6662 support, 6725 resistance (again)

Good morning. Well that was close, had the short order in for 6727, having said the high for the day was probably going to be around the 6725/6730 area and low and behold it just missed the order, topping at 6725.8. Still, not too far out and judging from the email quite a lot of you managed to get on it anyway. Thanks to the Ukraine situation again the bears managed to get some downward strength bottoming at around the pivot area and hitting the long order at 6677 before the bulls brought it back up again. Even if I do say so myself, the gold analysis was rather spot on too, with the support at 1271! Also thanks to Ukraine that took off to 1300! Not too bad yesterday in the end.

Unless the Ukraine situation really spirals out of control I would say that the FTSE trend is up still for the moment with a potential 6900 on the cards. 6665 support will need to hold today, being yesterdays low, though with it being Friday it could in fact do anything, especially with US consumer confidence data out later (13:55).

Asia Overnight from Bloomberg
Asian stocks fell, with the regional benchmark index heading toward a weekly loss. Wheat climbed and nickel traded near a 14-month high as the U.S. warned Russia of an “expensive mistake” in Ukraine.

Hong Kong’s Hang Seng Index dropped 1.4 percent by 1:07 p.m. in Tokyo, with the MSCI Asia Pacific Index heading to a 0.8 percent loss for the week. Standard & Poor’s 500 Index futures were little changed. China’s yuan touched a 16-month low. Wheat contracts rose for a fourth day, adding 0.3 percent as soybeans and corn rallied at least 0.2 percent. Nickel was little changed at $18,348 a metric ton in London and is headed for a 15 percent jump this month as tensions rise over Ukraine.

U.S. Secretary of State John Kerry said Russia will be making a “grave mistake” if it doesn’t halt provocations in Ukraine. Russia is the world’s fifth-biggest wheat exporter, followed by Ukraine. Tokyo’s consumer prices rose 2.7 percent in April from a year earlier, the biggest jump since 1992, driven by a sales-tax increase and stimulus from the Bank of Japan. The U.K. releases retail sales figures today.

“The level of tension between the U.S. and Russia is obviously fueling concern among investors, lending support for assets like nickel, wheat, palladium and oil,” said Kazuhiko Saito, a Tokyo-based analyst at commodities broker Fujitomi Co. “Even though we may see some technical retreat after a strong rally, the trend is likely to continue as the situation isn’t going to resolve itself anytime soon. Commodity prices aren’t much help for the global equity market.”

Liquor Slump
The Hang Seng Index is heading for its biggest weekly retreat since March 14, having lost 4.5 percent this year. The Hang Seng China Enterprises Index (HSCEI) slid 1.2 percent and is headed for a second straight weekly drop.

The Shanghai Composite Index swung between gains and losses. Kweichow Moutai Co., the country’s biggest producer of baijiu liquor, plunged 7.9 percent after first quarter profit growth plummeted. The company joins other global makers of premium spirits including Pernod Ricard SA, Diageo Plc and Remy Cointreau SA in reporting slumping sales amid a crackdown on extravagant spending among mainland officials.

The Kospi index in Seoul fell 1 percent, while Taiwan’s benchmark index dropped 1.9 percent. Markets and Australia and New Zealand are closed for a holiday.

The S&P 500 rose 0.2 percent in New York to near a record. Equities climbed in the U.S. as earnings from Caterpillar Inc. to Apple Inc. beat estimates, with data on services and consumer confidence in the world’s largest economy due later today.

FTSE Outlook

FTSE 100 Prediction
FTSE 100 Prediction

Looking at the Bianca chart for today we still have 2 channel tops at 6725, and with yesterdays high there that will be the level that the bulls will need to break. As I mentioned above it does feel slightly optimistic for a rise to 6900, and that might actually set up well for a drop from May time for the old “sell in May and go away” saying.

For today, we have support at 6665 and below that at 6615. Unless Ukraine kicks off again or some other event I expect the 6660 area to hold. Todays pivot is now above the current price so likely to act as resistance initially, being 6698.

The 200 ema on 30minute held well yesterday as well and if we get a test of that today it could do so again, maybe with a little overshoot to 6662. As such I am thinking once again the familiar dip and rise for today as we also have a fairly decent 30minute channel in play, the bottom of which is at that level too. the top of the channel is 6730, but with the Bianca channel at 6725 I expect it will stall around that area.

