6648 pivot support. Possibly 6700 today? Could just sell off though…

Good morning, unfortunately the drop was a bit further yesterday and the 6640 support didn’t last very long. As it happened it dropped right down to the 6606 area, which was the bottom of the 10 day Raff channel area. With the speed that it dropped over the morning it looked like it was going to carve through it, but the bulls defended and we got the rise right the way back, almost to the 6685 area where we had the resistance. Messy! Overnight has been a bit weaker dropping off the highs, a level that might be hard to break today. As you know I was bearish for the end of this week; I was expecting it more today than yesterday I grant you; however, with gold rising strongly (the long on that from 1288 worked well yesterday if anyone else took it), I would say that there is a bit of safe haven money flow going on. Gold looks good for 1320 next I feel. Of note is that the bottom of the 10 day channels are as follows for today, Bianca 6618; Raff 6638.

The media were pretty upbeat yesterday with the £/$ rate hitting a 2.5 year high on a strengthening UK economy (even if it still feels flimsy in reality).

Asia Overnight from Bloomberg

Asian stocks outside Japan rose and silver headed for its longest rally since March 2008. The yen climbed against most major peers, Indonesia’s rupiah led emerging-market currencies higher and palm oil advanced to a two-month high.

The MSCI Asia Pacific excluding Japan Index added 0.7 percent as of 1:04 p.m. in Hong Kong, and is on track for a 2.5 percent increase this week. Japan’s Topix index tumbled as the yen climbed 0.4 percent versus the dollar. Standard & Poor’s 500 Index futures slipped 0.4 percent after the gauge closed at the highest since Jan. 22. The rupiah increased as much as 1.2 percent to a level not seen since Dec. 3. Spot gold traded at $1,305.28 and silver climbed for an 11th day. Palm oil advanced a third day in Kuala Lumpur.

Stocks and developing-nation currencies are rebounding from a rout fueled by two rounds of Federal Reserve stimulus cuts. Chinese consumer prices rose faster than estimated in January, while producer prices fell in line with expectations before money-supply data due today or tomorrow. Italy’s Prime Minister Enrico Letta plans to resign today, while Germany and France release final-quarter gross domestic product figures. Reports in the U.S. may show industrial output growth slowed last month and consumer sentiment is weakening in February.

“We remain positive on risk assets and don’t see any reason to pull back,” Manpreet Gill, a Singapore-based senior investment strategist at Standard Chartered Bank, said by phone. “Economic data in the U.S. hasn’t been brilliant but the overall uptrend hasn’t really changed. Things need to materially become worse before we change our positive view on equities. Chinese inflation isn’t a worry as monetary policy in China remains pretty tight.”

U.S. Stocks

Futures on the S&P 500 dropped after the measure rose 0.6 percent yesterday. Better-than-forecast earnings and a $45.2 billion takeover of Time Warner Cable Inc. (TWC) outweighed a drop in retail sales. The U.S. equity benchmark has added 170 percent since a March 2009 low.

FTSE 100 prediction
FTSE 100 prediction

FTSE Outlook

That was a decent bounce in the end yesterday that stalled at pretty much the resistance area we had at 6685. Today I think the resistance level  is going to be around that same area – 6682, the overnight high, and likely to be seen if 6664 is broken in hours. Its Friday so likely to be a little weird(!) anyway. I did have a drop pencilled in for the end of this week, though with that drop yesterday maybe that was it come early. The 10 minuet chart shows those 2 resistance areas, and I think that a rise to the top of the channel where the 6882 is, then a drop down is quite likely. Should however the bulls manage to break that then 6700 would be an obvious target, being a round number. Today’s pivot is 6647, so I expect that may hold as initial support, if the bulls aren’t going to waste their climbing efforts from yesterday.

102 Comments

  1. Still holding long on Dow from Monday 15738 and took another position today at 15950 target is back up to 16550 area nice 10k profit if works out

      1. Closed +10
        Need to wait a proper signal otherwise it seems like a gamble to me – will it go or won’t it.

    1. … you would have to think so, all the gains this week on nothing, money should come off the table for the weekend, why they work out a reason for a slump 🙂 possibly hail over New Jersey!

  6. tested breaking through the 6670 area 3 times this morning now and not succeeded with any longevity…

    Nick’s down arrow about to come into play soon…?

  13. Closed my long – didnt like this slide and cant seem to get past 6670/80 area. I think it was triggered by some politican putting spanner in the works re debt ceiling vote so has potential to cause a sell off today. I shall curse as it rises now !

    1. … theyve already dapened expectation on this so it should beat the downgraded forecast and soar when it beasts it by 0.000000001% 🙂

  18. Not so sure Marco markets seem to rise on bad news and rally hard on good news… It’s not the emerging markets they need too worry about it’s the world economy it’s slowing down, share price are already stretch people are living more on credit now than on 2008

  20. Luke I am waiting to get in on a pull back to 15850 then go long
    If it rises today I will wait as am sure a pull back is on the cards today

        2. Ofcourse it is!!..lol… Its all the bad weather….its unthinkable that the economy may not be as fabulous as they all thought…I am not sure if they ever heard that for the economy to grow you have to invest. Buying own stock by the big businesses doesn’t actually grow the economy…

  26. The loons from over the pond have put the machines on buy mode again…. Think I will leave it for the day now, have my Dax short running can’t buy at these level …. Gl all.

    1. And so it’s up to 80 (16080). Tempted to go short again but I know it’s complete madness – to leave uncertainly over weekend and Monday on Dow? Madness. I already tried shorting 16030 yesterday and all I got was 10 points as in the morning couldn’t catch the lower price. So no shorts for me now. Longs? A bit too late imho.

