6720 support today?

bianca trends
bianca trends

Good morning, well we have hit the 6750 overnight, after Fridays slow drift up. Once again its eyes on stimulus measures as Fridays consumer confidence figure was weaker than forecast – thus giving hope for extended QE. Not to blow my own trumpet but I have said since they first mentioned tapering that it wouldn’t be till 2014 at the earliest, and I still think that is the case.  All the weekend news was dominated by “the great storm” and the likely travel chaos this morning.  The US phone tapping story continues, and they won’t be happy that’s out in the public domain at all! Anyway, the 10 day Bianca channel continues to hold and with the bottom at 6720 and the top at 6778 its still pretty narrow, but dips to the channel bottom being bought is still the preferred play for the moment.

Asia Overnight from Bloomberg

The MSCI Asia Pacific Index gained 0.7 percent to 142.32 as of 12:29 p.m. in Tokyo, with all 10 industry groups on the gauge rising. Investors are awaiting industrial production data today from the world’s largest economy, the next barometer for clues as to whether the Federal Reserve will delay scaling back U.S. monetary stimulus.

“We are in a liquidity-fueled stock boom,” Matthew Sherwood, head of investment markets research in Sydney at Perpetual Investments, which manages about $25 billion, said in an e-mail. “Rising valuations have never stopped overheating markets, so the market rise could be extended, as long as central-bank stimulus remains in place.”

The MSCI Asia Pacific Index fell 1.5 percent last week, curbing its October gain to 2 percent, with the measure on course for a second monthly increase. That pushed its price-earnings multiple to 13.6 times estimated profit on Oct. 25 from 12.7 at the end of August, according to data compiled by Bloomberg. That compares with 15.9 for the S&P 500 and 14.8 for the Stoxx Europe 600 Index.

China Bets

Chinese brokerages are betting the biggest jump in money-market rates since June’s record cash crunch is a sign of strength in the nation’s economy rather than finance-industry weakness. The central bank has refrained from injecting funds into the banking system since Oct. 17, driving the benchmark seven-day repurchase rate 138 basis points higher to 4.88 percent last week, the most in four months.

S&P Futures

S&P 500 Index futures rose 0.4 percent today. U.S. stocks completed a third straight week of gains on Oct. 25, sending the S&P 500 to a record, as earnings beat estimates and weak economic data fueled speculation the Fed will delay reducing stimulus. Consumer confidence in the U.S. dropped to a 10-month low, a private report showed Oct. 25.

A two-day meeting at the Federal Open Market Committee will start tomorrow after U.S payrolls rose less than projected last month and the 16-day government shutdown took at least $24 billion out of the economy.

The Fed is likely to delay lowering its $85 billion in monthly bond purchases until March, according to a Bloomberg News survey of economists conducted Oct. 17-18.

FTSE Outlook

ftse 100 prediction
ftse 100 prediction

Nothing really bearish around at the moment and still experiencing the slow drift up, and will do till the next area of resistance at 6778 I feel which is the top of the 10 day Bianca channel.  With the bottom of the channel at 6721 then movement below that will get the bears interested again. I am still cautiously bullish as I was for the back end of last week, and bearing in mind that this rally is mostly being driven by hope of delayed tapering. However, trade what you see, and at the moment the trend is up. Today’s pivot is 6717 so another reason that a long at 6720ish should bear fruit. Its worth noting that on the daily chart we have a big ProTrend channel, with the top at 6804 and the bottom at the 6470 area. So bear these bigger picture figures in mind too. I have gone for a somewhat optimistic start today, mainly as the EMAs are pretty positive and I expect the 6730 area to hold initially. However, if it drops a bit further at the start, towards the pivot/support area at 6720 then the first trade will be the long. If it all goes pear shaped initially for the bulls then 6698 has support if 6720 breaks. If 6668 breaks then I won’t be cautiously bullish anymore, but outright bear!

65 Comments

  2. Nope I`m out at a loss of -8pips, i`m guessing too many people buying, i mean look at IG stats -.-.
    Just going to wait out for a bit

  3. FTSE/4hrs. – LinReg 10 crossed below LinReg 100 on Friday. (It crossed above on October 10 at the beginning of the current upswing.) The index has now fallen below both variables, so we could be seeing the start of significant cooling.

  4. How is the storm out there ? It seems we are for a monday morning sell and some extend to afternoon.
    I expect the uptrend resumes overnight, as the storm goes away

  7. HI All,

    Nick H, are you still holding the longs? If so what are your stops set at?

    Was that the 1st arrow down ?

