6780 support today, 6860 then 6900 resistance

Good morning, well that made a change (and a pleasant one) for a Friday to turn out so well with the drop from 6860 (which was Januarys high in case you wondered where that level came from). Most of the news over the weekend was about the ongoing Ukraine situation which is still pretty fluid and could cause a bit of tension still between Russia and the US. We also had the G20 meeting ongoing in Sydney, were a further $2trillion has been pledged to underpin global economies – long live QE! Finance ministers and central bankers said they would take concrete action to increase investment, boost employment and promote competition in a joint communiqué following a two-day G20 meeting in Sydney. The group accounts for around 85pc of the global economy. “We will develop ambitious but realistic policies with the aim to lift our collective GDP by more than 2pc above the trajectory implied by current policies over the coming five years,” the statement said. “This is over $2tn more in real terms and will lead to significant additional jobs.” From here

Asia Overnight from Bloomberg

Bianca Trends
Bianca Trends

Asian shares dropped, metals fell and the yen climbed after a Chinese state-owned newspaper said some banks curbed loans to developers. Natural gas climbed to its highest price in five years as forecasts for frigid weather in the U.S. bolster the energy-demand outlook.

Gauges of Chinese shares in the mainland and Hong Kong tumbled more than 2.1 percent at 2:44 p.m. in Tokyo and the yuan extended its biggest weekly drop in two years. The MSCI Asia Pacific Index fell 0.6 percent and Standard & Poor’s 500 Index (SPX) futures slipped 0.1 percent. Copper retreated the most in a month, silver decreased 0.6 percent and the yen strengthened against all major peers. Gas futures rose to $6.35 per million British thermal units, set for the highest close since 2008, ahead of a forecast arctic blast this week.

“Tighter lending policies in China will obviously be extrapolated as a negative in the short-term,” said George Boubouras, who helps oversee A$32 billion ($28.7 billion) as chief investment officer at Equity Trustees Ltd. in Melbourne. “If the authorities are trying to make sure that there’s better quality credit growth in the next cycle, that’s ultimately better for global growth.”

More than two stocks fell for each that advanced on the MSCI Asia Pacific Index. The measure is down 3.4 percent this year amid concern that slower growth and a crackdown on risky lending practices in China will dent the earnings outlook for the region’s companies.

“Property prices are at a high level now and the industry may enter a correction period,” said Wei Wei, an analyst at West China Securities Co. in Shanghai. “Given the fact that the property industry is a pillar of China’s economy, growth will lose steam once the industry suffers. That’s also bad for global growth.”

Natural gas rose as much as 5.6 percent. Hedge funds increased bullish bets on the heating fuel as inventories dropped to the lowest in a decade. West Texas Intermediate crude gained from the lowest price in a week, advancing as much as 0.5 percent in New York. Brent gained in London.

“After a mild and pleasant weekend for many, winter will make a harsh return to much of the central and eastern U.S.,” the National Weather Service said in a report yesterday. The agency warned of possible record cold temperatures this week in the High Plains, Upper Midwest and Great Lakes areas.

FTSE Outlook

FTSE 100 Prediction
FTSE 100 Prediction

After Fridays dip we are nearing the bottom of the 30 minute channel and also the 10 day Bianca at 6805. Should it overshoot then 6783 is a good place for a long I feel, being the bottom of that channel on the 30min. We also have the 20ema there which often acts as support. As such the main trade today is a long from this area. On the upside, Fridays high is the resistance level that the bulls will need to break and if they do so then 6883 and 6900 (top of the 30min channel mentioned above) as well as 6904 being the top of the 10 day channel likely resistance. Out of the 3 indices analysed above, the FTSE is the one that still looks strongest in terms of the daily channels as the 10 day is still heading up quite steeply. Recently the 10 day Raff channel has been working well, and I would hope that remains the case today if prices dip to the 6780 area.

I have put an initial dip in down to that support area, mainly as a continuation of Fridays slide, fairly weak overnight and the 30 minute EMAs being bearish still. I do expect the bulls to retest at 6860 level again and think we could well see 6900 early this week. I am not getting out and out bullish yet unless the FTSE closes above 6940 as we have the top of the Bianca channels getting closer around 6904/6923.

51 Comments

  3. I hope you are both wrong, got the drop and went long at 6800 with a plan to short at 6834.

    As long as it hits 34 I’m happy to see your drop then.

  4. I just look at Dow and want it to drop to 16085 or something before going long.
    But it may not work out.

  10. A lot of divergence at the moment…US stick up on low volume…also maing risk measure USDJPY not moving up that much. In real risk on environment i would expect USDJPY to be moving up a lot more

    1. low volume is good. Pray to stay like that… when you see high volume, something is about to change

  14. Long closed for good profit. Can see it keeping in motoring but will wait to see if we have a small pull back

  15. Anyone looking at Shorting 6883 or 6900? Im favouring the latter as its all looking a bit of a raging Bull atm. Key levls broken in SPX.

  16. Ftse had the shackles on until dow opened and took them right off! Tomorrow shud be interesting good day overall today-also started trading dax today dow still a bit to much for me…hoping for a dip to around 833 tomorrow to add more longs but we’ll see gl guys

  17. Javed, you must be having a great February… you said to buy from 6460 for the medium term. I wish I just held my long from 6500!

  18. Thanks White……it’s been a decent month……but the markets can change so quickly. So just need to remain level headed and maintain your trading discipline.

  20. lovely day 🙂
    cut long by 50% looking to build up on a bounce from (6850 if we reach that)
    been heavy long (avg 6810)

  22. Ftse up 7 sessions on the trot into overbought territory. Looked like a spike up on all indices, maybe another early doors tomorrow or we may be straight onto a fall

  26. Hashmash 1850 has been key resistance did close above that no… Until we get a close above that then sorry it did not hold key resistance

  27. Jumped back into my long too soon. A lot of yesterday’s profit is disappearing! Watch it spike back after 8.30

  28. I closed all my long s at 6830…that break of pivot not good. Bloody falling on chinese! A 50% profit loss :(..
    Sad it happened after account hitting all time high loool..glory didnt last too long!
    But im still bullish may build a long at 6820..
    Dnt see why ftse wont be going up again

  36. That’s it, got 155 quid out of it and stuff them with their Dow.
    I was winning perfectly well at 231: 168 quid maximum it was and it all disappeared in a matter of 2-3 minutes.
    Well, I added a bit and closed now at somewhere at 185. I just had enough of them. I don’t see a great long signal at the moment, just playing games with me.
    Well, got what I had anyway and adios for another day +55 points of usual stake, just had 3 of them. I know I know, I was perfectly calm and everything, I was testing the bounce of 153 as 61.8% but my patience limit disappeared.
    Entered 16175 at 11.10 and stared all day on screen counting bl…dy profit.
    Unfair.
    But got my losses for yesterday instead.
    Wanted 16300 today.

    1. It will probably rally now to that 16300 now, but I don’t care. Price on Dow is so liquid, yesterday I expected this drop it didn’t happen. Today I entered my trade earlier hoping for the same case scenario, and it didn’t happened.
      A bit annoyed.

      1. Cos I would have entered on that 16153 and still held, I wanted to close my top bet at 16175 when it reached there to keep the ones below run but couldn’t be bothered.

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