6800, 6755 support, 6845 resistance

Good morning. That dip got slightly overdone yesterday dropping off the 10 day Bianca at 6835 in the end. It bounced back to the 6818 I SMS’d at about 8:50pm, and has since dropped back again. Its certainly choppy and messy! Dax had a mare yesterday morning first thing – dropping 100 in about 10 minutes. Headlines still in the papers about mortgages and attempts to cool the housing bubble. I expect we are going to see 6700 before we see 6900 in the next few sessions, but the main levels I’m watching today at 6750 and 6845.

Asia Overnight from Bloomberg
Asia’s benchmark stock index swung between gains and losses as utilities advanced and regional energy explorers fell after Iraqi army victories damped concern the nation’s oil supplies will be disrupted.

The MSCI Asia Pacific Index (MXAP) gained 0.2 percent to 144.97 as of 12:45 p.m. in Tokyo, after falling as much as 0.3 percent. The gauge fell the past two trading days after reaching a six-year high on June 19.

“It was about time the market got a correction,” said Masaru Hamasaki, a senior strategist at Tokyo-based Sumitomo Mitsui Asset Management Co., which oversees about 13.4 trillion yen ($132 billion). “If the conflict stays within Iraq, I don’t think that will push up oil prices a lot.”

Brent for August settlement dropped as much as 50 cents to $113.62 a barrel on the London-based ICE Futures Europe exchange and was at $113.88 at 1:20 p.m. Sydney time.

Regional Gauges
South Korea’s Kospi index added 1 percent. Australia’s S&P/ASX 200 Index fell 0.4 percent, while New Zealand’s NZX 50 Index lost 0.2 percent. Taiwan’s Taiex index gained 0.3 percent.Singapore’s Straits Times Index added 0.1 percent.

Japan’s Topix index fluctuated. Hong Kong’s Hang Seng Index rose 0.3 percent after slumping the most in three months yesterday. The Hang Seng China Enterprises Index gained 0.4 percent, while the Shanghai Composite Index added 0.4 percent. India’s S&P BSE Sensex rose 0.3 percent.

Futures on the Standard & Poor’s 500 Index lost 0.2 percent today. The U.S. equity gauge slid less than 0.1 percent yesterday as General Electric Co. led industrial shares lower, to offset gains among energy producers.

Data yesterday showed U.S. sales of existing homes climbed 4.9 percent to a 4.89 million annualized rate last month, the most since October. A separate report from Markit Economics showed a measure of U.S. manufacturing growth rose to 57.5 in June from 56.4 in May.

China Outlook
“We are going to have a neutral move today because the U.S. market was effectively flat,” said Shane Oliver, Sydney-based head of investment strategy at AMP Capital Investors Ltd., which has $131 billion under management. “Things in China are starting to look brighter, underlining support for share markets.”

A preliminary China manufacturing Purchasing Managers’ Index from HSBC Holdings Plc and Markit Economics rose to 50.8 for June yesterday, exceeding the 49.7 median estimate of analysts surveyed by Bloomberg News. A number above 50 indicates expansion.

FTSE Outlook

FTSE 100 Prediction
FTSE 100 Prediction

Todays pivot is 6805 so we may get some initial support there first thing as we are testing that as I write this. Yesterdays low was 6785 and any movement below that is likely to reach 6753 where we have the bottom of the 10 day Raff channel. As such a long at 6755 could do well for a bounce.

On the flip side, if the 6800/6805 level holds (at least initially anyway) then the bulls will need to break that 6818 level i mentioned on the SMS. If so then a rise to the top of the Bianca 10 and 20 day at 6845 looks likely, especially if the bulls break 6835. Higher resistance is 6890 where we have the top of the 10 day Raff. We are also at the bottom of the rising 30 minute channel lending support at 6800ish.

So, 2 key levels to look for today – 6750 and 6845. Initially I think a climb off the pivot to set up a decent short later on.

