6636, 6599, 6567 Support, 6655, 6672, 6683 Resistance

Good morning. Well, the pivot didn’t put up much of a fight yesterday though the bounce from Fridays low at 6615 was a bit better, though the price did overshoot to a low of 6607. Still looks weak really with the daily EMAs crossing to bear and the daily channel lines on Bianca and Raff heading down. 6695 area looks pretty major resistance today – top of the 10 day Bianca, 10 day raff and the 10EMA on daily. Good shorting area here, if it gets that high. 6655 is the first resistance.

Protests in Hong Kong took place yesterday, all largely peaceful despite being tear gassed, though they have been told to stop now by Hong Kong’s chief executive, Leung Chun-ying. 80,000 people on the streets won’t be doing HK’s economy much good, as the Central Business District (CBD) was largely deserted yesterday.

Asia Overnight from Bloomberg
Asian stocks fell, with the regional index headed for its biggest monthly drop since May 2012, amid tensions in Hong Kong and as a Chinese manufacturing gauge missed estimates. The dollar pared its largest quarterly advance since the global financial crisis.

The MSCI Asia Pacific Index slipped 0.9 percent by 12:33 p.m. in Tokyo, pushing it down 5.4 percent in September. The Hang Seng Indexdropped 1.4 percent as pro-democracy protests continued to choke off roads around the city. The Bloomberg Dollar Spot Index slipped 0.1 percent from a four-year high and New Zealand’s dollar was set for its worst quarter since 2008. Oil in New York slipped 0.3 percent.

Global stocks dropped for the first quarter in more than a year and sovereign bonds are beating corporate debt by the most since 2011 as speculation about Federal Reserve interest-rate increases and geopolitical tensions spur risk aversion. Student leaders of Hong Kong’s protests set an Oct. 1 deadline for their demands to be met. With mainland markets poised to close for a weeklong national holiday, a China purchasing managers’ index from HSBC Holdings Pls and Markit Economics showed a slower-than-estimated expansion this month.

“There’s plenty of excuses for people to take some money off the table,” Ryan Huang, a strategist at IG Ltd. in Singapore, said by phone. “The Fed’s QE is scheduled to end next month in the U.S. and investors are wondering about the timing of interest-rate increases. China’s economy is slowing down and protests in Hong Kong only add to geopolitical concerns.”

World Index
The MSCI All-Country World Index is down 2.7 percent since the end of June, set for its first quarterly retreat since the second three months of last year, and the biggest such drop since June 2012. Standard & Poor’s 500 Index futures were little changed after the U.S. gauge lost 0.3 percent.

While MSCI’s Asia Pacific index lost 3.1 percent this quarter through yesterday, it is trading at 13.4 times estimated earnings, still close to the 13.8 level reached Sept. 3 that marked its most expensive valuation this year.

The S&P 500 trades at 16.6 times estimated earnings and the Stoxx Europe 600 Index fetches 15.3 times projected profit.

The value of global equities has climbed by about $20 trillion over the past three years as Fed measures to stimulate the U.S. economy bolstered liquidity and fueled investment in emerging markets. The central bank has been reducing its asset purchase program, known as quantitative easing, by $10 billion a month this year, putting it on track to end in October.

Hong Kong
The Hang Seng Index yesterday erased its gain for the year and is heading for its biggest two-day drop since February. The Hang Seng China Enterprises Index (HSCEI) of mainland companies listed in the city slid 1.4 percent today and is on track for the largest monthly decline since January. The Shanghai Composite Index climbed 0.1 percent today.

Hong Kong Chief Executive Leung Chun-ying, whose resignation protesters are demanding, urged people to call off the rallies and to stop spreading rumors that the People’s Liberation Army is being deployed to quell protests.

FTSE Outlook

FTSE 100 Prediction
FTSE 100 Prediction

Todays pivot is 6636 so there is s support there, but the price action still looks messy as resistance is only at 6655, with 6672 and 6683 above that. Coupled with the fact that the daily chart has significant resistance at 6695 I think that we will see weak bull today before a decline at the end, most likely from the 6683 area. If it were to reach that daily resistance at 6695 then that will be a decent short to hold for a few days I feel. I feel that the Dax wants to decline to 9250 yet which will bring the FTSE down a bit further yet, before probably bouncing mid October, and maybe tallying with a low on the S&P at 1950ish.

