Still my long is playing with loss at 1994. Meantime tried another long after hours at 1979 and closed with gain.
    Now in sidelines with that 1st long. Expecting a bounce today. The 1972/1973 ES mini futures support is working. That’s why I gone long at 1979, it dip a little further after the close but then bounce to that area and has been trading above that zone.
    But will wait till end of week to see how the close will be.
    Would like to buy FTSE below 6600. Let’s see if I have lucky

  19. 1977 ES is the area to fight 1st today, than 1983/1984. After that the final battle at 1990/1991 ES (1997 SPX)

  20. But you people who short the markets are right. Sometimes is good to short. But I have so much difficult to short. This Sunday night when I saw FTSE at 6844 thought shorting it, because of the candle last Friday and because of Javed words saying that markets are going low. But I have so much difficulty in doing that. I need to learn in doing so. Markets have highs and lows and we need to take advantage on both sides.

    1. PMS

      Know what you mean.

      I overcame it – by printing my charts and turning it around 180′.
      No joke. later tried to turn my monitor – as you can imagine – a bit difficult.

    1. But not changed my outlook. Just trying to push the market higher – so that MLawrence01 can get on-board. !!!

      1. Thanks RC!
        Thinking of jumping on board @75. I will short on 10 point rises. If it does get to 85 it will simply give me another one to make a turn on.

        At the same time i’m thinking are we just all p*ssed off we didn’t capatalise yesterday so are shorting more in hope that we can capatalise today instead?

  22. yep that was long, cos I was looking at this rise 8.46-9.17 thinking at 10.30 – they won’t believe me but i think it’s actually long. however i prefer shorts at the moment so this rise is more than welcome.

        1. I have come out of that position with 8 points profit Dutch. I will wait for the US to open.
          My logic with that 5 point stop is, its above day’s high so if it breaks the day’s high then it wouldn’t matter if it was a 5 point or a 20 point stop as your not sure were it will heading. Sometimes it takes your stop and moves in your favored direction that’s part of the game. With this sort of stop positioning and taking trades at good levels it gives me good Risk/Reward.

          1. Looking at the Pin bar on the 4 hour chart and 50% re-trace would bring it to 9570 and further up to 9650 before it continues the downtrend. Will watch these levels.

  24. Lawrence

    You still shorting at 6685?
    Just a little info – After 6685 – there is not much resistance – so could have a situation where the market just rallies to 6720 & 6750
    Remote – but one never knows

    1. I’m really not sure – i hit the button on 74. Usually use the old sell into the rallies tactic when there’s a steady decline but that clearly isn’t the case so far… I remember on Friday thinking why would anyone be long up here so surely when it’s dropped 200 points lower one should now think why would anyone be short down here..?! The market getting to 6634 might give us bears slight comfort but what about yesterdays high being 6771..?
      I need to switch off though. I think that’s my problem recently.. Over thinking. Please all feel free to tell me to shut up – it might do me some good.

  25. Short Facebook as well in case anyone cares about that sort of thing. Not too much upside before earnings and fundamentals whichever you pick are high (even Alibaba looks cheap compared) and any economic bad new ought to hit tech stocks hard. Anyone else trade stocks?

      1. Hugh

        6685-7 resistance is preety formidable. So i suppose we have to first think of it as acting as an area for a short.
        But the Upward push is far from over – so higher is a possibility.
        However I do not see anything at 6698
        But what do I know.

          1. DJI – Still not looking that happy though – Yesterday the line in the sand was 17125 (thereabouts) at 17070.

  34. If only i wasn’t scared to go long @50 this morning or possibly even stuck to my price @85… As it stands i didn’t listen to myself again so currently short at 74.8 so we’ll say 75. A confident spread (with help of the US :/) of it going down i would be looking for 6640-6690 making a 35p turn. Not so confident i’d settle for 15p turn and will stop me going short again too soon so 6660-6710.
    Where we were looking to sell into rallies could we now flip this and be aiming to buy when it falls?
    Have you closed yet RC?

