6670 to hold initially, bullish today?

Good morning. Yesterday’s long trade wasn’t quite as fruitful getting stopped out, however the FTSE (and Dax, S&P) is on a decent support area at 6670 as I write this so there is still a chance that the bulls can have another go at making some highs. Ended up being a fairly tight range yesterday with no really decent signals. Ironically (as is often the way with trading), once the long got stopped the price rose back up to 6700. So, whilst there is a chance that the bulls could take prices back to 6738, the daily chart looks a little weaker with an EMA cross brewing, and as most are still expecting a dip before the Santa Rally kicks in then it likely we will see 6600 before too long.

Asia Overnight from Bloomberg

Asian stocks fell for a second day after valuations on the regional benchmark index reached the highest level since May and as Samsung Electronics Co. fell and Worley Parsons Ltd. (WOR) cut its profit forecast.

The MSCI Asia Pacific Index fell 0.4 percent to 142.20 as of 2:12 p.m. in Hong Kong, with five stocks declining for each three rose. The gauge added 0.9 percent this week through yesterday. The Federal Open Market Committee publishes minutes of its October meeting today after Federal Reserve Chairman Ben S. Bernanke said the U.S. benchmark interest rate will remain near zero for a “considerable time” when central bank’s debt purchases end.

“There is evidence of profit taking,” Ric Spooner, Sydney-based chief market analyst at stockbroker CMC Markets, said in an e-mail. “Upcoming data beginning with tonight’s release of U.S. retail sales has more capacity to shift thinking on the timing and pace of the Fed’s taper program.”

Markets advanced this week after China pledged to execute economic reforms and Bernanke’s nominated successor, Fed Vice-Chairman Janet Yellen, said she would continue U.S. stimulus. Retail sales in the U.S. probably returned to growth last month, according to a Bloomberg survey of economists before data due today.

OECD

The Organization for Economic Cooperation and Development cut its global growth forecasts yesterday, citing a slowdown in developing nations. The world economy will probably expand 2.7 percent this year and 3.6 percent in 2014, instead of the 3.1 percent and 4 percent predicted in May, the Paris-based OECD said in a semi-annual report yesterday.

S&P – Bernanke

Futures on the Standard & Poor’s 500 Index lost 0.1 percent today. The gauge dropped 0.2 percent yesterday, a second day of declines, as investors weighed rising valuations and disappointing earnings forecasts

“The target for the federal funds rate is likely to remain near zero for a considerable time after the asset purchases end, perhaps well after” the jobless rate falls below the Fed’s 6.5 percent threshold, Bernanke said in a speech to economists in Washington. A “preponderance of data” would be needed to begin removing accommodation, he said.

“He’s just confirmed that the quantitative easing measures will continue, certainly for the near-term future,” Kirk Hartman, Los Angeles-based chief investment officer at Wells Capital Management, where he helps oversee about $331 billion, told Bloomberg TV. “We all know that the end of the Fed tapering is coming, the question is when. The market is hopeful.”

FTSE Outlook

ftse 100 prediction
ftse 100 prediction

I think the FTSE will follow the S&P fairly well today, which is predicted to dip to 1780ish before a decent climb back to possibly as high at 1820! Whilst talking about the S&P, if 1780 did break then 1769 is the next support. (Breaking 1792 will lead to 1797 and 1805, possibly higher). Anyway, back to the FTSE. Today’s pivot is 6699 and if the 6670 area holds then that is likely to be a decent initial target for the bulls. They will however be keen to push higher than that and if the US plays the game that could easily be the case. I think that this dip we are currently seeing is a bit of a bear trap and there is still a case for a bit higher. At the end of the day none of the fundamentals have really changed, QE is ongoing, tapering is still a long way off, etc etc. That said, the daily channels are heading down but we have both Bianca channel bottoms at around the 6630 area for today. That MAY correspond to an S&P low around 1775, possibly. Of course that depends on the 6670 area breaking on the FTSE. Personally I am thinking it might hold, at least this morning before the US comes online. I am still seeing a bullish rise on the S&P from around this current level.