For today, an initial short at 6655 looks playable and see if it dips to the pivot or further. If it bounces back, supported by the moving averages not he 30min then it should manage to reach those higher resistance levels at 6672/6682, again, worth shorting around this area and see what it does. On the support side, yesterdays low is obviously the next level after the 6636 daily pivot, with the bottom of the 20 day Bianca also here at 6602. 6560 is the bottom of the 10 day Bianca but I don’t think it will get that low today.

116 Comments

  5. Think we will have a largely positive session. Good economic data across Europe will help make the Americans want to finish the quarter on a high and that in turn will drag Europe higher. The bearish views might come into play tomorrow Nick as a nice start to October.

  7. Hi RentalCollection —
    1) FTSE SELL 6643/08:09 (Late in the day!)
    2) FTSE BUY 6639/08:52 — Hoping for a decent run-up.
    Flat at the moment.

    1. FTSE SELL 6638/09:23 — Just seesawing? (System using 100 ticks data today; input from yesterday morning.)

  9. Morning all.

    RC i was also waiting to go short @50! Didn’t hit the button though even at 49. How annoying. Next time.

  10. RC I don’t use a piece of software as such to guide my trading (that if you don’t count the IG pro platform I do use).

    I use technical analysis (basic stuff like RSI, MSA etc.) I combine that with my knowledge of world economics and politics and as I final ingredient I use my experience as an ex equity sales trader to know when to cut a trade or when to take a deep breath and stick with it. Not sure I am all that successful. After a ten year break from trading I have been back at it since April this year and have done well. But I know this can change any moment so I always re-asses how I should trade to match my position to that of the market if that makes sense. I do not believe a piece of software can make you rich trading the markets but at the same time I am here to learn from other about techniques or indeed software they use, all to improve and challenge myself.

  12. DUTCH
    Yes absolutely. There are many ways to trade the market. Whatever you use to get your entry, its to make sure that you are able to control your emotions.

  13. MLawrenc
    Morning. Are you in any positions today. How has the past few days been treating you.

  19. hmm closed a small long too early on the DAX but forgot to post so won’t bore you with that. Think these are good levels to short on the DAX, maybe not for today, lord knows might go to 9500 but will be for after tomorrow. Short DAX at 9470

  20. RentalCollection — Nothing formal, but results very fair. I find the most difficult situation is minor fluctuation around a flat short-term trend — but that’s difficult for people as well as machines!
    Last — FTSE BUY 6642/09:55. (This might run.)

    1. Jim – You need to add the MACD above or below a certain point to filter out these fluctuations.
      e.g The histogramme hasn’t really moved far away from the centre line – this would imply small fluctuations.

  21. JIM
    Have you tried using a higher timeframe?
    I find a longer time frame signal is the best filter to use. Keeps signal for longer and more likely to succeed. From your signals today get the feeing that you want an early as a signal and so getting lot of seesawing and if you are trading the signals , probably frustated

    1. Just running different timeframes for different trading horizons as part of the testing process. Hugh has made a very promising suggestion above re short-term trades.

  23. Hugh — Yes I can see that’s an interesting refinement. As I see it, you’re suggesting the trading signal should be triggered if and only if (abs(MACD Dif) > x); x = say 0.5 for a 5 min. timeframe. Hm. 😀

      1. Placed Order to Go Long 6640 Stop 6636..
        Changed my mind
        Considering 6636 now….
        The re-tracement was rubbish…6645 Resistance

  26. Hi Rc,

    Last few days haven’t been too bad. I took a mini break and tried not to watch the markets too much if at all – it ended up paying off yesterday.

    I went short around 50 at the second time of asking this morning and just closed for a quick 15 points. If i were more relaxed i might have held on but i’d be happy to make a couple of 15 point turns and call it a day.

    If i learnt from these last few days however it would be to just let it run and only look every hour or so. What will be will be.

    The market seems as jumpy as me though and support seems to be forming @36? Still no need to hit the button though. I’ll set my next price and see which one it hits.

  29. Next price – 6610-6660. Think 50 point spread might be too wide though and i could miss out on both sides. Mustn’t chase the market though.

    1. thank you Hugh for that. I was thinking earlier to short DAX and going long FTSE as a kind of pair trade. anyone ever do that type of thing with indices? What did you use to chart this and what setting please?

      1. I have done a few in the past on single stocks mainlu eg Barclays v Lloyds / RBS, Sainsbury v Tescos etc.
        On indices I have done Dow v FTSE, or S&P v XAU. One thing to note is that with cross currency index pairs trades need to also do the underlying FX trade to reflect the true economic transaction.