    Thanks Nick

  9. Not sure, all what Nick’s chart is saying to me – be cautious as it’s choppy.
    I think market will not manage to go so vigorously up and down in a space of 3 hours as I don’t see any volume today maybe because of the hurricane. So I think it may rise to 6730, then drop and rise higher.

  10. Going long may be not a good deal. FTSE falling from overnite highs. Dow futures gave up all gains and now in red.

  15. Don’t really think shorting is a good idea, it is dropping yes, but not a free fall. We are still in a very strong uptrend, but heck so many people going bullish it certainly would be a convenient time to drop

  16. P.s I think Nick has done his customary too fast the market prediction. I reckon we will get the one rise today, with another dip overnight again

  19. Yes, I’m looking at the direction DOW ATM, looks bullish hopefully it might drag the ftse up , however if DOW breaks 15540 I’m pulling out my ftse position, just in case

  22. October 28, 2013 at 10:59 am from 85.138.98.153
    How is the storm out there ? It seems we are for a monday morning sell and some extend to afternoon.
    I expect the uptrend resumes overnight, as the storm goes away

  23. Opened a cheeky one at 6720, couldn’t help it, short stop at 6708. Hopefully I can get into good spirits for tomorrow’s game..

  25. Hopefully today’s dip would make a nice springboard for tomorrow’s rise. As we always get a moment of consolidation before further rises

    1. I think we’ll get a big rise after 9pm when apple post results. Their 5S sales have been just above expected in the UK and they have really stocked up all the outlets with 5C’s which have sold well in the UK. the Iphone’s are apple’s most profitable device.

      not 100% but sensible interpretation of data

  28. Is it just me or does going long seem to be working every time at the moment. Love this market. Just keeps drifting upwards. Wonder how long this will last…

  29. Recovered my losses today(stupid ones at that), looking for 6744 possibly before close to touch the daily pivot.

  33. I am not so sure about all this bullishness. I read a Bear market coming like a storm…lol
    November will be Bears all the way and then December we will see that all year high. I think tomorrow we will see the bears do their work…

    I have been wrong so many times, but my gut is talking and that has been seldomely wrong. Then again, no one trades based on a gut feeling 🙂

  34. It’s hibernation time for the bears, I will only believe it when we actually SEE some dips, otherwise that daily is strong. I’m sure most of us are bandwagon traders, so best to stick with it rather than pre-empting the market. Trust me, I know from experience…

  35. True, never trade against the trend?
    Well I was right on Apple, after hours show a massive tank, that will have some effect on the Dow and in turn on the FTSE. I am not saying it will be a massive drop, but I don’t see the FTSE climbing much more until start of December…
    It will be a steady down and rapid climb in December 🙂
    Have two shorts open on FTSE with wide stops. Basically putting all my profit from last week on the line…crossing fingers and watching after market 🙂

      1. What goes up must come down.
        Novembers are historically not great for markets. Profits are down and it’s the calm before the festive storm. December would be my Bulls and year high this time.

  36. Aaah, I’ve got my positions still bullish. Still waiting for Ftse to hit another high.
    Personally, we normally get decent drops/downtrend on the back of some major resistance/negative data/politics.
    Good luck

  40. DISASTER STROKE! CityIndex changed their chart package, I can no longer access my old charts with all my indicators (get along indicators – new charts don’t have protrend lines they automatically put, the price stuck to the right hand sight and it’s awful design. I don’t know really what to do now. It’s the end of the road for me. I am utterly distraught and cried. That’s so painful.
    It’s only because of their charts and protrend lines I could place those trades.
    Of course I called them and they said they will pass it as a feedback, but they said that the package changed for the whole platform, of course they understand…. they are willing to help…. bla bla bla, but what am I supposed to do in the meanwhile?
    Now there is no difference with SpreadCo with offered the same type of charts and they are fighting for having me.
    The only similar charts are left at SpreadEx, which I opened now but what I don’t like on Spreadex is a very suspicious activity out of the trading hours and the color scheme which is harder for eyes.
    I cannot use IG, Intertrader and Capital Spreads, so I don’t really know what charts they offer, unfortunately but this is a fact.
    I am totally distraught and it seems that it’s the end of the road for me. I will not be trading any more……. (CRY)

  42. Bear market in its truest sense, which is a 20% correction, is of course a very strong term. I don’t see the conditions for that in the short to medium term. However as mentioned several weeks ago I do see a healthy breather or dip coming up to the FOMC meeting in November. Nothing huge – at most down to 6530 but more likely 6650. However I still think we will have the traditional strong finish to the year ending above 6850 even if the debt ceiling fiasco raises its ugly head yet again. We are now currently right between two FOMC meetings so a good time in my opinion to bank the longs at today’s close and possibly take a punt on a dip over the coming 3 weeks.

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