6806 initial resistance, 6770 support, then 6750

Good morning. Another tricky day while the FTSE flirts with the 6800 area and just chops around that area. We had the initial long which managed to get a few points but the bulls never really got going and it remained weak pretty much all afternoon. In stark contrast to the Dax which took off like a rocket from 9620 to 9690 in the space of 40 minutes. The FTSE has hit the overnight low at 6770 and actually performed a bit of a bounce, being 6795 as I write this. The bulls need to get above 6815 to have any mediocum of safety. New home sales yesterday in the US exceeded expectations which kept the S&P strong. We have a fair bit of Euro news out today, as well as Yellen testifying on monetary policy at 15:00.

Another sign of a market top is over the top IPO’s and AO.com’s yesterday fitted the mould. Just like cities building skyscrapers show over the top boom times, increased M&A activity and a rush of IPO’s often shows market tops. Somethign to bear in mind while the FTSE is still testing the bottom of the daily channels – it will need to bounce today.

Asia Overnight from Bloomberg

Commodities fell, with copper heading for a seventh day of losses, amid speculation the Federal Reserve will continue stimulus cuts. Australia’s dollar weakened with emerging-market currencies and precious metals.

The S&P GSCI Index of 24 commodities fell 0.2 percent by 3:14 p.m. in Tokyo, with copper slipping 0.2 percent and silver declining 0.6 percent. The Aussie weakened 0.3 percent versus the dollar after private investment fell the most since 2009. Turkey’s lira led a gauge of developing-economy currencies toward a second day of losses. Gains by Hong Kong shares helped the MSCI Asia Pacific Index pare today’s decline to 0.1 percent. Standard & Poor’s 500 Index futures rose 0.2 percent.

Fed Chair Janet Yellen testifies before the Senate today as the U.S. issues data on jobless claims and durable goods orders. China’s central bank drained cash in money-market operations today for the fourth time in two weeks after the benchmark rate for interbank loans dropped to a seven-month low. Australian (GACGB10) government bond yields declined after data showed business investment shrank more than economists estimated in the quarter through December.

“The markets are just churning around,” said Shane Oliver, the Sydney-based head of investment strategy at AMP Capital Investors Ltd. in Sydney, which oversees $131 billion. “The global economy is on track to pick-up pace this year but we’re just going through one of those thin patches in markets at the moment. There’s ongoing concern about China and there’s a bit of nervousness around.”

US

Yellen said this month the economy can weather cuts to the Fed’s bond buying program, adding that only a notable change to the economic outlook would prompt the central bank to slow the pace of tapering. More than $2.1 trillion has been added to the value of stocks worldwide this month on speculation the global economy is strong enough to withstand U.S. stimulus cuts.

Federal Reserve Bank of Cleveland President Sandra Pianalto said that cuts to stimulus can continue if the economy and employment market keep improving.

The S&P 500 (SPX) ended the U.S. session little changed at 1,845.16. The gauge has climbed above its closing record of 1,848.38 every day this week, only to retreat from that level by the end of the day. The index also came within six points of the record each day last week.

FTSE Outlook

FTSE 100 Prediction
FTSE 100 Prediction

Today is key for the bulls, simply. We are at the bottom of the various daily channels on both Bianca and Raff, and as such this a fairly key support are. The bulls need to get the price above 6818 initially, but from their point of view, above 6829 would be better if they are going to push on to higher levels.

Support wise today we have a ProTrend channel with support at the overnight low around 6771, and after that its 6752.

If the bulls can get above the daily pivot at 6806, which is likely to act as initial resistance, then 6829 is likely. With the daily channels around the 6780/6800 level on all of them (Bianca and Raff) then there is a chance of a bounce though the market (particularly the FTSE) does feel like its just treading water at the moment – tricky trading indeed.

155 Comments

  2. Current Pina Colada’s

    -Upswing
    DAX 618
    S&P 841
    FTSE 783
    DOW 160

    Target those above, a break above will be continuation
    Failure will be sustained downside..

    2. James – so how do you play this – assuming your targets. Do you wait till targets have been reached? or do you go short now?

      1. Depends on how you feel..
        If i wana Gamble I’ll play up to,
        If I want to trade, I wait till the target then sell, if broken Close and buy, this is today only

      1. According to Nicks Chart – Support is at 6752 – so giving 20+/- Allowance – it looks like the bottom has been set – so a one way bet – as far as I can see

  11. It reminds me one of those days when I lost lots of money looking for longs by Nick’s arrows. I don’t say he is wrong, I just have that feeling that’s all. I remember one day like this – the charts looked the same.

      1. The market is very unpredictable, to trade now would be taking a big gamble. The ftse has broken big supports and i think it can possibly fall further to 6720

    1. Did you see anything? for you to get out I am still long and will be adding if it goes further down. I feel its very oversold and must retrace up – atleast to 800

  16. Heavy Short since 6806 :), closed all at 6740!
    Loooking for pullback to re-short (expecting more drops tomorrow)

      1. pockets seen heavier days 😛
        But this week has been terrible, ive only made back 80% of my loss on this trade…
        I think i kinda lost control on my losing trade (during choppy period), used too much risk!
        2nd time this has happened in a year (not good at all)

          1. i opened my position with max risk, meaning a tiny move and id have to close it out..and it was choppy and thats what happened.
            Usually nearly all my winning trades.. i start small position n build it ONLY if it goes in my direction.
            That way if my trade is small and goes against me my losses are minimal, and if it goes in my way my profits are abnormally larger than my losses

      1. Im long on the FTSE but two days in a row I’ve barely broke even so I think I should post my tips and you should all do the opposite

          1. Using Nicks charts and days news my biggest issue is I tend to move my stops up to secure profit but this often stops early before the full rise its happened a lot recently.

