6838 support 6817 after that, 6883 resistance

Good morning, sometimes it just isn’t your day. I had the long order set yesterday and it just missed taking with the initial dip before spending the rest of the day climbing. Interestingly the climb stopped at pretty much that 6883 level mentioned as resistance though I was expecting it to keep going. Of course, hitting that level has got the media in a frenzy about new all-time highs (yesterdays was the highest close since 1999 – the dot com bubble era). That is usually the time to start exercising some caution as I don’t think many (well apart from some retail investors) will be piling in with prices at all-time highs, the smart money I am thinking will wait for the dip back before buying in.

Bianca Trends
Bianca Trends

From today’s telegraph, “Vodafone jumped 4.1pc following its share consolidation in the wake of its $130bn (£79bn) deal to exit its US joint venture. Vodafone shareholders have started to reinvest some of their windfall from that deal, which helped to lift the FTSE today and is expected to continue to push it higher in coming days.” “While stockbroking firm Charles Stanley expects the FTSE to end the year at 7,400, its investment director, Douglas McNeill, said: “There are lots of risks still around. We mustn’t forget that we’ve had a pretty good run in equities”. Stress tests measuring health of the eurozone banking system and the threat of deflation in Europe could unsettle markets, he said, as might tensions between Japan and China.” From here

We had the daily channel tops around the 6900 area yesterday, maybe that would have just been too convenient! What was interesting was that the Dow fell quite sharply after hitting the 16300 level, which means that bulls were quick to take profits, though it still ended the day positive buoying up Asia markets. Today could well fit the usual pattern of bull Tuesday though the dividend today is only 2.7 – not a level that will see buyers rushing in at the close.

Asia Overnight from Bloomberg

Asian stocks climbed, with the regional benchmark index at its highest in a month, while the South Korean won rallied and nickel rose. China’s yuan fell the most since December 2012 and gold retreated.

The MSCI Asia Pacific Index added 0.7 percent by 2:44 p.m. in Tokyo as SoftBank Corp. led a rally in telecommunications firms after it was said to be interested in buying a stake in South Korea’s Line Corp. mobile messaging service. Standard & Poor’s 500 Index (SPX) futures were little changed. The won rebounded from a two-week low and Turkey’s lira weakened 0.6 percent. China’s currency slid 0.24 percent while the country’s money-market rate halted a 10-day decline. Nickel advanced 0.2 percent in London and gold declined from its highest close in almost four months.

Telecommunications services companies led gains on the MSCI Asia Pacific Index after people familiar with the matter said SoftBank, Japan’s third-largest carrier, has made an offer for the messaging service owned by Naver Corp. Germany may confirm economic growth accelerated in the fourth quarter, while a U.S. report will probably show home prices rose 0.3 percent in December from a month before, according to Bloomberg surveys. China’s central bank is draining funds from the financial system as lower money market rates signaled ample supplies of yuan.

“The global economy looks solid enough,” said Evan Lucas, a markets strategist at IG Ltd. in Melbourne. “It’s not what you would call booming growth but it’s not anemic. Europe looks better than probably most would have expected, you’re also seeing reasonable numbers coming out of the U.S. and that gives us confidence. The lift from Wall St overnight was good, it certainly propped up Asian markets.”

The MSCI All-Country World Index climbed 0.2 percent, set for a third straight advance and the highest close since December 2007. The S&P 500 advanced 0.6 percent to 1,847.61 in New York, less than one point shy of a record close reached Jan. 15 after paring gains of as much as 1.2 percent.

FTSE Outlook

FTSE 100 Prediction
FTSE 100 Prediction

Well yesterday’s strong close has got everyone in a froth and calling for an assault on the record highs of 6950. Its looking more and more like the dip from the Santa Rally’s 6880 to 6400 was the early year dip before the rally (rather than the 6200 where the ProTrend supports were) so I think the FTSE is just racing ahead of my 2014 plan. I expect it to stutter a bit around that all time high level if its seen soon, and probably dip from there before breaking on the 3rd test later this year to then get the year end close around 7200.

For today the pivot is 6838 and we also have the Bianca 10 day channel lending support at 6828 so if we do get the initial dip from 6860, to that level I think we will then see a bounce, most likely to yesterday’s high point around 6885. We are still within a pretty large 30 minuet channel with extremes at 6835 support and 6940 resistance. Should it close above that channel resistance area then I think we might see a spurt upwards, but it needs to CLOSE above it.

Support wise today if the pivot breaks is 6817 after the channel has broken, which is roughly where the 200ema is likely to be later on today, after that level 6777 where the green ProTrend line is on the zoomed out 30 min chart below.

128 Comments

    1. glen i think were looking at 6800 before any longs, i have my ticket on at 6801 taking profits at 6865. with 20 point stop.

      1. Thanks Maz I might widen my stops still feel it will bounce perhaps on US opening all seems a bit sideways at 6820-6830

  2. So Nick are you saying you have abandoned your view that it will get to 6200? I must admit I still think there are enough “opportunities” to make that happen at some point – China debt, interest rates, cumulative effect of taper being removed etc. It may well get above 7000 on the current run but I still wouldn’t be surprised to see the market take a significant dip at some point this year.

