6642, 6615, 6580, 6560 Support, 6687, 6710, 6724, 6747, 6773 Resistance

Good morning. Well Friday was interesting, had 6616 and 6606 as supports, set the order for the lower one but it bounce strongly from  the other one instead. Frustrating! Anyway, that now sets the line in the sand for support at 6615 for today, and prices have held since that rise. Todays pivot is 6642 so got a bit of support there initially. The daily trends are all pretty firmly down across the FTSE, Dax and S&P, even gold is pretty lacklustre. Fairly quiet on the financial news front over the weekend, after the news last week that interest rates will probably rise sooner rather than later both in the UK and US. Kicking off in the Middle East again with the UK joining he ISIS striking force too, though the big news was Europe winning the Ryder Cup! Pro-democracy protests in Hong Kong have left street deserted today as week long protests take place.

Asia Overnight from Bloomberg
Asian stocks dropped, led by losses in Hong Kong amid pro-democracy protests in the city. The dollar extended gains and Standard & Poor’s 500 Index futures retreated as U.S. economic data bolstered the outlook for higher interest rates.

The Hang Seng Index lost 1.9 percent by 1:41 p.m. in Tokyo, erasing its gain for the yearand dragging the MSCI Asia Pacific Index toward a 0.7 percent decline. The Hong Kong dollar and Chinese yuan weakened as the Bloomberg Dollar Spot Index added 0.1 percent, climbing a seventh day. New Zealand’s currency is poised for its biggest three-day drop in three years. Oil in New York slipped 0.6 percent. S&P 500 futures fell 0.3 percent. Asian bond risk rose to a one-month high.

Hong Kong’s benchmark index tumbled as much as 2.5 percent after police used tear gas to disperse protesters ahead of national holidays this week that will close the city’s markets on Oct. 1 and Oct. 2. The U.S. economy grew at the fastest pace since 2011 in the second quarter, fueling speculation over Federal Reserve rate increases. Pacific Investment Management Co., whose co-founder Bill Grossdeparted last week, said it sees slower growth in China and downside risks in Australia.

“It’s going to spook some investors who are worried that this could drag out, affecting the business climate in Hong Kong,” Vasu Menon, vice president of wealth management at Oversea-Chinese Banking Corp., said on Bloomberg TV from Singapore. “It’s happening at a time when the U.S. Federal Reserve is talking about tightening monetary policy, a time when China is slowing down.”

USA
S&P 500 futures are signaling the U.S. equity benchmark may start the week lower after its biggest weekly loss in almost two months. The guage reached a record Sept. 18. Nasdaq 100 Index fell 0.2 percent.

The Fed mustn’t “fall behind the curve” as it weighs when to start raising interest rates, Dallas Fed President Richard Fisher said, citing strengthening U.S. growth and building wage-price pressures.

FTSE Outlook

FTSE 100 Prediction
FTSE 100 Prediction

Todays pivot is 6642, not far below where we currently are so there is initial support here, though Fridays low at 6616 is the line in the sand for the bulls, a move below this will target 6580, the bottom of the 10 day Bianca, with 6560 below that. 6580 might be worth a risky long if it were to get that low. Resistance wise, we have the 200ema on the 30min at 6685 area [corrected figure from earlier email], so I think that we will see a rise to this today, continuing the strength from Friday, before stuttering there. Should that level break then 6710, 6724, 6747, 6773 are all resistance levels – 6710 being the strongest. I have put in an early rise, dip to the pivot then a rise towards that 6710 towards the end of the day. At the moment the 10minute chart also shows channel support at 6642.

66 Comments

  1. Last system trade recommendation 26/09 20:55. System hasn’t responded yet to recovery from this morning’s low of ≈ 6613.

  2. Good morning all

    Not feeling very positive about the markets at all as a general outlouk. Too many factors on the bear side of things it feels.

    Agree with Nick on the FTSE support levels for the DAX I see support around the 9440 level but I think the DAX will test 9400 soon. Beyond that we could have a bit of a total meltdown I fear.

    So with that in mind I went short just now at 9493.

    Happy hunting

  3. Jim & Hugh. Good morning
    Software generated sell signal 6641 break oc pp support at 8.15 am
    one more sell signal 6640 about 10 mins back.

    2. Morning RC – Hope you’re OK
      Keep posting the Software signals.
      This morning
      Using the RSI <30 + MACD < -4 on 5 Min = Long 6620

      1. Morning Hugh
        Yes it will be interesting to compare the signals.
        Not finding it easy to understand Nick, s take on the market. To go long at 6580 in the text but the arrows not drawn anywhere near the price level. Infact all price action in his chart is above the pivot at 6642 ?

        1. I had a slightly more positive bias, possibly like Nick, this morning and a little surprised to see all the action happening back down here…again….

          1. Yes, thought that the pivot would hold a bit better (6642). Alas not so long off the next support 6615 (Fridays low). Outside chance of the lower support 6580 but don’t think ti will get there, hence no arrow drawn to go that low.

  4. Yes it was short Hugh as above! Browsed the ProRealTime code site you mentioned over the weekend — some interesting stuff — thanks for the pointer.

  5. Good morning all,

    I did a bit of analysis over the weekend and here are my thoughts. Looking at the monthly chart on Dow, there is a shooting star formation on the Dow happening which might indicate a reversal. Taking into account the FIB levels from the lows of 2009 to highs of 2014, even if it re-traces to 23.6% that would be 2000 points on the Dow which will also equate to 10% market correction and it falls on the resistance line of 14800. I have a small short at 17140 from Friday evening, if it goes higher then will add to it until it breaks the high at 17365. On the Dow, I am thinking of taking Javed’s approach and leave it for months.

    Short term Dax short at 9490.

    Anyone thinks this is a possibility ??

    1. We agree on the DAX 🙂 With the DOW I think you have to be a bit cautious due to earnings season coming up. If we get another round of outperforming companies then the DOW will seek new highs, regardless what other economies / markets are doing.

          6. Well if Dow gets to 16900 today then there is chance Dax will go under 9400. Any rally back to 9490 area, I will short again with a 10-15 point stop.

          7. Dow not doing that today as far as I can tell, no reason for it and I think most will keep powder dry till THU and FRI when it counts.

          8. short closed 9420, banked 74 points. Tempted to go long for a bit now and see it back up to 70-80 level pending data

  7. RJ

    I do think that we will get a 10% correction but not till next year. Think the final quarter will be bullish especially particularly as Fund Managers under pressure to finish the year positive as we are only marginally down in the year at present (less than 3%).

    Current levels therefore should be an excellent entry point to pick up 150 – 400 points by year end imho.

  12. I feel something of a contary indicator.
    MACD <-4 So will consider looking at Longs if the RSI <30 – approx 6608
    Tight Stops as always….

  19. darn, missed pretty obvious short at 9425 on the DAX I guess… Anyone short on the DOW these levels, any thoughts?

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