136 Comments

  1. Does the market have the strength anymore ?
    The charts – look as this to be unlikely !

    What are your charts showing JIM ! Still Bullish on the day chart ?

    DavRos – any change of emphasis –

    Hashmash – You still think buying the dips is the strategy you want to take ?

    Rob

    1. Very undecided so currently no position. My daily trend is moderately up and the 4 hour weakly down so bit of no mans land (again!). Ill probably do a quick intra day if conditions present eg short 6700 or long at 6678 which seems to be offering support maybe 6662. I might hold a short over the weekend but not a long at moment as Russia could flair up over the weekend.

      As someone else noted earlier I too have sold a lot of my equities in last 2-3 months – tend to focus on FTSE 250/”decent” AIM and quite a few have topped out after a good few years so do wonder if the bull run is running out of puff. Dont know which party of the market would lead a more substantial downturn?

    2. Hi Robgreen,

      Yes buying dips today is the way to go,
      if im deep in the profit then i will only close half my position and hold the other half long through the weekend with SL like 10 points in profit.

      I like catching the big trends, i only need like 5 good trades a year, honestly i think thats what everyone needs to have significant returns YoY

  4. FTSE/4 hrs. — My growth indicator has been easing down this week and is now just below zero. Growth has certainly flattened out. LinReg 100 is still pointing up but LinReg 20 looks uncertain; it could fall. The 1 hr. chart looks more precarious. Sold some shares this morning!

    1. Couldn’t agree with you more

      This market looks like it wants to roll over
      as far as today is concerned.
      Charts are looking very clear on that
      been selling into any move higher
      A test of the 6640 area looks on the card

      1. ahh so our indicators are not same hehe…
        mine still saying bulls,
        nicks set up will play out perfectly today i think,
        ive added more again a 6672 today.

  6. Still short looking for a test of 6640, don’t feel the downside in Dax is done yet and should push through yesterday’s lows with the weekend coming
    GG

  8. i m holding my long from yesterday at 6702..should i keep it? charts looks bearish though..but confused :/

    1. Isaac – I think I’d be tempted to close it out as it’s neither a good buying price nor a good selling price given the range that we’re experiencing this week.
      Offcourse this is only my opinion –

  10. I personally see this setting up for a break up in a couple of hours, lower highs into 6680 then I break up, probably on confidence data later

  14. 6675 – looks like the last support on the chart
    When this breaks – a 40 point move is inevitable
    & it is looking more & more like doing this.

  17. Long 6678 hoping for a run somewhere to 6725 but like a lot of you don’t know if the market has the strength for that

  20. lol. Just realized now that a order in SPX 1875 was triggered yesterday at lunch time.
    Now looking for 1895.
    So busy that I forgot completely. Hope next week to start again my rhythm in markets

  21. I have S1 at 6676 and working off the 30min chart we are right on the cusp at the moment. If you look at the 1 hr chart if 76 goes then 6633 is bottom.

    My hunch is this should break up now.

  23. Bearish engulfing on daily and 4H for DOW after a strong uptrend. The low of bearish is also broken. So I think DOW will go down.
    Others thought will be helpful. Thanks

  24. only ace in the hole right now is that confidence report..
    if i dont see a jump then, im closing longs and finish trading for today.
    im in a profit right now soo i can be a bit relaxed.

  26. see the thing here is that, the economy is looking ok…company earnings are good.indicators look ok, the chart is behaving oppositely though, manly due to ukraine.
    its an uncertain position to be but for me everything points up (but the chart doesnt seem to be running with same mentality)…
    hence my decision, i’ll wait till 2.55pm for the confidence report, if no fireworks i will close my positions.

    1. one question for you
      with your strategy – how do you manage the drawdowns
      incl. any profits drawdown ?

      1. Sorry, i dont think i understand your question correctly :S.
        Do you mean how do i manage with drawdowns mentally? Or through strategy?

    1. yea same, BUT…if the confidence report dont boost it up, then i’ll lose confidence and believe we will be stuck around this level till another catalyst presents an opportunity./

  30. Not looking very promising. Closed long at -6 pts.
    I agree with hash thinking but rightly said the chart is showing a different picture.