    1. The way its bounce back from 6400 makes me think 6200 was just being too greedy with the fall from 6880. Still could though of course as all this is just propped up with printing money

  3. here a free tip!!!!!!! go long from 6801 taking profits at 6865. keep short stops i use my 20 points rule. pretty much a winning trade if 6801 is hit.

    2. if you have wide stop then u might be in for a good run, 2.30 to 3.00 pm i think we might be looking at 6860-6880.

  5. That 6830 is some resistance at the moment…got an order for 6833 to go long and currently long from 6820 gl guys

  6. Sentiment seems to have changed with everyone shouting long now…

    Inclined to agree with Nick that this might be a good time to soon think about doing the opposite!

    1. not gone yet….
      if it is … i gotta accept my loss and close long trade…my indicator dropped massive amount as well..

    2. Do you mean short from 6860? No, I reclaimed some of my yesterday’s losses, instead of £800 lost £180, could have lost maybe £80 but never mind.

  14. Sooo,

    We got within 10 points of my 6900 I predicted for end of Feb.

    Next leg is 6250 by 17 March, let’s see what happens 🙂

    GL all.

    2. Lets hope. Still holding short from 6600. If this year is going to by choppy, 6600 seems like a good place to hold for the medium term wether its going up or down

          1. Lol, let’s see then.
            I have m reasons, but too much to explain here.

            Heavily short with 6250 as target 🙂
            Gl Hash

        1. Hi Scotty, it’s all about the DOW.
          My opinion of the DOW is not a great one. See a very small growth prospective.

          One of the main reasons is just overbought markets in 2013. I think we will feel the brunt this year and the FTSE is too close to year end predictions for it to grow too fast.
          We gained almost 600 points in half a month, so why can’t we lose that in half a month.

  16. Everything I’m looking at shouts drop now.

    6800 is holding like 6819 did but the pressure downwards seems too strong, if it breaks then I think 750 is realistic

    1. bears do look quiet strong…but other markets barely down relative to ftse!
      DAX which is usually crazy is stable at -0.25% US roughly -0.18% and ftse is down nearly 1%…
      There is a US confidence report at 1500 (expected tiny bit worse)…if that surpirses on the upside, then we may see recovery in FTSE…and im inclining to that right now…if i look at my indicator intraday (which i try not to, only end of day) then the move right now is showing a reversal (starting a bear trend)

  23. Dip makes sense considering yesterday’s ridiculous rise, got myself 40 points from the short, not consider any open positions until the storm has cleared

  31. If we get stay above today 6860 today expect more rises tomorrow morning with GDP figures out might see 6900, just a note for those planning to hold on…

  35. It really cant make its mind up today whether it wants to continue the recent rally or start to head back down. I am still long but the lack of any significant bounce that it can hold is starting to give me some cause for doubt. Not going to rush to any conclusion and will see what the close brings.

  39. Never cease to be amazed how the FTSE can be so weak all day, struggle to rally and all of a sudden it rises 45 points just like that in 20 minutes. Still holding my long and we are getting a nice pin bar on the daily chart (unless we go all the way back down)

      1. How do the platforms generate this stuff ? – we are back to 6800 with the Dow shedding just 40 points. Inclined not to believe this is real (during “normal trading hours”) and tempted to add to my long

    1. If so, something is about to change. In this juncture, anything is possible. Hope is for the upside

          1. Unfortunately IG is afraid of making volume available via its version of ProRealTime, so no! Agree it could be a watershed signal …

  43. FFS – Just checked in again and seen FTSE hit 6849 and now stopped me out at b/e 6797… This is a joke. Only disappeared for 90mins. Had a limit at 6860. Pissed off lol

    1. Same I had a stop at 6810 would have been well in profit if it didn’t stop before hitting 6849 🙁 tomorrows another day

  44. Glad I did not day trade today. FTSE all over the place, the last 6 times i’ve checked its bounced from 6790, 6820, 6800, 6850, 6799, 6827, now its 6799 again lol

  45. Jim in boursorama the volumes are completely different. SO maybe stockcharts are having some issues

  46. If anyone can have some insight in the exact volumes in US indices, specially Nick, would appreciate

  47. Hash, ive just read your comments about a 64-6500 in the short term.
    But if we get a drop by mid march, and further tapers, surely that 6250-6300 will come.
    Btw what is your indicator now saying?

  48. Back in long. Was gutted to be out earlier. Weak longs ie me getting binned today for the next leg up!

  49. Wow, I thought I would come and see Dow at 16300 and FTSE at 6860 as I was very frustrated and disappointed with the sudden drop at 14.32. Did not expect that at all. It’s like waiting all day for it to rise and all your profits just disappeared in 7 minutes.
    You see, I am learning to hold longer and how it repays me?
    How would anybody know how it was going to end at 14.30? Well, I expected some drop but not like this, it was brutal.

  51. No doubt we are due a dip soon. However it is also likely that we will hit 7000 by April. If I was to guess….I would say that any consolidation will be to around the 6600 – 6650 mark in March and then rise upwards from there.
    But personally I’m just closing my eyes and holding.

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