6832 hit, now short… will it, wont it

Good morning. I am now short at 6832, with yesterday’s short order having taken whilst I was having dinner. I have widened the stop to 6855, just above todays 10 day channel top. I am in 2 minds with this short now as the FTSE held up pretty well yesterday and found good support at 6810 in the end. I was hoping for a dip to a little lower as you know to reload a long, which hasn’t played out. The FTSE seemed quite resilient, as the Dow wasn’t full of strength yesterday and actually had a bit of a wobble at the end of its session, dipping below 16400. You could argue that its just the FTSE playing catch up as the US and Dax have been quite strong while the FTSE plodded along.

Bianca Trends
Bianca Trends

Asia Overnight from Bloomberg

The dollar headed for its biggest weekly gain in two months against major peers, while Australian bonds rallied the most since December. Asian stocks fluctuated before China reports economic data next week.

Chinese factory output and investment growth probably slowed in December, data on Jan. 20 may show, adding to signs the world’s second-largest economy is losing momentum. Morgan Stanley and General Electric Co. are among companies reporting earnings today after Citigroup Inc. (C)’s profit trailed estimates. Federal Reserve official Jeffrey Lacker is set to speak in the U.S., where data this week showed jobless claims falling and retail sales beating estimates as the Fed pares stimulus.

“The Fed will continue tapering,” said Andy Ji, a Singapore-based currency strategist at Commonwealth Bank of Australia. “This week we had a bunch of data out of the U.S. showing that the improving trend hasn’t really changed.”

The greenback has surged 2 percent this week against the Australian dollar and rallied 2.2 percent versus South Africa’s rand.

Jobless Claims

Initial claims for U.S. jobless benefits retreated last week to the lowest level since November. Fed policy makers said on Dec. 18 they will cut monthly bond buying to $75 billion from $85 billion, citing an improving labor market. Lacker, who doesn’t vote on monetary policy this year, said on Jan. 10 that he “would expect a similar reduction in pace to be discussed at the upcoming meeting.”

The Federal Open Market Committee will reduce purchases by $10 billion at each meeting to end the program this year, according to the median forecasts of economists in a Bloomberg survey. It next meets Jan. 28-29.

Economic Slowdown

Chinese industrial-production gains slowed to a five-month low of 9.8 percent and gross domestic product grew 7.6 percent from a year earlier in the October-December period, based on the median estimates of analysts before data due Jan. 20. Expansion will moderate to 7.4 percent this year as investment slows and overcapacity is squeezed, according to a survey last month. Home-price data are due tomorrow.

FTSE 100 Prediction
FTSE 100 Prediction

FTSE Outlook

As mentioned above my short order from yesterday’s trade plan has fired, entering at 6832, though I must admit it does feel a little bit suspect! As you know I was planning for a dip and then rise yesterday, but we didn’t really dip, and in actual fact it was quite a boring day with a 20 point range, thus generating no really decent signals. As they say – if in doubt, stay out – so no scalps or anything yesterday.

I think today we will get some resistance at 6848 as 6850 has been a longer term resistance for a while. I am in two minds about this short at 32 now and think it might have been better to wait for slightly higher, but its in now so will see how it goes.  In a way, yesterday’s dip in the Dow at the close and the FTSE not following means it might do today. Also, everything seems to be getting more and more bullish – always a warning sign.

For the bulls, the key level to hold will be that 6810 area that formed good support yesterday, and is the bottom of the 30 minute channel. If that holds then I think we will see the 6848, if not then we might just start to see the tide turn towards the bears.

152 Comments

  2. Nick as I understood you trade with Futures. You leave position orders open after hours with expand spreads for more than 5 points ? This for sure will triggered very easily any position. And how you manage your trades in the futures looking at Cash index ? The prices even following each other, they behave differently.

    1. I use DFB on IG, daily cash basically. Just 1 point spread. If going for a longer term trade I would use a futures, such as Mar 2014 expiry at the moment.

  4. Pms I trade the futures contracts to avoid interest and divi changes. If you close and open every day you would lose 4 points every day. True re spread widens after hours as they do with every index but so long as you do not exercise anything in these hours there is no issue. It also stops me over trading.

    1. NOt the answer I wanted, this I already know. I want the part I ask and no answer at all.

    2. You know that prices will narrow between the underlying and the futures. And price targets for the Cash could easily be hit faster than of the futures and vice versa. The prices do not follow each other all the time. Right ?

