6787 FTSE resistance today, but still cautiously bullish

Good morning. What a great trade that was yesterday – it was nice to be on a trending day that just ran and ran and have got on right at the start with the dip to that 6696 level. The good news is that the bulls are still going at the moment and it looks like we will see the 6800/6850 area. Maybe even 6950 soon for the weekly short signal. We have now formed a pretty solid base at the 6694 area, so any break of that in the near term will lead lower, probably 6600ish. JPMorgan’s results were out yesterday, today its Bank of America. JPM’s were mixed – flat revenue affected by fines, but EPS on target pretty much. That might set the tone for all the results.

With the world bank raising global growth forecasts and everyone still seemingly extolling the virtues of being long and that there is still loads left in equities, it might be time to start being just a little cautious. It always looks a bit suspect when everything you read is saying buy/go long – its almost as if they are just sucking the last sideline remaining people….. we are just nudging the top of the 10 day Bianca channel at 6787 as I write this, having dipped off the 6770 yesterday (but since climbed back).

Asia Overnight from Bloomberg

Asian stocks rose, rebounding from the benchmark index’s biggest drop since September, and the dollar appreciated on optimism the global economy is strengthening. Silver led declines by precious metals.

The World Bank raised its global growth forecasts as a recovery in advanced economies tempers the impact of tighter monetary conditions for developing markets. Federal Reserve officials Charles Evans and Dennis Lockhart will speak today in the U.S, where the central bank’s Beige Book business survey is due after yesterday’s retail-sales report beat estimates. China’s broadest measure of new credit fell in December while money-supply growth and new yuan loans trailed estimates.

“We expect stronger global GDP growth,” Stephen Corry, Hong Kong-based chief investment strategist at LGT Group, a private banking and asset-management firm that oversees about $115 billion, said by phone. “The outlook for equities is pretty rosy and profits still have the potential to go higher.”

World Economy

The Washington-based World Bank sees the world economy expanding 3.2 percent this year, compared with a June projection of 3 percent and up from 2.4 percent in 2013. The forecast for the richest nations was raised to 2.2 percent from 2 percent, while the expectation for developing markets was cut to 5.3 percent from 5.6 percent.

USA

Evans, president of the Chicago Fed, is scheduled to speak on the U.S. economy today, while Fed Bank of Atlanta President Lockhart — who said Jan. 13 that weak payrolls growth shouldn’t deter policy makers from further stimulus cuts — addresses the CFA Society in Atlanta. The U.S. Empire State Manufacturing survey is due along with mortgage data and the December producer-price index.

U.S. Stimulus

Fed policy makers said Dec. 18 they will cut monthly bond buying to $75 billion from $85 billion, citing improvements in the labor market. They will continue to trim it by $10 billion at each policy meeting before ending the program in December, according to a Bloomberg poll of 41 economists taken Jan. 10. The FOMC next gathers on Jan. 28-29.

“Even though the Fed will probably continue tapering, it will be largely offset by the fairly robust U.S. economy,” Shane Oliver, the Sydney-based head of investment strategy at AMP Capital Investors Ltd., which oversees $131 billion, said by phone today. “That will see share markets bounce back again today. But the volatility we are going through will continue a little bit longer given that investor confidence is running at a quite high level.”

FTSE Outlook

FTSE 100 Prediction
FTSE 100 Prediction

The ball is in the bulls court for today and there are a quite a few significant resistance levels coming up. all this bullish sentiment is a little worrying however there might be a little bit of a rise left, though starting to be being cautious is probably a good idea. I wouldn’t be surprised to see a bit of a dip on open, maybe to the 6766 area which is the 23% fib area from yesterday low to high, possibly the 50% line at 6752. Yesterday was essentially a trending day so we may get a little bit of consolidation today, as well as the fact that we are nudging the top of the 10 day Bianca channel at 6787. The coral is also at 6770 though so we do have a couple of support there.

If prices can hold above 6772 then the bulls case is stronger and we should see 6800. Assuming that breaks the next significant levels are 6830 and 6860.