  31. Seems very much in no mans land ( my novice opinion) I am tempted to short if this gets a spike up when DOW opens . I have a feeling a sell off later coming the weekend
    with Ukraine going on.

    This indices stuff is very difficult to call but some very good posts on here helping my learning curve.

  32. Key here is 6695 if we get through that then I am more confident if we bounce off it again its looking more likely of going down

    1. Marco , Been off work this week and been studying this indices game. I see the DAX
      has some serious swings do you trade that ? I have a few times but you need Valium
      for that..

  34. Marky did made a shed load the first time then lost a shed load the next few times…! Just could not see any patterns or if so just moved to quick and randomly. Just stick with FTSE now learnt my lesson jumping around.

    1. Marco I agree .. Like the DOW 30 both with 30 companies on each Index makes for a lot more volatility % wise . I can’t get my head round why the FTSE shadows the DOW as when it feels like it can’t see the logic .. Then goes off on a complete tangent

  35. FX .. Thanks I’ll have a look . I look at FX empire a guy on there is pretty good.
    Nick seems pretty spot on most of the time and a good set up here . I’ve been doing this on and off for a year and sometimes think I should do the opposite of what I think ha ha .

  36. Nick is bloody good, although I sometimes think he is a bit risk off when he places his orders and just misses out.

  42. Someone or something hawking seminars is offering this pdf

    FX Trader’s Guide to Trading the Moods of the Market

    1. to me this day i prefer over the last 2 weeks with hivol and markets all over the place.
      at least we havent been moving from -30 to +30 and then back down -30 lol

  48. Chartists have always said – that everything is on the charts !
    If they are correct – this chart moving eco news should already
    be factored in !!

    So which way are we going to go – after the news ?

  50. all this drop is on russia … nothing more, once it blows over markets will resume uptrend…

      1. I wouldnt agree with “good news bad news”…
        The economic reports arent impacting the market as they are being shadowed by russia concerns.

        1. You are probably correct
          But the reality is – whatever the reasons – this
          market is just hanging on to its position by its
          whiskers

  55. Which means it will bounce now, I don’t want it to as I’m still short but 6668 is proving a tough nut to crack- like Hash, I’m getting out for small profit in case this does a Friday special and bounces, which it really looks like doing. GL all
    Mr Grumpy Bear

  56. Hashmash

    What are the determining factors that persuade – you to
    keep holding onto your positions overnight & how do you
    manage them ?
    When do you decide to take some risk off & when do you
    stay risk-on? both from a day perspective as well as on
    an overnight basis ?

    1. To answer this as accurately as possible, i treat my trend indicator as the holy grail. If my indicator is showing a direction then I look at the indicators such as RSI/Stoc/macd and pivots – these help me with my execution.
      so:
      1)”keep holding onto your positions overnight” – I would say the main aspect here is knowing if markets which trade overnight such as China/Australia have any major news coming out overnight. If there is then that news needs to be in my favour, also indicators such as RSI need to have room for a move in my direction, i also calculate pivots for next day and try to use them to help me guide orders overnight..

      2)”How do i manage overnight positions?” – Well… If im in a significant profit and the news is in my favour and theres room in the indicators such as RSI then I may even build my position (using the next days pivot as well). Also there are times if im unsure of whats going on I will either reduce my risk or close it totally (unless its in a huge profit).

      3)”when do i decide to take risk off? Well this not very easy to say in a couple lines. But like today, news came out as i expected (confidence), market didnt move in my direction…and now its just stagnant – also a friday with ukraine talks – clear signal to not hold ANy RISK over weekend as im not in a significant amount of profit.
      Another example, if my main indicator showing bull, and RSI/Stoch etc max out, good enough sign for me to cut my risk and re-enter at lower levels if they are to be seen, very rarely would i close a full position – unless ive caught a significant move e.g 3%.

      Probably doesnt answer all ur questions, but hope it kind of gives my mentality.
      I just don’t see the point of trying to trade for 10-20 points – waste of time, mental energy and waste of risk. I believe if u want to trade, then trade the trends – over a period if you have a sound strategy + discipline you will make money, none of us can scalp and be successful, we dont have the technology for that.