  27. DOW is just kissing the 50ma. Will be today a close above. After 16180 and clear for new highs

    1. unchanged from last month but better than forecasted. And this piece of data is more impact than the other 2, as I see in the FOREX calendar

  30. … another concern with the commodity (sorry FTSE) index, is that the miners have been progressing well and yet still the old codger refuses to burn like the DAX and SPX, its nearly 3% down pre slide whilst the SPX is barely 1% down on its all time high likewise the DAX, how does that work, more and more disconnecetd by the day, this is not a good sign imho .. heading to the pub 🙂 its raining where i am wonder if it will affect the FTSE

  31. Yes but 2 poor data and one unchanged don’t warrant a blast up as we are having.!
    I am very sceptical either this is going to tank over weekend or powers that be are manufacturing a climb up so people can offload before the real pull back

    1. Data is not the only thing that moves markets. It’s sentiment. And now the sentiment is to the upside.

  32. ,,,, Reuters strapline “US STOCKS-Wall St advances as industrial production discounted” hilarious 🙂

  33. “Index headed toward a second straight weekly advance, amid better-than-forecast earnings and speculation a disappointing factory report may mask economic strength.”…..got this from Bloomberg, can someone tell me what planet are they on?? to come up with this conclusion??!!!lol

    1. The poor souls are paid to talk, at all costs, just like they were demanding a sandwich in the deli New York style, not to think. What they say is of no consequence whatsoever – this is universally accepted, especially by their employers. 🙂

    2. The British as always are more down to earth. This is an expression I’ve been saying for quite some time in this page. They do not fall for euphoria quite easily.

  37. Look like it the yank hitting the buy button on there own stock market ftse not moving much higher and dax seem too be hitting the brakes too….

  38. US has spiked too far above the dip to retreat before hitting a new high IMO. Ftse will motor in its usual stubborn fashion. Slow grind next week.

  40. We seem to be heading for an 80’s theme !!

    FTSE 6680
    DOW 16180
    DAX 9680

    If all three break into the 80’s then I will keep buying into next week
    Failure for all 3 to break the 80’s then sell sell sell into next week.

  42. The yankees just finish there lunch. Now comes the afternoon. Let´s see how they digest… I feel they will hit harder in the buy button

  44. Good news or bad news if it is a strong enough trend and all the big guys know how high it will go they will use any news to make prices get to where they want , Dow to 16550 by end of month that’s my prediction but after that things won’t be pretty

  45. We are now just ending the V-shape in US. I feel we are going to break this for new highs, as it happened in the past.

  47. … Sad or maybe good day for me, I’m joining the ranks of the defeated, had a large bet (because that’s what it is in all cases) that this would retreat, it has not and worse has spanked many arses, feel it’s going to fall back but in all honesty who knows, what we do know is that it’s not rational in anyway, the more rational you are yjd worse it is, the market at the moment is crazy if your rational you would bet on it rising forever no pullbacks or max 0.5 per cent (talking about the SPX here it’s the only market that matters) be careful out there, final play the FTSE bought at 6764 going to ride this to hopefully 7500 this year but I will be amazed if we break 7000 max because the yanks will need to hit north of 1950 & 17000 for this to happen, long post here but I did enjoy the pub 🙂

  49. .. PMT no I wish, but alas 6764 hoping for a recovery before that savage 400pt slump, I tragically stuck with it, it’s coming back but what a farce, not coming out of this until 7500, chance of that very slim in the next 5 years though 🙂

    1. 6764 is your stop from a short position and now you are going to extend that stop to 7000-7500 ?

  50. … 6764 was my entry, and I’m not coming out until 7500, should be straightforward a mere 10+ % gain this year is that unreasonable 🙂 all I need are those yankee doodle dandies

    1. your long entry ? when ? The last time it was 6764 was 1 month ago. So why are you complaining, when markets are closing in ?

  52. .. Your getting it, 1 month ago I stuck with it, didn’t close knew it would rebound, only it didn’t rebound quickly, it keep going down, I’m happy market is closing in but will close out at 7500, then I’m very happy, until then it’s individual shares only, never touch the SPX , DOW or DAX there the real deal the FTSE is a laggard and very disconnected, hence 7500 could take years compared to the others reaching comparable figures i.e 1950, 17500 , & 10500 this year 🙂

    1. Cannot believe you are going to hold a spread-betting position for years!???
      To be honest I didn’t understand. According to your previous post at 8:57 I thought you were complaining because you had short and it was still going up and you are losing. Now it’s appeared to be that you are long. I can’t get my head around it. What position you are holding and what 7500 has to do with all of that.

      1. .. I did have a short, as I said I closed it, now long, I believe all the “experts” we’re calling north of 7000 end of the year, maybe 7500, there’s a good chance we will see 7000 soon, then dip, then on and up to 7500, but only if the Yankees play ball and hit big numbers, the ftse is totally dependant upon them period, a fall of 1% over there is often, 2% over here! and a rise of 1% over there can be nothing here, look out for my new posts … Ftse5yeartrader:-)

  54. Long at 6764 and holding. Easily the worst trade I have ever heard of. What if all the banks collapse again this summer. Will you still hold?

  55. hubris: holding a losing position letting it fall 400 points and hoping for a target of 7500 while paying interest is definitely a bad trading plan.

  57. No interest if you take a far out contract. Hubris I think it’s a good strategy. Takes the infra day swings and volatility out of it. S&P 2000 this year IMO then probably a PUT option for 2 years.

  58. IMO this surge in US índices was because of relatively good data in consumer sentiment which besides having more impact in markets it reinforces the idea that bad data in retail sales accounts only for bad weather. And when good weather returns, retail sales will come better and in line with sentiment

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