        Eg Buy 3 Lots FTSE, Sell 2 Lots Dow, Buy £20,000 GBP / USD.

        Of course we get hammered on margin and funding with alll our trades on both sides whereas the professionals are pretty much cash neutral….that’s the benefit to them…..low capital requirements and relatively low risk.

  32. Hugh — I’m using Bollinger bands to sift out seesaw trades. Buys are allowed only below the lower bound and sells above the upper bound — interesting, thanks. (Using 1 std dev rather than the usual 2.)

          1. My original position would now be closed out here 6633.
            I should have bought again lower down which is the normal routine – 1st entry works sometimes but sometimes needs the help of another !

  39. how many points are you off now then? See that’s my money you giving me! Taking it off you too on the DOW later

  41. how come I still have this feeling the markets going to end up today…weird. Think I’m going to have a lie down now 🙂 ideas anyone?

  43. Dutch it’s one of those days that if you go long they’ll wipe you out completely then after you’re done if goes up one way and doesn’t stop climbing.
    Glad I took my points and ran lol.

    1. yeah you are right, which is why I have not done much trading today, knew it would be like this. It’s fine just providing some blog entertainment, mainly for my own therapeutic reasons 🙂

      1. long FTSE now 🙂 6609 – could not resist, this looks like window dressing. Might short DAX if it gets to 9480 area

  48. Closed my long for 20 points. 35 points for the day. Next price 00-50 but i think i’ll switch off now.

      1. hmm did not quite get there did it. Hope you put on a short regardless Hugh, looks would be worth it and probably even more so when looking at it tomorrow.

        1. Dutch – Busy time of day for me in the afternoons – I run a business as well – so never too sure what’s going to happen !
          Never got to it….

  50. Respect. This trade is shown at the start. Don’t really understand why 6617, it was possibility to enter at 6610. Maybe different providers?

  52. Damn the FTSE moved outside my black box…..so switched my short at 6632……not as cheap as it was earlier in the day but would have settled for 190 points when the weather was miserable in August…..unlike sweltering September (21c on the 30th? Come on be serious all you climate change deniers!)

    My last trade of the year now….so hoping Santa will give me 200 – 400 points by the time we are all singing about auld acquaintances.

    1. My charity is Great Ormond Hospital and I will happily organise a lawyer / trustee firm to set up the account. Who is happy to act as witness. Nick and?

  59. Lol competition is hotting up in here, either way a charity is gonna make 100k.

    I think the only way you can tell if someone’s system works is posting trades live as and when, not when the market is in your favour and then saying I was long or short at that trade. Also uncle time stamp.

    Eg FTSE long £25pp 6603 4:00pm

  60. Maz he was asking for payment for signals, and I’m pretty confident in my own trades so didn’t require his service..

  62. In all seriousness there is no issue with charging for trading signals. After all that is what Nick does…and no one is going to give you something for nothing in this world. The question is though is are they worth it?

    This is your opportunity to prove everyone wrong. If you do I’m sure you will get a number of subscribers. So let’s not have a BD competition with you raising the bar with a £100k barrier to entry. Just your chance for free marketing of your service and eternal bragging rights.

    1. Nicely put..
      ….I’m sure you will get a number of subscribers. So let’s not have a BD competition with you raising the bar with a £100k barrier to entry. Just your chance for free marketing of your service and eternal bragging rights.

  63. good luck Javed, I closed 75% of my shorts at 6600. Rest set to stop at 6600. Am sure my stop will be hit soon. Will switch to long when daily MADC turns promising, but I reckon October to be bearish at least until FED meeting, let’s see.

  67. Pain in the back side, trying to install that whatsapp. I just learned it’s for mobiles. What a pity. My mobile struggling to download it.

    1. I’m working from PC only, for me it’s unusual to use mobile for communication. I do phone calls usually. I do have Viber though. I am trying to install whatsapp atm, see how I go…

    1. From the charts looks like there is lot of support between 5600 and 5584. So will probably see a lot of price action between this area. So really hold on to tour batton for some narrow range movements in this area.

  71. LoL – better than any soap on here !
    Dutch – You asked what I did – I run a co. supplying components into industry celebrating 39 years this year.
    Spreadbet since 1997, on and off.
    In 1997 you had to ring IG up and the minimum bet then was £10 PP . They have been lucky to be in the right place and at the right time….amazing company.

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