Bears will be aiming to break below 6739 which would lead to 6694 (yesterday low) and if it really started to motor down then 6613 isn’t out of the question.

For today, I think a short from this opening level around 6784 is probably worth a go, targeting that 6750 area and possibly lower. I don’t think it will give up yesterday’s gains just like that, though we are nearing some bigger picture resistance at 6800.

160 Comments

  1. Have a small short on ftse @ 6790 and a larger short on the dax @ 9625 am gutted I miss the dax at 9645 this morning but that move up happen so quick. Gl all

  9. Result were out midday Gmt each share paid 29 cents up from 26 cents results were ok but nothing spectacular.

  11. This feels so tense. I feel if we touch 6800 then that barrier is gone and we will propel higher, the longer we don’t touch it I think the more likely we will see 6750 again. I am currently short.

  12. Am still waiting – it doesnt seem in any great hurry to get through 6800 this being the 3rd attempt to today. Still inclined to only go short as I cant see this going much higher. On the positive side this is offering a higher starting point to short from !

  16. wow 6800 is a real b**** a breakout is imminent..but in what direction-im currently long from 6778 so im hoping north 🙂

  21. Really struggling to hold it though. Feels like its just climbed a big mountain and now looking to see if there is anything any higher. So what to do? My inclination is to see if it breaks and wait for any back test, and see if it holds or not – that will be the point at which I shall go short or long but will need to be watched very carefully. Closed my short 20+ points from here so would be happy to short at these levels providing its coming back down!

    1. DAX is on fire but both it and DOW have started trending downward – yet we are pushin on. Is this one last hurrah from the FTSE? Everyone here (?) seems to think this is shorting territory if I am not mistaken

      1. david – Dax is hardly trending down now. It dropped 20 points, but rose 300 in just over a day.

  24. I shall wait for DOW open plus 30mins to see impact on ftse then decide short or long or sidelines. As PMS said yesterday, 6812 – 6820 is what am looking at. Lets see.

  30. for me we are in bull region, but not strong enough for me to pull the trigger..also mentally im a bit scared as ftse is quiet high (need to suppress my emotions here)..
    best would be if theres a pullback (hopefully tomorrow) and then i get a nice entry around 6760ish

  33. im still convinced about shorting just yet..i think ill wait till MA’s start squeezing it maybe itll test 820

  34. Every dip is being bought by the shorts caught on the wrong side at the moment, wonder when this will roll over…

  36. This is crazy. I am still livid about the ‘reasons’ given for the sell off on Monday re valuation concerns. I’ve been battered both ways this week! Got my stop at 6825 but I feel we will be in massive short territory there so seems horrible to cut it there

    1. Yeah same, worst day for me in a while.. still holding a short 🙁 Really need to cut it but guranteed if i did it would then proceed to tank..

      1. I can not believe we are buying this market on a breathable bank result ,,,, it only just breathed in the buyers, and now every one is gone mad i’m sure ?

  39. I am looking to start cutting my positions at 6755-58, I would have an advantage to close some there. Really need to drop their to start with. Otherwise I placed little orders 6830, 6850, 6870 If it gets there and average up then if it pulls back to 6800 I would be able to cut some of the other lower positions. I work for cutting my positions now and on the top trades averaged will have stops.
    Although it sounds complicated I don’t want to give in. At the end of the day it’s worth fighting for if I win the battle.

  41. Me too mark has been my worst day in nearly a month but law of average said I have one sooner than later.

  44. As a trader, you have to control your emotions…

    Seems there are a couple of people here who have yet to learn this..

    1. need to wait till tomorrow and see, i tried short yesterday at 6759.3 but closed B/E…
      Im leaning towards a long but not right now…my indicator showing some bulls but not enough to convince me to put down a decent size.
      So waiting for reports tomorrow and see

    2. you could possibly open a small stake long from 6810ish area i got support at 6814 and 6803(all intraday i guess) still its your call dude- gl

      1. not yet, looking for my indicator come in line, only showing DAX as a strong bull, S&P as an ok bull, dow and ftse slight bulls…
        I wish i knew how to execute in dax 🙁

  48. Thanks Hash, well done on your trades this week. I’m staring at a shitty loss right now but have the classic ‘it must pull back’ in my head!