224 Comments

  2. .. USD Advance retail sales due out today about 1.30, they are bound to “surprise” to the upside, just what is needed to revitalise the rally in the USA the rest will tag along, today and tomorrow not good shorting days in my view 🙂

    1. Totally agree…
      I think Nick has got it spot on today. I will be buying at the 6670 area and wait for the bounce

  9. China is heading for a crash: Xie – China’s economy is floating on a bubble of borrowed money, and the government’s heavy hand makes a crash inevitable, writes Andy Xie

    1. T-line closed above for 2nd day straight, but markets right now, seem with no long-term direction. Limbo between up and down

  11. “At the end of the day none of the fundamentals have really changed, QE is ongoing, tapering is still a long way off, etc etc.”……. Just wandered what fundamentals are you talking about Nick??? In my view, the markets, this year have nothing to do with fundamentals because if it did, we would be at ab.6250 on FTSE and ab. 15% lower on DAW, S&P and DAX. I wouldn’t be so sure about the tapering either. Long way off??sais who?? All those 40 or so economist who were so confident before the last ECB decision that they wouldn’t cut??
    No one really know, what the FED will do and when!!Even helicopter Ben didn’t say to much whether they will and when?. He did mention, that interest rates will stay pretty much where they are for long time. THAT, has nothing to do with tapering!

  14. But the 60 minute chart shows a IHS brewing. >We are right now in the 2nd shoulder, with neckline about 6730-6740. The target could impulse the price to proximities of May high

    1. maybe another spike down at 6650 area before it goes to neckline, or we may have seen the bottom.

  15. Think I might just sit this out until the ‘Santa Rally’ kicks in….. 🙂 … Only 5 weeks to day until Chrimbo!

  16. Daily channels for the S&P 500 and Dow still look robustly bullish to me. It will be interesting to see what effect tomorrow’s high-level POMOs have – they might spike the series through their respective upper bounds. I think it’s worth keeping an eye on the short-term 1 hr. channels though; these are pointing down, taken from Nov. 18. The S&P 500 is the more strongly negative of the two. The worry is of course the likely effect on the FTSE if these latter short-term trends intensify. Not what I wish for!

  18. Whew, still holding long, expecting a rise all day, perhaps a dip at FOMC meeting, but definitely looking at a respectable high today. Good call, Senu, i missed a couple of shorting opportunities, though rather play safe with the long, from yesterday I might add! Average 6682 open

      1. I had assumed that on the basis that we would get 6720, however as you know yesterday was a pitiful day for traders. Hopefully today will be a rise to then start a dip into next week, would be a repeat of last year where we got the dip before thanksgiving/black friday where we saw a bullish rally to Christmas.

  19. Low of the day in? what do you reckon lol… I’ll be going Long after 1:30pm, hopefully on a nice dip, who knows. Markets really tough at moment.

  20. Last 2 days my views have been opposite of Nick, Today i am expecting a down day (definetly not the bullishness nick or most of you guys are viewing)

      2. But I’m now for the short term, as I said earlier, unless I catch a good place and timing.

    1. thx .. SL at 6699 if this trade loses im out till christmas rally.
      Either the FOMC minutes or retail sales will have a negative surpirse to drop the markets..my opinion (shorted at 6680, SL at 6699)

      1. That’s what I am thinking too; don’t want to be wiped out just in time for the ‘Santa Rally’ kicking in and miss out on any (potential) (“easy”- but when was spread-betting ever easy 🙂 gains 🙂

  32. all smiles again got my points back…now for the next entry any ideas-its still looking like a buy the dip scenario

    1. we`ll have to see what happens at 6:30, personally for me it will set the tone for the next few sessions, looking to short for tomorrow if we get 6620-30 area today

  33. anyone notice todays relative outperformance of ftse now relative to dax.. Is it back (after a while of laggin). Boe minutes wrt to rate rise may be correcting the some of the relative underperformance;

  35. aahh, sorry…i`m on the mobile browser, i`ll stop posting cold fingers can`t touch that dang 7 figure.. and dang it is bloody cold.

  38. 3rd time knocking 16K dow and 1800 on the snp. Seems today the bulls get their way and I hope ftse follows

    1. Daily chart has been posting a lot of “Lower Highs” since beginning of month. The FTSE looks very range bound 6650 – 6720 area.

      How have you decided to place your stop?

      I dont think you are in too bad shape

  41. Jack Two – Why dont you follow my theory…. do your charts > pick your position and entry> and then do the complete opposite of what you actually thought 🙂 if you get it wrong all the time usually, then surely this way is a no-brainer…?

  43. Jack, do what you will. But the volatile movement now always happens when the DOW opens. Best to pull out the short, and DOW will make a good run with positive figures from data

      1. That’s it, that’s my patience done 89.5. Couldn’t bear it any more if it went down now. Lost today again in total.

        1. all I needed these 3 point and now they went as soon as I closed. they just don’t give me when I need it.

