6826, 6807, 6778 Support, 6860, 6895, 6937 Resistance

Good morning. A interesting day yesterday, and still choppy. Couple of the orders got stopped out though the 6847 short worked out ok in the afternoon. The bounce from 6800 had more strength once the 6812 was broken so there is still some bull power, with reinforcements arriving in the later afternoon when the latest poll showed the No vote in the lead. Its going to be like this next week as well. The S&P held that 1985 support area, so we should get back above 2000 soon – which will take the FTSE with it, probably to 6937 initially.

Asia Overnight from Bloomberg
Asian stocks rose, with the benchmark index heading for its first advance in six days, as Chinese shares rallied after weaker-than-expected inflation spurred speculation that the government will add stimulus.

The MSCI Asia Pacific Index (MXAP) added 0.1 percent to 146.92 as of 12:16 p.m. in Hong Kong after sliding less than 0.1 percent. The equity gauge declined 1.6 percent in the past five days as investors weighed the outlook for U.S. monetary policy ahead of the Federal Reserve’s meeting next week. China’s Shanghai Composite Index advanced 0.5 percent, heading for its highest close since March 6.

“We are still waiting for government measures from China as growth remains slow,” said Benjamin Tam, a Hong Kong-based portfolio manager who helps oversee about $1.5 billion at IG Investment Ltd. “People are speculating there could be more stimulus in the near term.”

Hong Kong’s Hang Seng Index added 0.1 percent, while the Hang Seng China Enterprises Index of mainland stocks traded in city was little changed. China’s nation’s consumer price index rose 2 percent last month from a year earlier, according to data released by the National Bureau of Statistics today. Economists surveyed by Bloomberg had expected a 2.2 percent gain. Factory-gate prices extended their decline to 30 months, adding room for government stimulus to support the economy amid a property slump.

Topix Rallies
Japan’s Topix index climbed 0.4 percent, extending a six-year high, as the yen traded near a 2008 low.

“The rally in Japanese equities will continue,” Desmond Chua, a strategist at CMC Markets in Singapore, said by phone. “The yen will continue to weaken as the dollar strengthens amid prospects of an interest-rate hike in the U.S.”

New Zealand’s NZX 50 Index climbed 0.4 percent after the central bank kept its benchmark interest rate unchanged. Singapore’s Straits Times Index added 0.3 percent. South Korea’s Kospi index slipped 0.1 percent as it resumed trading after this week’s holidays. Taiwan’s Taiex index was little changed.

Australia’s S&P/ASX 200 Index dropped 0.3 percent. The nation’s jobless rate fell to 6.1 percent in August from 6.4 percent a month earlier as employers added 121,000 jobs, a report showed.

The MSCI Asia Pacific Index traded at 13.6 times estimated earnings at the last close, compared with 16.7 for the Standard & Poor’s 500 Index and 15.5 for the Stoxx Europe 600 Index.

Fed Policy
Futures on the S&P 500 fell 0.1 percent after the U.S. equity benchmark gauge rebounded 0.4 percent yesterday. The Nasdaq 100 Index advanced 0.8 percent as a rally in Apple Inc. shares lifted technology companies.

“We’re going to get some volatility until you’re through the Fed meeting,” Kirk Hartman, who helps oversee about $331 billion as Los Angeles-based chief investment officer at Wells Capital Management, told Bloomberg TV. “Everything looks good until the Fed starts raising interest rates. Any kind of rapid increase in rates is going to be a shock for the markets but I don’t anticipate that.”

The Fed is gauging the strength of the economy as it winds down a bond-buying program and considers raising rates. Data this week may show that claims for unemployment benefits fell, retail sales improved, and consumer confidence rose, strengthening the case for higher rates next year as the world’s largest economy continues its recovery.

FTSE Outlook

FTSE 100 Prediction
FTSE 100 Prediction

Todays pivot is 6826, and I am expecting support there on an initial dip. Generally I am still expecting a bit of a rise, so that looks a decent enough entry level for today, unless you are still holding the long from yesterday when it hit 6800. Initial resistance is 6860 – a level that we also hit during the night, with 6895 above that, followed by 6937

If the pivot breaks then the next support is 6805, where we have the 25EMA on daily and S1, with the bottom of the Raffs below that, both around 6780 and also S2 here. Generally though I expect it to rise today, especially if the S&P pulls away from the1990 level later on.

88 Comments

  1. Morning
    Been messing around with the settings on the software – really to fit the curve ( probably not a good idea – but got no alternative )
    The software signalled the 6855 Sell preety well to the pip.
    The target for this is 6815 ( so hoping it will take it there )
    There is another target for 6790 ( lets keep that in limbo for now )
    I’ll post as soon as I get the next target or Buy signal

      1. From a technical point of view – I seem to agree with
        your move up as well. But lets see how accurate this
        software is ? as Jim said – Caution !!

  9. Moved my stop on Dax to lock 10 pips profit and stop on Dow to 17005. Not feeling confident on these longs but you never know.