      1. Does it always spike up – on expiry or just go volatile? Also once it settles down does it tend to drift back to where it was or are there no hard and fast rules. Needless to say I closed last nights short around 6812 so happy with that. Still sitting on sidelines until I can convince myself this is going somewhere. If anywhere it is up now but what is holding me back as it is starting to feel a bit toppy and am expecting a slide back into the fed meeting

        1. It can be volatile, I remember some really crazy expiry days but less so these days.

          Often you used to be able to enter a couple of daft mimit orders & get filled, not so easy these days…

    1. I didn’t too, missed it, but now I got order triggered 6740, wasn’t that keen to have an extra trade running. My plan was really to reduce at 6800. For God’s sake, it didn’t even retrace 26%. It just doesn’t retrace at all. We just need a little pull back.

  12. I was toying with a long around 6815… didn’t take it.

    Been a difficult week’s trading, I am actually up on FTSE trades, alsthough down on stock trading.

    Flat FTSE here, still looks like it wants to test Oct highs imo.

  13. All the big boys were saying that the market now will be about earnings!! what’s happened to that? Intel crab result , Shell fired profit warning like OMG and the markets??…goes up…lol

  14. Big boys in greed mode have only a mid size sell on sell on dax which is looking bad at the moment, will let that run and leave my day trading for a bit.

      1. Yes I was shorting at 6827 from last night (out of hours trade) then when it went to 6840 I doubled down and then exited both trades at 6828. I currently hold no positions.

        I’m still annoyed from earlier in the week when I was long at 6706 but got stopped out at 6697 but i was my fault for setting my stop too tight…I’ve learned from my mistake

  22. I do not want to hold post market close at 4.30 so I am looking to exit this short if we dip to 6819. Difficulty is as with 6813 this morning that if it does fall back to this level it could be te start of the retreat. You would think money would start to be removed from the table now but the miners have so much further to push. I remember being in RIO about 3 years ago at early 30’s so it hasn’t moves much

  24. RIO frequently is one of the biggest traders on the FTSE by value, £290m value traded yesterday for example, highest on the LSE.

  29. bad/good news – up
    bad/good earnings – up
    tapering – up
    somebody speaks – up
    somebody farts – up
    i go for my dinner – up
    i close my short positions – down 🙂

  31. Mighty DAX 🙂 had a short this morning from 9753 stop at 9763 then another from 9786 and well drop like a stone….

  32. Abc you won’t feel bad in a minute when it shoots up to take me out. Only once I have been cut on my short can te market retreat. My fault it’s been range bound sorry about this guys.

    1. Haha have faith buddy.
      It’s just a frustrating time when the things you have learnt bear no relevance to anything at times like these.
      Even if I wasn’t in a trade, I would be as equally frustrated with what in my opinion is pure manipulation.

  33. got long order 6819 (looking to target US confidence report at 2.55pm)..
    100% sure wont be holding long after markets close today (China GDP expected worse)…worth a short after 🙂

    2. This could be the start of a major move lower… be interesting to see how the US futures move befor eht ecash open. Dax looks weak here.

  37. Right, I reduced my stake by 3rd at 6820. 2/3 is still running. In total it is a loss of £145 pounds which is 48 points of my basic stake. Which is not that important if you take into consideration that I face charges of full stake per day and also currently losing more than that. I was running 3 of this stake so I wasn’t happy at all.
    Well, it did go down a bit (to the pivot) and I thought: I am not winning in this position, I need to face that and I will possibly and apparently will have to face some losses and better to act now so I need to reduce some of the stake to be able to:
    either add up higher by placing orders which I can increase slightly by having less margin and more money available in the account
    If it falls I can hold my original stake and close b/e or whatever happens.
    And I feel better now.

    1. Well done man. I had to do a similar thing in November. Don’t worry about the money, it is a great lesson

      1. What happened in November? If you don’t mind asking. Did you close all position or some of it and waited for it to go down (or up I don’t know what position you held)? You see when the stake goes out of the control it threatens the whole account.

        1. I was long 6670, 6600, and 6570, and the market fell to 6400 remember. I have a relatively small account, so I closed all my position at 6450. I lost all profits, plus 50% of my initial account. My stops also were at 6400 which would have been hit and I would have lost nearly 80% of my account. But after that dip, we rose to 6700 pretty fast and I would have been in profit. That’s the way things go, I am glad I took the loss where I did because I might have closed them at 6400 and lost a lot more. I am now just within 10percent of break even again. I have only been trading a year too, so its all learning at the moment, i’m not too fussed about the money. In hindsight, if i had only opened one stake at 6600, I could have held on for a longer time. Now I try not to average up/down, I find if you are losing and averaging it can all go wrong like it did for me, it basically doubles your losses if you do lose.