  47. Wow Jack you could have just kept that long and left your computer. Sometimes you should leave your trades alone rather than stare at the minute chart movement…

    1. I was crying I was in a state. I wanted to end it. This retracement annoyed me to bits. It just didn’t go long for such a long time I coulndn’t bear the pain anymore.

  49. BUT Ahwab … im very very itchy about this long …my mind and analysis totally focused on short (at least for last 2 days)…and i hate shorting btw lol

    1. well im gonng be honest..JUST NOW my indications are showing to stay on the mofo side lines..im gonn exit the long soon. Seriously FTSE last couple of days been moving too much sideways.
      for last 2-3 months its been piss easy to trade ftse my sharpe ratio been 2.77 (1 year average).
      This month because of last couple days has been terrifying, first month in 6 months im gonna have a down month.. unless i can still catch about 50 points with decent risk.

    1. Im done now, nothing I can do, I suppose I need to try another day. In the morning I took long so early following Nick’s prediction, who would have thought it would drop to 6661 or something, so I managed to recover but close with a little loss then I take short at 77 before 1 pm and add at 84 av 81 and it goes to 95, I am already in a stake, 1st day after I was ill I traded today, so I come out at 85 or something with a loss and take long on which I only had 15 pounds. I lost 50 quid today (my 16 points). Not good at all, I need to win money very badly otherwise my life will never change.

      1. Yes, Senu, you are right. On other day I would have held. I’ll recover my emotions for other day and watch my videos.

    3. Honest as always Jack.

      The hard fact is this. You simply cannot make money trading this way. Emotions will always get in the way of rational thought and risk management.

      Spend some time studying daily charts. I think you might find a decent level of success trading a much longer time frame.

      Good luck

        1. True, it is like the bookies ‘binary bets’, they make most of their money on the short time frame bets.

  58. *ECB SAID TO WEIGH MINUS 0.1% DEPOSIT RATE IF MORE EASING NEEDED
    Of course, we await the official denial but suspect this is nothing more than attempt to gauge market response to the policy idea (just as Draghi did in May). For now, EURUSD has dumped to 1.3480, and US equities are soaring…

  63. Been long all day at 6670… Saw that spike, big smile. Went to get a drink for 5 mins…came back to daylight robbery.

  66. Away from the desk for 20 minutes and I miss cashing in at 6715 from long at 6670. Stop at b/e now, just ganna wait it out, hopefully will rise again, maybe hold for a rise tomorrow

  67. I swear to god it looks like ftse gonna give away (or stealthy moving lower n lower)….turning points are coming down every day

      1. See nothing crazy in 4 hours, just shows it might be at a turning point … englighten me.
        And i think most people here are getting it wrong for short term (they trading super short term).
        Really really do believe markets either going side ways for a while OR
        Drop coming.

      1. the only thing that can keep this market a float is amazing FOMC minutes…..and thats kind of going against the grain because majority retail traders have long positions…maybe its their turn to make a bit of money before they lose it? thats the only worry for me.. theres no decent news for the markets to be lifting up..specially when US is near all time high!

        1. See Jim, the scary thing is that 76% retailers short on Dow
          and 57% long on ftse..
          Most of times market moves in opposite direction (for ftse usually the limit is 60%).
          So right now 57% long means..MAYBE the market may move up dragging in more longs.. and then suddenly drop.
          We hit the 60% long limit this morning on FTSE and market moved up just slighly and that percentage dropped to around 55%.
          Also how can you expect such massive positions in opposite directions in equity markets?
          Would you expect FTSE to drop while US gains ? I highly doubt it as they are very correlated.
          S&P, DOW, DAX .. majority short (meaning go up).
          FTSE majority long (meaning go down).
          So its very very very hard to say where it will go.. hence why id prefer the side lines.. but have a view that there will be a correction coming in either FTSE or other big indices.

          3. it makes sense to me. FTSE as always is lagging the other markets. What it means is that FTSE will go up (where you say meaning go down), but in a slower pace

    1. I agree with u on that Ahwab.
      And i think ur probably agree with that FTSE wont be able to maintain 6700+ 🙂

  71. Yes still do have the long, I know we won’t be in the 18000.1600. Or the 6700 for long, but still looking for spike up to signal a downtrend. Today’s fomc would be the perfect excuse

      1. .. dont forget the POMO day, no shorting until late tomorrow or Friday at the earliest, unless your in and out aka “hokey cokey” trading 🙂

  72. Glad I never took that long at 6888… 🙂 Beginning to think the only way to ‘win’ this game is to not play… 🙂

      1. Oh, wait a minute it made it to the dizzy heights of 6713, well, held on to as it tanked… you know what I mean lol 🙂

        1. You had to be really quick on the trigger there anyway, a moments hesitation and you would have lost your points. I bet most people held out for more points lol