  11. the last link was perfect, it takes you directly to the image. What I am struggling to understand is what was the reason for entry? Crossover of MACD and appearance of red bars on it? Crossing of the trend line you jotted? Or old and mighty Double Top?

    1. Jack 2 – Don’t worry about too many indicators. Just try and master one strategy stick to it and stay disciplined (very very important) to be successful. Its only 10% strategy and 90% discipline I believe.

    1. I see, but yesterday you went long on Dow 16908 and it wasn’t any level there. So I was wondering why did you do it then and now.

  15. My thinking is DAX should hit 9770 and Dow 17060 before reversing. I will wait and watch for PA signals at those levels to short if its gets there.

  17. Senu, that’s exactly what I thought then as I looked at S1 level and your entry was early. I see now, impatience, isn’t it? But if you didn’t enter you wouldn’t win. Sometimes it’s worth risking with smaller stake and add up later if needed.

  18. RentalCollection — The 6855 call was good and 6815 a reasonable target. My growth indicator is negative and weakening further now, so I am looking for a bit more downside — no new call yet.

    1. Didn’t expect FTSE to be miserable today. It looks like Dow is following Nick’s arrows today. Poor longs today. Looks Dow is pumping up.
      I was staying aside today just because of the mixed predictions of FTSE and Dow.

  20. Jim
    The sell at 6855 – Appears to be the only Trade Entry Signal.
    The target 6815 – was hit – & the signal for this target has gone.
    Now The target at 6790 still showing
    However a new target – at 6778 – has also come on.

  21. Jim
    There is a Target signal – which keeps coming on & off at 6798
    Not sure if this is relevant. We’ll see

    1. Zahir my trade got stopped out. From yesterday’s pin bar on the daily, I am thinking 9770 before further falls. Lets see what happens.

  28. Ah what closed my Dow short within a minute before that drop timing…out! Jobless claims up u.s. 13.42pm

  30. Just an update
    The 6790 Target signal turned to a Buy Entry with a target 6812
    The earlier target for the sell at 6778 signal is turned off
    This is the softwares signal.

  31. Didn’t expect FTSE to be miserable today. It looks like Dow is following Nick’s arrows today. Poor longs today. Looks Dow is pumping up.
    I was staying aside today just because of the mixed predictions of FTSE and Dow.

  32. Short Dow 17030 – Stop 17080. I will hold this trade for a next few days if my stop is not hit. Target 200-300 points.

  33. RentalCollection — Thanks, that’s interesting. I got a shallow trough in my indicator around 6785 (FTSE/5 mins.) However, coming out of a dip like today’s, I like to see index > LinReg 20, LinReg 20 > LinReg 100 and LinReg 100 at least heading for a positive slope. So I didn’t see a buy signal there.

  34. Latest Update on software
    Nothing new. Long signal still present
    with target still the same

    But for me – I really can’t see this working.
    The market is so negative and I just cannot see this
    market going higher – not even to 6800 never mind
    6812

    Crazy. Probably will have to tweek some more!!
    But will wait for now and see.

    2. Jim
      I have probably made it too sensitive ! with the settings.
      It was going to be trial & see. But the signals in morning
      has been very good. So will probably run another back-testing
      with slightly larger settings. Lets see. But I am beginning
      to see some hope in this.
      My Analysis was bullish at 8 am. So that was preety rubbish
      so at worst – the software halted me buying

  37. Second short on Dow got stopped out before the drop!wider stops wider stops!!is going to be my mantra.

    1. Hi youhooi, looks like you are tensed. holding any long positions in FTSE? everyone loose money here. don’t think about past. sleep well. we will win tomorrow. GL

  51. Hi senu, what is your email? Now I got short ftse buy at 6615 level loss£450
    I got 4x long ftse at 6889 loss £600
    And long 1x fx gbp/usd at 1.68 loss $600
    What you think of ftse? Will it hit 6950? Should I cut my ftse short?

      1. Hi Sam,

        I need to sell my 4 X long ftse and keep my Short ftse that i buy @ 6615.
        Any idea for the FX GBP/USD long or short?

  55. Morning
    Been meddling with the settings of the software.
    Not sure how it will perform
    Looks like a Buy market.
    Buy at 6800 & 6790 Both were triggered yesterday evening
    Target is 6853 & 6860
    So does it still stand for today – havenot got a clue,
    but my guess is – Till the sell signal comes – this is the
    current trade

      1. Sam
        Forget the capital he has. He has been correct
        practically every day on his trades – so you got
        to respect – what he says. & he has posted that
        he has sold at 6800 with a 100 pip move coming.
        That is exactly contrary to the software signal – so
        I am taking this signal with a pinch of salt

    2. Those levels are between S1 and S2. Not sure if those levels will be hit – if hit more shorters will come on board 🙂

      1. Sam
        Personally – I really dont know which way this market will go.
        Cant see any Long reasons – nor Short also. It just seems in no mans land.

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