    1. haha man i was in same position yesterday, caught like 20 points on down move, watched it all evaporate in minutes..had the courage to close on BE, happy i kept the discipline there.
      but honestly ftse in my eyes has no direction still…its tooo volatile to trade it.

  49. Had a great October, bad November, Average December, but bad January so far. I keep on trying to catch the biggest moves in the market, however I keep getting squeezed out of my positions because I am not willing to risk my whole account for one trade.

    I was thinking of a new idea for my strategy. If I was to come up with a working strategy where I consistently made 20points a week. Only 20 points. Then eventually after this strategy works, scale up to say £10 a point, thats £200 a week. Then scale up etc. Maybe I should try this route instead… Its not fun to keep being on the wrong side of the trend, and most of us on here often get caught!

    I have seen some interesting patterns occur before the open which could provide this opportunity for 20 points a week.

    What do people think? Sorry for my outspoken essay lol

    1. For me, the main mistake was giving back the profit. And the thing that helped me was, as long as im making trades and ATLEAST breaking even every month then i can walk around with confidence. And because of this u begin to trade more cautiously and pick out opportunities with care, u basically become stingy.. see the discipline here would be that u dont trade because u are bored, u really have to wait! Like since around 26th december i havent had a signal to trade, i lost my discipline like 2 times because i deviated to my intraday strategy, n there was a reason to why i stopped trading intraday…because i was shit at it!
      So its really about building a strategy on ur mentality and being disciplined..if what u said works for u then dont listen to anyone else 🙂

      1. Thanks man, I appreciate your opinion.

        Yes you are right. It’s also about trying different strategies until you find the one that works for you. I’ve only been trading a year with real money so I am still finding the best strategy for me.

  50. Classic mistake, i made trying to look for an amount per week , problem is the disciplines are never kept in place , therfore the goal posts in your view will always change with usually not good results ,

    all the best tho

    1. Thanks, yes this is the hardest, yet most important factor.. discipline. Have had to learn the hard way with that!

      1. Hi White,

        The key is to have a strategy and stick to it……patience…patience..patience!…..this is tough to stick to. I have a set of rules which I have written down and keep reminding myself….when I break them I lose out!

  58. Dax has been in a amazing up trend for 2 days now, at this rate will be hitting 10000 by end of next week.

  61. Glad to see all the £100pp merchants have gone. £5 to £10pp is more than enough to make a living.

    Anybody know how Ray is doing? He was taking on Twitter big time last time he posted. I hope he survived the short and made a decent profit at $57 area.

    Looks like the 2013 top at 6876 is going to be tested, particularly if 6812 becomes support.

    Stops are your friend (Three years full time now so I know it works).

    Good luck all

  66. oky doky,
    ftse has become a full bull market for me now!
    Lets see if tomorrow remains the same,best outcome would be a small pullback to say 6800 level while my indicator gets stronger, if that happens them im putting a heavy long

      1. well
        Harmonised Index of Consumer Prices (YoY) – High Impact – last = 1.6% and the expected 1.2% .
        Hoping this will create a pullback.

        I don’t want to rush in at all, despite ive been sitting around not trading for a while..
        especially right now wen we heading to all time high

      1. well at least the range is broken which is good! But tomorrow if i do go long, will be a frustrating until enough points are caught such that i can move SL to B/E

  67. The situation has changed dramatically since Monday, when it looked as if the FTSE might tip below 6700 and then downwards. I have been quiet today – buying shares. No thought of a short in my mind. The graph below on the 4 hrs. timeframe shows a positive breakout, and despite the possibility of a near-term pause, building momentum. I see 6950, with a few ups and downs on the way, as a reasonable possibility now.

    http://imagizer.imageshack.us/v2/800x600q90/4/n9xc.png

  68. time for a repeat of that Goldman Sachs little nugget

    … S&P 500 valuation is lofty by almost any measure, both for the aggregate market (15.9x) as well as the median stock (16.8x).

