6660 support, 6710 resistance

Good morning, fairly quiet on the FTSE since the open last night, dropping back from that 6682 resistance area mentioned on Friday. We have the US closed today for a bank holiday so its more than likely to be a fairly quiet day all round. Gold continues to climb very well, and that 1340 area looks very likely now. There is quite a bit of UK news out this week including the inflation report with it likely to drop below the 2% target, on a stronger pound, weaker commodity types and widespread deflation. The latter of which I imagine they will be wanting to avoid! A deflationary spiral isn’t much good for anyone. We also have jobs news out this week expecting to show another drop in benefit claims, and public borrowing figures, expected to be a surplus of £7.5bn in January.

Now Carney has disconnected interest rates to employment (that peg didn’t last long!), the new tie is that the UK recovery must be on track before rates will rise.  Mr Carney said the country had enjoyed a “consumer-led recovery” but that businesses must begin investing at a much greater rate for him to be convinced the time is right to raise rates. “The key to this recovery sustaining itself is going to be around business investment,” said Mr Carney in an interview on the BBC’s Andrew Marr Show. Will probably be something else by the time comes anyway!

Asia Overnight from Bloomberg

Asian stocks rose, with a regional benchmark index poised to advance for the eighth time in nine days, after China’s new credit increased to a record in January, boosting optimism the world’s second-largest economy can maintain its growth momentum.

The MSCI Asia Pacific Index added 0.9 percent to 136.50 as of 3:08 p.m. in Tokyo, with more than two shares rising for each that fell. The measure climbed 1.6 percent last week as trade data from China beat estimates and Janet Yellen’s first official address as head of the Federal Reserve buoyed optimism about the U.S. economy.

“There’s optimism in the market,” Desmond Chua, an analyst at CMC Markets in Singapore, said by phone. “Record credit growth in China should offset recent concerns the economy is slowing down. Investors are looking forward to additional monetary stimulus in Japan as the government tries to counter the negative effect of the higher consumption tax in April.”

South Korea’s Kospi index increased 0.3 percent. Australia’s S&P/ASX 200 Index advanced 0.5 percent. Taiwan’s Taiex index and New Zealand’s NZX 50 Index both added 0.1 percent. Singapore’s Straits Times Index climbed 0.9 percent. Hong Kong’s Hang Seng Index jumped 1 percent, while China’s Shanghai Composite Index rose 0.6 percent.

China Lending

Chinese aggregate financing, the broadest measure of credit in the world’s second-biggest economy, was 2.58 trillion yuan ($425 billion) last month, the People’s Bank of China said in a Feb. 15 statement. The data, while suggesting China can limit the scale of a slowdown, contrast with a central bank call last month for lenders to control surging loans and highlight diminishing economic returns from credit growth.

Cautious Outlook

“At this stage we remain cautious,” Angus Gluskie, who helps oversee about $550 million as a fund manager at White Funds Management in Sydney, said by phone. “The rally that we’ve seen in the past week has been very rapid and that could sometimes be problematic. We’d like to see a bit more data.”

The Standard & Poor’s 500 Index gained 0.5 percent on Feb. 14 as earnings overshadowed weaker-than-estimated U.S. jobs and factory data last week. The U.S. market is closed today for a holiday.

The Fed’s Yellen said last week that U.S. growth has strengthened and that only a “notable change in the outlook” for the economy would prompt policy makers to slow the pace of cuts to the central bank’s monthly bond-buying program.

FTSE 100 Prediction
FTSE 100 Prediction

FTSE Outlook

A fairly flat day on Friday really, and likely to be a repeat today with the US closed. As mentioned in the Dax section above, I expect a flat to slightly bullish day. we have a decent 30 minute channel in play with support at the 6660 area, which is also today’s pivot. The 10 minute chart has a decent channel too, with resistance at 6673, so bulls will need to break that level first to reach 6693. I expect we will see 6710 today, a level that could look good for a short if seen. The tops of the Bianca channels are back in play now so flagging up areas to watch for – 6755 for the 20 day and 6781 for the 10 day channel as resistance areas.