  74. Just ganna put it out there but Ahwab is usually right lol… I sure wouldn’t bet against him. I’m sorry if I have just ‘jinxed’ you now though bro lol

      1. You have got fast impulses, it dropped like 4 points from the hourly high and you put short straight away lol…hmm..

        1. Ahwab lol either im fking myself up here or im correct.. everything points for me atleast in the down direction.

          1. but yes.. this the the most trades ive put in 1 year (in a single day)… most likely im doing something wrong.. hope not lol.. usually only do 2-3 at most trades a week

  77. Is it just me or is everyone forgetting about Santa?
    I am sure in the current climate Santa will bring presents.

    What kind of a market correction are we talking about 1%, 2%?
    Sure I agree, but if it does not happen soon, it will not happen for this year IMO.

    Still just buying the dips, next buy is at 6620.

    1. why is everyone sooo fixed on “santa” rally…if such rally was easily predicted/guaranteed then alll traders stupid trading and risking their money every week. why not just trade a fking shit load of risk on that rally and make millions?

  84. If ftse closes at 6660-65, i`ll be inclined to close my long and go bearish, but we`ll see where the DOW and S&P goes,

    1. Lets see..ive been bearish view since yesterday lololol fking costed me a bit with these little swings..bloody volatility.
      Got a decent size short running from 6686 now.
      Gl Ahwab!

        1. ive cut half at 6657 (tomorrows S1)…as there might be rebound. But overal im looking at 6620 (short term).
          Despite saying this..i believe people are underestimating this pullback…cant say much about it now need to see how the market/retail traders might react.

    2. I think we are going to see 15800 some time this week. That should give good buying opportunity for Santa rally.

  87. Nice one Hashmash, but I’m keeping my long , got enough capital to keep me alive. Atm only use 15 pp so not costing me a lot.

    1. I dont scalp…think its stupid lol.
      Just last 2-3 days ive been churned by the markets was long/short/long/short/long…short lol

  94. Key that 1778/80 held on SPX tonight… Happy to hold my LONGS overnight as we have some big Gap Fills in the European markets. Next couple days key. All markets could bounce to new highs, as the correction on SPX / DOW is what i had down as Target 1 before new highs… If SPX makes a break for 1740 then FTSE will prob be targeting 6550 ish level. But for the moment longs are safe.

    1. Good chance ftse might see 6686 tomorrow hence why ive taken 50% of my shorts off already (but that should be a shorting point for me to rebuild shorts)

  95. Ahwab…..have been reading your posts more so lately with great enthusiasm….great confidence in your trades…can you let us in to your little secret
    of how to remain patient once a trade is placed?

  96. With you Andy.
    PS ruzwan the key is to have faith in your trades and chart analysis. The reason I guess people lose money fast especially in the last few days is fear, they change their positions/over trade when the position looks against them, close it then it reverses and they are in loss again….like Jack Two.

    Ps agreed Andy that 6670 still looks significant, today was a chance to take some bears in the afternoon out and some bulls tonight. Expecting some good rise, indeed there are some gaps to fill

  97. I really much emphasise what Ahwab has said… Jack Two without sounding harsh the markets aren’t for you. For every trade there is people who agree and people who disagree, there is never one right trade, you just have to use your analysis and charts to give yourself the best chance of picking that right trade.

    Constantly changing your mind and switching positions based on what people say or the market going against you slightly is a recipe for disaster. Have a plan, stick with it and have confidence. Even people like Nick probably only get 60-70% of their trades rights. But risk reward is essential, stops are key and letting your winners run is essential to swinging the balance in your favour. There is no short cut to good research and following your own charts. Use Nicks and other peoples thoughts as a reference point only.

  99. I think we may see tomorrow a revisit to 6650-6640 in the morning, before a rebounce. This would reinforce that 2nd shoulder in the IHS

  100. Andy: I agree with you, I’ve been waiting for a pullback on DOW to go long, I’m just surprised it didn’t drop further which I take as a show of strength

  101. Thanks Awhab….I guess I really need to take time out and rethink my strategy…I was fortunate enough today to take 90 pips on the Dow drop….should have stopped there. Stupid me..decided to keep on trying to guess and scalp the rise back up and managed to lose 80 pips in the process.

    1. im short.. but looking for a rebound to 6684 tomorrow morning to add to shorts.
      This is my view right now but can change depdning on how the market opens.

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