    1. I should add if i stuck to plan no 732 of the day.. and went short at 75 and 85 average of 2@80 i’d then be looking to buy@65 for 30p profit. Or could even just take half that for now. #@+%&~#!!!

    1. Yep and was too scared to go short of 2 (would be looking quite good now) Might settle for 15p @60 if it gets there. Do we now buy as it falls?

  41. think we will see a relief rally now as on the whole this US number will be seen as ok even if it means faster interest rate hikes. For me nothing has changed though so I will short towards end of the sessions/rallies. Not much read on the FTSE at the moment but for DAX I’ll go short 9640-50 level

    1. Agree Dutch, I am also looking at 9650 level. I wasn’t sure about going short at 9600 levels as I was expecting it to hit 9650 but lets see.

    1. No still in there. If i went short of 2 i’d be out for +30p. I think i’ll just let it ride till the end of the day now.

    2. I suppose our knee jerk reaction in the morning – Sell Sell Sell
      But Looks like consolidation – Could still go up to 6721.
      Downside – 6620 ( unlikely )

      1. Yep. Feel i even called it this afternoon when i said buy ‘into’ the falls. Never mind. Lessons learnt today.

      1. You might still get 9650 Dutch. I was having support on Dax at 9648 and it went close it to so took that short.

        1. how you doing RJ, holding in there? me short on average at 55 and looks like I need to sit and be patient now, not my strong suit!

          1. lol, I trade the US500 =SPX on IG.
            If I was US citizen I would trade SPY… they are not allowed to trade spreadbetting

      1. Lawrence

        Still trying to analyse your method.
        But very interesting.
        6712 – is where I think Ftse will take a rest.
        Any higher – Looking at US – Very Overbought.
        So doubtful

        1. Should have gone with gut – get out of short for 10 points go long and can now be looking very profitable. I’ll stick with it though. Might help us both understand method :/!
          Short of 2 @95

  52. Uau… that 1982/1983 was broke ? Never stopped. Is this for real ? Such strength.
    What is happening. Something out of China ?

  54. Lawrence

    So you are now 2 x Short – 1 x 674 & 1 x 710
    = 6692 B/E
    & you will hold it till 6660
    If it goes higher – Where do you place your next Short?

    2. I’m going to say short of 2 @95. Aim to make a 15point turn from that price so target 6780-6830 (will be +35p – or could just buy back 1). Try never to trade in more than 3 lots. If that happens i’ll have to have a think… We can both see how it pans out.

  57. I shall keep current parameters and see how the system does on these tomorrow — although tomorrow is an ‘off’ day for me. As Jack 2 kindly observed — nothing much today — or words to that effect. We’re getting some movement now though, and that looks like up — the latest signal is BUY. The eventual aim is of course a money-making machine — which keeps me interested at least. 😀
    http://i1348.photobucket.com/albums/p736/jmca01/FTSE100DFB_zps6676939d.png

      2. RentalCollection — I guess it’s a matter first of proving the approach for real and building confidence. The need for patience is the lesson I take from today. In ProRealTime it seems to be straightforward enough to convert a back-testing system, which runs in real time, to a fully automated trading system in the IG context. But you have to be pretty damn sure before you play that game! I just need to give it a bit of time and see how it goes.

  58. anyone else trading at the moment? Short on DAX at 9657 and unless the US craps out later I will need to ride that one as I still think that ought to at least go back down to 9600.

    Can’t see the DOW having further upside today beyond 17150 area, anyone have any views on the DOW for the evening? I think (and hope I guess) it test 17075 or even 17000 but that is probably out of the question.

  59. Dutch you’re right about the resistance about that 17080 area, but I think it may test that 17140 first with the data out tomorrow.
    As I was typing DOW just rocketing lol.

  60. Javed what is your view now ? a dead cat bounce ? I may close today at 1998. My week target. If it closes below that and see a real firm move to the close, I may go for the 2004 target.

  63. Haha PMS ever the observant one.Sobered up that last loss 🙂

    PS I don’t think we will until that Christmas rally, I think Javed was something like 7004???seems about right for the year end.