          2. I’m a member for this month only really as a trial I wont trade for long in overall loss, this isn’t a reflection on Nick but a reflection on me. Nicks charts have worked well most of the time my problem is I get greedy and add in my own trades which often fail and make losses human nature of greed I guess.

    1. I am still long 740 – I still feel that Nicks targets are reachable – so will bank at 800 or nearabouts

      1. we have the us jobless claims report out at 1.30pm, im sure the us is gona go through the roof, pushing ftse up by 50 points at least.

      2. You could move stops up so 6790-6795 and see if it goes above when we get there its a risk of 5-10 points then keep shifting up. I think 800 will be a tough one to break this time around if it gets to 790 I’m in good profits today.

    2. just waited for a second wave in this weak channel.
      I could carry on waving up who knows.
      But I remember how it snapped out 2 days ago, don’t want my profits again, plus one of my positions were still in minus at the time of closure.

      1. sorry, didn’t want to lose profits again.
        Tbh, if I was at 6740 I would hold as this pull back or whatever it is may carry on waving up.

    1. i think when the us market opens fftse will be pushed up to 6800. im long on the us30. long from 16117. im hoping it will reach 16200 by 4.00 pm

  23. Right, basically it should be another leg down when US open, and will they buy or not, not sure. This long seems to be weak and I am not going to enter this. That’s mho for today.

  24. Long is still he way to IMO until we finish the day with a heavy loss, think weight we get above 6780 at close.
    That 6750 area was begging to get hit last two days.

  26. No – one has mentioned Ukraine. A dire situation is emerging which involves Russia and US. Support bas broken so everyone should be short anyway but Im saying keep them open with trailing stops…this could be a huge move down.

    1. Yes this could be the event which could move the market by 10 – 20%.
      Endless risk – war – gas supply closed – violence spreading to caucasas – instability in kazakthan affecting commodity supply – oligarchs jocking for power – instability to poland – turkey that could affect the EEC & growth prospects – I could go on & on

      I have moved my stop to my open at Long 740

  27. … “Russia jet report spooks markets” ! My arse, oh and a convoy of trabants spotted in the Crimea, markets set to dive 🙂

    1. Putin is highly unstable – his legacy is impt to him – so losing Ukraine – considered Little Russia – is difficult for him to accept – so anything can happen – on CNN

      1. Putin doesn’t want to lose Black Sea access, it’s a constant issue with Russia. They have to have access to the water in the north and south. This is a historical issue, it’s been for centuries.

    2. The next step is people either say, ‘If Yanukovych can be [ousted], then maybe Putin can be as well,’ or, ‘If Ukraine can split away from the Russian orbit, maybe we can, too’
      —Jeff Sahadeo, director of the Institute of European, Russian and Eurasian Studies at Carleton Universit

  28. @PMS, great bull, would appreciate if you can share your thoughts on US. S&P failed to close above 1850 last 3 days. Will you short here?

    1. A little pullback does not hurt anyone. This thing with Ukraine is what’s upsetting me, but not enough yet for the longer term. I still think we are going to 16700-17600 in DOW in next month

  29. The event which is spooking the market is John Kerry ‘ s speech yesterday. The US has warned Russia it would be a ‘grave mistake’ to get involved in Ukraine. Traders know what that means.

  31. Billion-dollar investor Warren Buffett is rumored to be preparing for a crash as well. The “Warren Buffett Indicator,” also known as the “Total-Market-Cap to GDP Ratio,” is breaching sell-alert status and a collapse may happen at any moment.

    on the wire

    1. What ? 😀 ahahahahaha
      That’s what I think it is…. a bear trap. Bearish sentiment in full throttle

    1. Yea that’s my thinking I’m in good profit today now so if it rises I wont let it bother me. I can see it dropping back on US opening at a guess if it stays high ish until then.

        1. That’s my thinking I was tempted to see if it drops to 6750-6765 then back on up to 6790-800 lets see how it plays out.

    1. Yes I closed my short out too – still made 50 points on it. I am still bearish overall now but no point giving up profit when it bounces back. Looking to short again on any sign of weakness but as you say no point taking the risk with Yellen speaking for an hour or to.

  45. looking at my indicator..which i shudnt…its looking more like a rebound to me…
    hence my main reason for closing short (I also caught 66 points on short so 56 point profit today)

  46. It looks like its buy the dips – looking at the sentiment indicator
    still holding my ftse long from 740 – hope it works out – yellan
    speaking but she is very mild in nature – so good for longs !!
    well thats my theory anyway

    1. I was worried about a huge smack down didn’t happen this will go to low 800’s Im done for the day now good luck.

        1. Are you still holding? Just sold my dow 🙂 not sure the FTSE will beat that 6810 wall amazing really since it was 6734 ish this morning

          1. Yellen is not disturbing the apple cart – so when she finishes – This market is going to fly – so yes Im still holding – want to try & make it a grand-day

  57. With Durable Orders awesome data today, expecting tomorrow better GDP, at least than expected

  58. BoE’s Miles says the BoE QE exit may have limited market impact, says the neutral BoE rate may be less than 3% for an extended period.

  59. someone talk about a shooting star in FTSE today. I just saw the chart … amazing hammer

  61. Nice 30 pips… Put a real small Long is at 6790 but will stay nimble in case it drops further. Looking for SPX to hit 1845 before going to new highs so that may drag FTSE towards 6770 region

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