    🙂

  70. Been waiting for a bear run all afternoon but to no avail so sod it I,m back in with the bulls ! fingers crossed !

    1. got my direction wrong on japan nikee and got cleaned out,,,,, but if you could get headed in right direction you could pocket some dosh normaly moves 300 nto 400 points per day

  74. I am resisting the urge to close as every time I do at the market extremes it snaps back the other way!

  75. US not for breaking 16500. My long from 16400 on Monday would be nice now! Hope there is a pullback now to get me out

  76. Looking at the US diary makes me think we will be bullish till at least Tuesday next week. Monday is a public holiday. Then the market will get twitchy ahead of FOMC Meeting
    January 28-29.

  77. listening to radio other day to a discusion where four hundred thousand people had applied to live on mars, applications where taken down to one thousand……..makes one wonder where things are heading………….

  78. Good to see 6800 broken.
    Had a really bad day today, but closed all trades. Still up for the week.
    Looking to go long before 8 tomorrow
    Today was all about discipline. Knew not to trade but still did.

  80. F**** Dax short at 29 looks like I’m being left behind the think does not want to stop it just keeps on motoring
    Fing monster
    First and last time I am touching this bit**

  81. Guys wait for me to get cut out in the next 45 mins and that will be your short indicator! It can’t fail ha ha! No doubt IG will throw the price around out of hours to cut me out!

  82. … Let’s hope this is all smoke and mirrors if your short, the banks were always going to outperform reduced expectations 🙂

      1. … I’m with you let’s go get em 🙂 we can cry together tomorrow .. Fall you b—- rd 🙂

  84. Hubris is spot the bank were going to out perform speculation with all the fed pumping money in the banking system they could not go wrong, am not sure why the markets have rallied and the dax has just amazed me the last 2 days but that the market if we all understood how they work them we all be millionaires.

    1. Now its to decide how/when to enter (the hard part).
      got a large long order in sitting at 6800 now (hoping it will hit at the 7am german consumer price index release

  87. X2wlt
    I knw the feeling you are going through. I am like that. Held on to ftse for last 10 weeks no luck. Closed it yesterday and now it goes up and away. And guess what am in the oppsite direction loosing loads. Same with dow. Held on to big loss accidently closed it on friday and it goes down On monday. Opened long and guess what? It goes down. Closed it and its going up now again. Same pattern always. If am in the trade its always in the wrong direction. Soon as I close it, it goes in the direction I had wanted it. Question is are jinxed or just plain unlucky. I know that there is no such thing in investing but its a regular pattern. What are doing wrong????? Its always the same no matter how well the research is.

  89. Could go up to around 6848ish and the come tumbling down like it did on 30th October & 22nd May (1 day chart will show what i mean).

  90. I could be wrong but i suspect the dow and sp500 are heading for a hyperbolic spike judging by the aceleration on these rallies… Lets say dow 17,300 and sp 2075 for the spike and bull market top! But remember you’ll lose more money trying to short that top …better off pyramiding long into it.
    Crystal ball put away now!

  91. Ps.you know i would say without any doubt there are algo’s out there trawling blogs like this one for market sentiment and trading against it… Some food for thought……?!?

  92. Hey Tom lets go LONG, yeah Dick great idea i’m going LONG big time too, what do you think Harry? Yeah i’m with you all there it’s obviously time to bet the whole bank LONG on this one…

    (there you go guys that’ll fool those algos you’re shorts will be fine now chaps)

    1. Love it :))

      Market is saying buy any pull backs and lump it once it goes past 6824 !

      Must be a DOWN day then :)))))

  93. DOW is still inside a correction zone, so be careful with swing long positions. Needs to break for good that descending trending line.

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