    1. But as always a bit frustrated. I have trade this year in a relax mode. Without any stress. A bit stress is always good if you want to make big money.
      My 2nd entry at 1979 last night was at first to stay with it for at least one full day.
      But then I thought it was not a good idea and preferred to sell it with small gain., without any stress and stay with the 1 st position.
      My biggest error and rarely do it right is always early entries. Only the 2nd or
      3rd entry is the right one, never the 1st.
      I need to correct this. Maybe I will start to make my 1st entry in paper and then the 2nd will try a real one 😀
      Also I need to work those shorts. Need to be confident in going short.

  66. Sorry PMS….was out…..a bit chilly here in London today. Difficult one to call ( as always). Just when you think the market will 6600 it goes above 6700!
    My personal approach means that I’m not going to worry too much and still think we will end the year higher (yes ahwab I think my prediction was 7002).

    At 30th Sep I will switch my short into a long. For what it matters I think this bull has another day to go and then may go under 6700 early next week.

    But glad you made your target for the week only half way through. Always good!

    GLA

  67. So ES mini futures at 1992 as I predicted if 1985+. Now will stall here. Maybe tomorrow will see 1994-1995.

  70. RJ

    Sorry man I feel your pain. I closed some of my DAX shirt earlier but will remain short at 9662, will have to be patient I guess. Also short in Dow at 17214 and lord knows about that. Still take a view that US market is at its top for the year and the rest of the world ain’t doing that well so.. Fingers crossed

    1. Thanks Dutch, I don’t expect to win every trade. Its been good past two days and today was a losing day. I am not sure about shorts after today’s closing. I am thinking Dow might test 17300 again before it falls but lets see.
      Dax might retest 9650 level before moving up.

  71. Yes Ahwab…..I was at London’s finest ground to watch the capital’s best team……no not Chelski……
    We’re not in great form…..but should still be able to thrash that other team in North London in their tin pot stadium….as we always do…..haha

  72. Javeed

    You do keep odd hours. Well you must have been wiping your tears away in a drinking establishment. May-be next match. ha ha
    —————
    Now for some serious business … ya really .. my own analysis
    well – the 6721 area got hit yesterday, so it leaves a clear plate for today. so what is this market going to do.
    Well 6743 – 48 is going to be resistance area. After that 6778
    Looks like a dip to 6686 – 92 area first probably.
    ( Could we get to 6654 ? – wonder. )
    ——————–
    No software generated signals yet.

    1. Morning RC & All –
      I’ve got a GAP on the hourly chart that starts at 6760..
      6743 is 38% Retracement (19th -23rd) & Previous Support
      Happy to go Long, but not here waiting for 6710.

  74. RJ just like predicted, hope you got in at 9650 level? I closed short and went long now up 50 points! What a difference a day makes. Got a tad lucky there

  75. Haha….yes I do. Actually yesterday caught a chill so woke up in the middle of the night.

    Yes market looking to push on today. The bounce still looks strong at the moment…..let’s see how much momentum it can maintain through the day.

    1. Morning Javeed

      Nothing like a cup of cocoa and a peek at the markets at 3.27am.

      Momentum – still there for a move to 6743 – possible 6755 – but to get to 6778 – well that will be asking.

      But interesting to see how it pans out

  78. Morning all. What’s this crazy thing going to do today?! I’m chasing my tail this morning :/. Went long first thing @05 thinking we’d all join in on the world wide rallies for a quick 15points. Sold 2 @20 looking to make another quick 15 points back at 05. Not very strict trading but ill be happy if it pays off..

    1. RC i’ll use the 30 points to raise my 2 shorts to 6710. Still not out of the woods yet but feeling more comfortable. Isn’t the rule that if the market opens up it will fall? Who expects it to be a bit more volatile today? It went alll the way down and climbed all the way back up. Now we can expect bit more of a ‘normal’ day?

  82. Just thinking of my first post of the day yesterday. ‘Surely it can’t stay down here?!’. Yet i shorted myself and got in quite a bit of bother. O well new day today – good luck all!

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