Initially the big battle will be which goes first 6673 or 6660, I think the bulls will be in charge today, but an initial dip off the 6673 is likely. If the pivot were to break then next support is the 200ema at 6653 (and also the bottom of the Bianca 10 day at 6657) then 6630. The bottom of the 10 day Raff is 6608.

75 Comments

  2. Short from 6693 – the FTSE is going to correct sooner or later.Happy to have a huge stop[7120] and wait for the eventual correction.

    1. Thats just 8 points of the top of the weekly for a stop. If you are going to have that big a stop, would it not be better a little higher from top of weekly?

      1. Correction is due, no doubt, but why enter it now without any signs?
        I was lucky to withdraw from my short at midnight yesterday +5 points. I opened short on Friday before close and was up 15 points before the market ooops closed. I was thinking to close but missed the time of close (it’s second time when I missed to close position before close) so was worried a bit. However decided to check at midnight and as it shown the signs of climb of I withdrawn from the position.
        Now I am waiting for a correction.
        On Russian Youtube the trader I watch said: correction and further wave so no shorts long term at the moment.
        I learn quite a lot from the top Russian traders and teachers at the moment. Started writing my algorithm. Their advice is valuable to me especially in psychological aspect.

  3. Feel like a squeeze up from the computers again…. Correction coming then range bound for the rest of the day imo.

  6. I really cannot figure out why these feeling that FTSE is going for a correction .. My charts only see this coming up for now.
    Do not see any drop, after that last one.
    In that ocasion I said FTSE had found a bottom. Next day made a spike down and never looked back again

  7. Thats just 8 points of the top of the weekly for a stop. If you are going to have that big a stop, would it not be better a little higher from top of weekly?

    Flash , not sure if your comment is directed at my trade. The FTSE has not reached 7120 for over 4 years’.

  9. TWITTER @pmstrader says:
    February 17, 2014 at 10:30 am
    I really cannot figure out why these feeling that FTSE is going for a correction .. My charts only see this coming up for now.

    Taper fright to knock the Bulls off their perch.It is a question of when , not if. IMO.

  10. Agree with you Nick ftse will have another correction within a few weeks…. Sometime it just better to widen stops on longer trader and still day trade with the smaller stops as long as you are in profit at the end of the year.

  11. Luke says:
    February 17, 2014 at 10:38 am
    Agree with you Nick ftse will have another correction within a few weeks…. Sometime it just better to widen stops on longer trader and still day trade with the smaller stops as long as you are in profit at the end of the year.

    Thanks Luke , that is exactly how I trade.I trade the Ftse to compliment my Forex trading.

  12. Forgot add IMO markets are going to be more range bound this year will not see the massive gains of 2013… This bull run is 5 years old in March QE is being wound down and earning per share not looking good either.

  14. I’m getting confused with all these people called Nick…

    Went short at 6725, for the rebound on the day…

    1. Haha, that’s what I was about to ask. I presume Nick without the orange grid around the message is not Nick who runs this site.

    1. You don’t know????Its the weather…lol….I even hear this morning that Japan GDP missed the prediction because of that!! Did they had another tsunami we all missed??!!…lol

  17. Lool i actually added to my current long(6668) at 6722 with a tight stop-then i log on and see a lot of people shorting…this is exactly why you have to be your own trader with the greatest respects to every1- but for me i trade what i can see gl guys

  18. Haha, that’s what I was about to ask. I presume Nick without the orange grid around the message is not Nick who runs this site.

    I am Nick ‘Minor’.

  19. When people are saying “correction”..which way are you saying? A correction from where to where? Not the best at following traders jargon as you can tell. Thanks in advance.

    1. Correction down of course as it’s been rising it needs to correct down (retrace, pull back) before going up again.

  23. All European markets are hardly doing anything but FTSE is 72 points UP!! Have we missed something??..lol.. just read that, we had $17B inflows to European stocks. Can someone explain to me how 17B can create 3TR higher valuations??..lol….its all suppose to be about earnings this year but those lunatics over the pond have an explanation and reason for everything!!…lol..