148 Comments

  1. Hi Dimp

    I am by know means in the same league as Nick, I am still learning everyday. I find the hardest challenge is not predicting the move but learning to control my emotions and stick to my rules. there are some very experienced traders on here like Jim and Pms and even more if you sign up to Nicks monthly members section.
    All I can tell you is I try not to crowd my judgment with to many technical instruments and listening to everyone’s opinions I find 1minutechart works for fine tuning entry 30 min and 1 hour chart give me a good indication where market is heading short term and longer term 4 hr chart and daily. I do use chart patterns and calculate and use pivot, support /resistance levels when executing my daily trades. My worst mistake has always been over trading and find 1 to 2 trades maximum daily works any more and I just loose anything I have won in those first 2 trades.
    I did allot of research into books to read and below I have listed the best books I think. I have split them into 2 groups as easy reading is real life story’s rather than technical. Hope this helps. Good luck

    Technical

    Technical analysis explained by Pring
    The Financial spread betting handbook by Malcolm Pryor
    The Naked Traders guide to Spread betting by Robbie Burns
    Hot Commodities by Jim Rodgers
    Technical analysis of financial markets by Murphy
    Japanese candlestick charting techniques (second edition) by Steve Nison
    Investors guide to Charting (2nd Edition) by Alistair Blair

    Easy Reading

    How I made $2 million in the stock market by Nicolas Darvas ( Very Gripping )
    Bets and The City by Sally
    A Gift to my children by Jim Rodgers

    1. Hi Marco,
      Thanks a lot for your detailed reply. Yes will definitely look into these books you have mentioned.
      Keep posting your trades.
      Cheers. GL.

  4. Dimp
    I aim to take my profit and run rather than stay in the market over night or weekends. Yes I do think that we are heading there but I will probably take my profit in about twenty minutes as I find the market changes direction between 10-11 and I have been waiting to get some profit for a few days now. My motto is “a bird in thd hand is worth 2 in the bush” don’t get greedy.
    Good luck

    1. Thanks. Even I closed my short at 6780. Looks like it wants to go lower as making lower highs on daily.

  13. Morning – Seems ages ago that we saw 6770/80 !!
    Long or Short – Do want to go Short here – so must be a Long …maybe on seeing 6785 +

  17. Belly going to chill today waited 3 days for that drop will hang fire might c what happens around 3.10pm c if there’s a short on.
    Senu you out fir the day

  21. Looking at 3 months. Top of channel on the sp500, triple top on the FTSE, Dow looks like double top just made, all signs for a hefty drop if it pans out

  22. I have a small short in play right now from 84. Very tight stop though so it may prove futile

    1. What a surprise !! No country wants to be the first to increase…they’ll hold off for as long as possible.

  28. Nick, if it bounces from 6750, what is the level for resistance. I do not see more than 25-30 points bounce. RSI and MACD turning bearish today, if we close at this levels.

  32. Like clockwork… buying time :D…. sometimes I’m like that guy saying, markets are rigged.

  34. On a 4H chart it’s bearish engulfing and closed below 6800. So just a possible retest and then down from there.

  37. Still short however I’m considering going long here. Not sure if it will hit pivot or not

  40. Trying to be purely dispassionate about FTSE-4 hrs. 😀 Short-term trend since beginning of May virtually horizontal. LinReg 20 moved above LinReg 100 on 18 June but is now falling back. Index is just crossing below LinReg 100. My growth indicator peaked 19 June, is negative since yesterday and is pointing down. MACD signal peaked yesterday, 23 June. MACD line is now just a whisker below zero. All symptomatic of a developing downswing, which could break below the current bottom rung of the ϵ-channel ≈ 6760 — say, 80/20 in favour of that.

    FTSE-4 hrs:
    http://i1348.photobucket.com/albums/p736/jmca01/FTSE100DFB_zps93a6feb0.png

      1. Hi PMS — 6670 seems reasonable as a next stage if we get the breakout; that’s on the lower boundary of my current channel in the daily timeframe.

  41. I’m fat …
    No …sorry – I mean’t flat at 6794.
    Can’t see anything up or down …wait to see what the US open does

  44. Chatter about levels …..it really does depend on how it arrives there.
    E.g – If it broke 6760 in the next half hour that would call for one particular action…but if it trickles through 6760 over the next few days that may require another…
    I guess the real line in the sand is (“a close” below) 6760 – failure of this level thereabouts would imply that the last move from 6735 (17th June) up to 6842 (20th June) has been a cursory reaction to the move earlier from 6879 to 6735

      1. Hi Jack –
        These are “nothing” prices – Trade at the edges e.g – Long 6777 / Short 6797.
        Just my view !

      2. 50.
        (Senu – I’ve already mentioned I don’t trade the Dow – just put it up for those that might be interested ). I use the same signals on the FTSE but I like to just watch the ticker to see how I feel about them .
        They’re reasonable calls or if they’re – you’ll find you’ve got bull/bear flags developing.