          1. Oh gosh, that must have been awful experience. I agree with you about the risk of adding up but it’s so easy to fall into this trap. That happens to me time to time. Still lesson didn’t learn.
            But it’s another one.
            Hope I would be able to work out my actions to minimize my losses. It’s all down to poor stop loss management technique.

  38. Mo I’m not sure. If we lose a bit more I will be tempted to close and take the hit and revisit if we hit 6900 plus

  41. Dax ftrs low/high in the 1st 30 min was 9720/9757, a break of that low could see some decent selling.

    Opening 30 min range seems to work well of the Dax, better than the FTSE as the moves tend to be stronger.

  42. To jack two, dont worry about the loss, like white said.
    I lost a grand in a day at the start of december. Learned it the hard way.
    Easily gained it back easily after the feds tapering announcement.

    1. it’s like they let the kids play with it in the morning and then the grown ups take over in the afternoon !

  45. Right, so now I am safe till 7070 or something. Hoping for a good pull back in the next couple of weeks.

  48. Nick’s spot on with his chart today. It gave me hope for some stake closures today. It did work. Thanks.

    2. Also long 6819…targetting around 6840 and then short there (hopefully US confidence report will push it there)

  56. Apologies for my constant comments over the last few days. I am pleased to have closed my short. Will wait for an entry to short again much higher above 6,900. I am too fearful to go long here even at 6,800.

    1. Well done, you are brave and relieved, I still have a tail running. Still hoping for a decent pull back (retrace) to minimize.

    1. yes, I got b/e at 6810 since morning! Yesterday was better, in a way, my b/e was hit and I had a chance to get back into market thrice. 🙂

    1. still think the gap in dow from yesterday might get filled and pull the ftse up..long dow 16407 stop at BE…long FTSE 6820 from this morning.

      1. Limit on dow at 16470….will probably close FTSE long once Dow get 16407. Or migh just chicken out and close DOW early

  61. For those who trades stocks, RIO high on Dec 30th was 3420, after that it dropped to low of 3072.

    High today 3419.5…

    Lovely that.

  64. Hashmash, how come your short? Is this your indicator? And is this a short term or long term trade?

  65. But I think we are in a new upside trend.
    I took today one risky at an upper level.

      1. I see a topping tail in that daily candle.
        Will Monday bring down FTSE to lower levels ?

  73. Not a big topping tail, almost nothing. So no big sign for down day monday.
    DOW and SPX are still below this year. If the descending trend line DOW breaks, then up, upppp

  74. US closed Monday so FTSE on its own Monday. Tuesday always bull for US especially after a long weekend. Hence expecting FTSE to take next up leg. Anyone else thinking the same?

    1. Let me see….. GDP, INDISTRIAL PROUCTION AND RETAIL SALES out of China on Sunday night so….it can be tricky

      1. After 1 hour of the open we shall see where it wants to go, then if trend remains up, we need to find the better deep we can

  77. Im still profitable for the week, but yes discipline is the key to it
    ny main strategy is wait for the drops now.
    Got a small short which i will keep till then.

  78. Profit taking market dropping people not going to risk there profit on the Chinese data coming out this weekend.

  79. I think it was the FTSE carrying both for the last couple of hours. I definitely think the FTSE will open higher on Monday since the DOW will not be trading.

    I am saying this and I am short, so no good outlook for me…

  80. FTSE inside a Broadening Top. Wider moves up and down. Looking for dips. Uptrend intact

    1. There are many people still in the short side, that were caught in this unexpected move through 6800. SO the short squeeze is not over yet. Any new low is quick filled

  81. I hope some spikes up to 6880 area and then down to 6600. I wish. Don’t want it to cross 6900.

  82. Have just spent a bit of time on the main indices accompanied by a selection of indicators. My view is that we have a bullish week ahead. Take the FTSE; we’re in an upswing now which picked up momentum again on Friday 10 January. Last Thursday 16 and Friday 17 January were disappointing for the bulls, but the indicator shown in the chart below suggests that impetus will develop further. The index is holding a path in the top track of the rising σ-channel, above LinReg 100 – fairly bullish situations.

    If the upward momentum does last for a bit longer then there is a good chance of a break through the top barrier of the channel, which will see the FTSE > 6900.

    http://imagizer.imageshack.us/v2/800x600q90/23/e4k1.png

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