  24. Lol closed all positions now…flat right now and cant really monitor it any longer-tommorrows another day gl

  25. I have taken Jack’s advice – hence the name change.

    The Ftse , would appear to be having a struggle to climb higher. 6733

  26. Struggling? I think it did quite well playing catchup with Dow suspect this will go higher before big low and on and on

  32. Short from 6725 not looking too rosy now.

    Was only aiming for 10-15 points. Might close position as it appears there is no weakness on the horizon.

  34. guys I can see ftse falling back tonight probably hit Nicks 55 then fall back people got to take profits at 4 ish.

    1. Perhaps just wanting to catch the small dips after the rise we have seen throughout the day? Depends on how long people like to hold doesn’t it I guess…

  40. I’m new to ftse trading and just curious how much of the 14 point ex-div is a factor to today’s rise ?

    1. It will never come when your looking for it….that’s the markets.
      US closed today so small trading day, Big divi coming, along with big money coming into the Market soon through Vodafone….could keep this propped up till early March……

      1. I’m not loooking for it. Nick has been saying for weeks that we have been due a drop to potentialy as low as 6200. Now it appears to have passed us by and its all gung ho onwards and upwards to 6700 and higher.

        1. I had that drop pegged from December last year? Rise in December to 6800 (it got 6880) then drop to 6200, it dropped to 6400 so not too bad!) now bouncing as you can see, probably to this 6750 area then down again, this leg down might reach 6300, then bounce again, then down to 6200

    2. We got half way there already with the 6880 drop to 6400; it will never go in a straight line so bounce back then probably drop again

  45. So wheres this drop and correction to 6200 that was being referred to throughout the last 3 weeks?

  46. Martin Nick not the only one calling a drop “Soros doubles a bearish bet on the S&P 500, to the tune of $1.3 billion
    February 17, 2014, 7:23 AM”

    1. Ahahahahahaha, that was the joke of the day.
      I love that Soros. He has been hedging the entire 2013 and SPX made more than 20% in the opposite side.
      Now he refreshed again is bet.

  47. A close above 16400 in Dow will pace another leg up and new all time highs.
    Fail to do so, will make markets gone to where they started early February.
    That’s my view.

  48. Suppose we will have to wait and see. I’m not sure Nick or anyone for that matter can accurately predict the way forwards. Its guess work all the way because all these pivots, resistence levels and supports can be broken in either direction at the flip of a coin, and whatever happens is just met with either; ”interesting that the 6564 was broken and we saw a climb to 6670″ – if he’s gone short or “As i suspected we saw the bears fail to gather momemtum etc etc” – if he’s long. Yes we can look at trends and ride the up or down movement but its still able to pull either way on the way. Im looking solely at what the move is doing and then placing my position with a stop to protect me and cut me out if i exceed a calculated %. If it works ill trail my stop and keep the trade alive with zero risk.

    1. Totally agree. Just look at the charts, make your informed opinion and trade accordingly. Sometimes it will go your way, other times it wont. If it always did as I thought I would have retired many years ago with a couple of trillion in the bank!

  49. DOW 1600 level is the Floor, any pull backs would see momentum towards last months high

    S&P500 1850 resistive area , a break above would show MASSIVELY BULLISH

    FTSE BOTTOM LINE is 6600 area, Any pull back on SHORT TERM charts is a buying opportunities to head towards the 6870 level

    DAX 9500 level on any pull back towards that level would be buying opportunities, before heading for the 10,000 level

  50. Just as a reminder, here is the outlook I did for 2014

    https://www.hilsdentrading.com/2014-outlook

    Ok so it only dipped to 6400 not 6200 on that drop in January but still not bad from mid December! It was at 6500 odd then, had year end rally to 6800 (done and a little bit more), decline to 6200 (done, though only to 6400), bounce to 6750 (done)

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