  55. Shorting dow at these levels is suicide.
    17000 is a magnetic price.
    Or maybe I cannot see any level to short DOW

      1. C&H pattern, often does not do a perfect handle. Instead it just breaks the top after a consolidation.
        But I had an order at 16860, which I moved to 16745 and another one to add at 16710

    2. I do have buy orders at 16700-16745 level, before it reaches 17000. If 17000 is reached first, than I will delete those orders

  59. Andas I said some months ago very cautious with longs after the FED ends QE in October. Until then all pullbacks are buy opportunities.

  65. Thought about it too long at 6802 and then it was gone, hope if cones back for mr to get on

    1. what happens when you go short in divi day ? They will subtract money from your account. And in which day, they will add money ? All days there are an interest they charge, and for longs you have divi, but for shorts what do you have ?

  70. Jack 2…i am one of your kind! Never get good entry n when i do get a good entry i never could take maximum profit!

    1. Isaac – I don’t know what platform your using but you could try “trading off the chart”. E.G you put your order levels in Long/Short and take it from there.
      Sometimes you can enter a trade several points away from the sweet spot just because the price has been and gone.
      Only when you look back you might think – “Wish I’d gone short just here”….
      Unless you had an order at that level it’s unlikely you’d have got the order.
      The other thing to remember is that if your “Orders” aren’t filled you don’t trade – that’s a bummer – but at the same time at least if you’ve got a good entry point it gives you a better chance.

  73. It does drop down but I don’t know how serious it is. Was out of computer could not witness the ordeal. At least it is -20 points or so now. let’s see.

      1. I closed my money just now, double stake run without me knowing it and I could only check now at 19.07 and closed for +64 points of my usual stake but in reality it was 32.5 points (16913.5 – 16881.5). Just big luck I suppose, really happy. I am up for the week for 44 points of my usual stake (recovered all losses for this week).
        I’m Going to celebrate. It’s not over yet.

    1. Thank you for telling my the short signal before. It made me some courage to hold on. You must be having a good indicator.

  77. FTSE –
    Wonder if 6777 could be a Long Trade.
    Dow broken lower levels 6887.
    But they present reasonable entries

  80. Looking for 6760 then I will close, no will not leave over night as out of my control want to take these points to bed with me.
    Hugh good advise regarding orders

  83. marco
    do you not see this going down further? will it not be worth holding it overnight?

  84. Outright Treasury Coupon Purchases will run at $2.25-2.75 bn. tomorrow. So what? 😀

  85. Dimp
    IMHO I c this going to 6700, but who is to say that over night it does not grind back up to 6895. On Monday I left my position open over night and it opened 20 points higher at my entry position. So I could have closed as I normally do in trading hours and entered a new short with 20 points in my pocket.
    Thing is yes I will close tonight it generally rally into close anyway if it has dropped before hand. I might wake up tomorrow and it is lower , same or higher least I have my points and it all starts over again.

  87. Wow… DOW has taken a high dive straight down to the deep end!

    Is this a correction or to do with Iraq? But good if you are holding shorts or in a short!

    Been reading this forum for a while now but I mainly contribute on Nick’s live trading forum with other fellow traders. It’s great to see everyone sharing their trade ideas & thoughts on here too!

    Ken 🙂

  89. Back now – My “calls” have all been a bit pants but you never know….
    (Looking at FTSE 5 min chart ) All the retracements been weak <= 50% then breaking the previous = downtrend.
    Wonder if 6768 will hold (S2 6761)
    DOW (5 Min Chart) – Bit of a divergence thing going on with the RSI

    1. I don’t think I’d call it a …..”massive sell off”….
      Probably just letting off a bit steam after what has been a pretty tedious 7 days or thereabouts.

  93. Just editing my buy order. It was set for 6755 but that just narrowly missed being taken and if still looks like if has room to drop further. Changed if to 6747

  94. Tedious couple of months…..and really year to a degree as we are back where started on 31st December. However there was enough volatility upto April to make good money. Since then the FTSE has been very tightly range bound. Finally it seems to be breaking to the downside and my initial target of 6600 by the end of July seems to be back in the realms of posibility.

  98. Dimp normally 20 points but with bottom at 6731 I have my stop at 6724. I will add to my long if we bounce here at 6731.

Comments are closed.