      1. Thanks

        It fits in to a lot of what i am trying to do.
        But the Overnight – On-risk – still defeats me.
        There is really no way to factor this in. A Blind spot
        in trading – which i think will remain

        1. u ofc have to keep an eye out for news which may move the markte against u, if u see that then ofc cut risk

          1. I do not have any problems regarding interpreting
            charts. but have been trying to use a precise
            instrument for trading it – this has resulted in failure.
            a blunter instrumental approach is what will work
            & this is what i am honing on

  58. Hi belly
    Yes still holding as 75 not Brocken yet. Only holding on the off chance we get a rally after close. Perfect example today of you cannot predict even on news what the hell the Dow will want to do.
    And good example of why Fridays are crap for trading.

  61. Good fight Hashmash… As for Luke and fellow bears enjoying the ride down. Intending to close DAX and DOW today think a small bounce then more downside. Ftse to break 6600 next week.

    1. LOL wudve been £1k in profit right now haha, ohh the hindsight….oh well didnt take much loss, wouldve closed now for sure anyway, too unpredictable with weekend ahead

  62. Ahwab closed my dax yesterday for 210 points was more then pleased with April profit, but did say yesterday markets were looking more bearish.

  63. Nice one, managed to recover my losses from Tuesdays crazy rise, cashed in on 260 pips on both DAX and DOW after losing 90 odd. Now to wait for a pullback and see what happens…
    Btw good call Nick.

    1. lol not being an ass…but why the good call to nicK?
      its like if i say market today will go down then up, and that happens for 30mins of the 8.5h of the trading session – does not imply it was a good call

      1. Totally agree with you.
        I have been watching the calls patiently over the past 2 months.
        Most of the calls are preety iffy at best.
        If you want to see something into it – Then definately you can,
        massaging with time & or price level.
        What i have found is that market bounces off support & resistance
        – so yes – it will bounce off pivots / moving avg or whatever
        at some time of day.
        Today was definately a sell on any small rally day, & that is really
        what matters. On that account – ” buy on any dip ” was only good
        at end of day – you can put whatever you want to it.
        I have found it difficult to trade on solely based on the calls

        1. hahaha Luan if all tht is so easy y don’t u open urself luanddaytrader.com n do the same …. Nick is excellent with his calls … u didn’t utter a word while the game is on … n have come out now when all look a bit more clear …

    1. Gosh, great I didn’t read all these comments today, it would have spooked my short of Dow, +87 points.

  68. Hashmash, I was speaking in regards to the call on 6665… got me 20 points on the bounce so it was a good call

  71. Can anyone explain why the FTSE is drifting up after the DOW closed on IG, sorry if a silly question.

  73. Damn. I was just about to close my dow long for a quick 15 points and it closed as I clicked close.

    1. It’s bad luck. Tbh I sometimes don’t know when it exactly closes so I try to close at around 19.30-20.00ish not later. Hate to drag it to 21.00.

  77. The whipshaw movement late friday opened up short positions then likely stopped them out on the rebound back to the daily pivot. Fully expecting an open around 6660 and then a quick test of 6640. Time to short the rallys. 2014 is bear time. http://reut.rs/1hwrCGK

  78. If nothing major happen with Ukraine & Russia over weekend I believe Monday and Tuesday will be up days level off Wednesday choppy Thursday down Friday that just how I see thing

  79. if nothing happens over weekend i see monday bullish with steep backon dow to acomadate ftse more move forward watching the 2 all evening friday could see a suport structure being set up for a possible quick dash to top or even furthure which started to play out at nine o clock had just closed long on ftse before 9 still holding long on dow small stake …… will see how things go sunday eve at open

  80. The markets are looking tired. S&P stuck below 1900 and Dow at 1660. The only way is down, suprised the ftse never made an all time high.

  83. Think the drop back is coming before any further movement up as shooting stars on Dow and sp500 last week

  86. Big long order for ftse placed at 6665 – monday gonna be a slow day in my opinion.
    Fireworks to start on 29th

  90. Took a short on the Australian 200 at 5553 may take a couple of days but think there a 50 point drop in this short.

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