9th October 2017
No missiles launched over the weekend despite Fridays threat, though the latest rumour is that NK may fire one today or Tuesday, probably the latter if at all as it’s another one of their “official” days. Overnight the futures prices spiked higher, with the FTSE testing the 7541 level, but have since dropped back. We also have a bearish 2 hour chart at the moment with resistance around that area, so may see a very weak bull Monday if we get one.
Gold started rising on Friday having moved down to 1261, so there is more likelihood of a pull back in over inflated equites for the next couple of sessions, but maybe only as far as 7450, possibly 7400 or 7350 which is daily support.
FTSE 100 Outlook and Prediction
With the daily RSI at 71, a rising gold price, and a weak 2 hour chart, I expect that we will see / nay need, a bit of a pull back before further upside. There is pretty strong resistance at the 7535 level and a short here is worth a go. We have had a good run of bullish Mondays so far in the second half of this year, but as various shifts happen in monetary policy, as well as, on the face of it, overvalued stocks, we might well see a bit of a dip back from this area. Probably not a massive sell off though, but more of a reliever of some overbought conditions.
There is decent daily support from the 25ema at 7394 currently, though a dip down to 7350 is possible. We also have cable starting to rise off support, which may weaken the FTSE 100 a bit.
I was expecting a bit more bearish action over the last 2 sessions with rise and dip days, however, the bears seemed very unwilling to really go in at the resistance levels – a dip of 10/20 points was about all they had in them. They probably need a catalyst again, however it’s worth remembering that the FTSE is lagging the US in terms of making record highs so may well catch up and also rise strongly during Q4.
So, looking for a bit of a morning rise to test the 7535 area before a drop back to 7500 and possibly lower – there is S3 at 7487 and the 200ema on the 30min at 7477. If there was a catalysts (missile launch cable of reaching the US?) then I am looking for 7455, possibly a low around 7355. However, I expect then the buy the dippers to reappear.
If the FTSE was able to better the 7535 area then a rise to 7555 fib resistance and 7585 looks possible, the latter being the top of the Bianca channels.
This week I am thinking a dip down to that 7400 level, 7350 possibly, before further upside and a break of the 7530 resistance level.
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Morning All! I do see that it can surprise everyone with therise considering 540 got touched last night.. but pull back would be nice. short from 21
Tagged a few stops too I expect!
ya waiting 30 mins to close above 23 and me done!! cold have close it 15 but ido think 490 could be seen today
only thing I hate is when there is not at all volatility and it just keep rising slowly and slowly.. to hard to call then
sometime there is no logic or atleast the one I have works!! cable drops it rises.. cable rise no drop so far .. I wonder if they actually know what all peeple doingand only then make the market move in their favor
Morning all. Holding ftse and dow shorts
Hi!! Did you hold over weekend??
and what sort of drop you are expecting?
Hi sharma yrs held over the weekend. Expecting a double bottom at the 200 area
thast a long shot !! but good luck
please help in understanding your thought behind it, my guess is if you are targeting that big than your stop would be in accordance and small size.. would help me making my trade plan
Okay, so we are in a 4th wave up which is why we saw the turn from 200 area. Now the degree of the waves matter, i believe we are in a lower degree wave suggesting that there is morr upside in the larger 4th wave. I am basically expecting a mini 5th down. 7150 would have been an ideal target but given we are 50 points higher than i would like it to be, i am reducing my target by 50 points. Bear in mind that 4th waves are notoriously difficult to spot and put a target to. The fact that it has coincided with a key dow area makes me more confident about holding the shorts and that the upside is over in the very near term.
thanks!! But is that on assumption that we have touched the high for 4th wave
There’s no fourth wave.. that would imply an impulse down which there hasn’t been as all of the waves down are overlapping. Under Elliott wave you can count it as a wave 2 assuming the ATH holds or a b wave up (corrective activity). Personally don’t use EW as it’s too subjective.. trading well is about discipline and risk management rather than market calls. Absolutely no point looking for a 300+ point correction when we’re trending up and we’ve only just had one, plus the Vix is 9.. makes it difficult to get that kind of move. If 7540 holds there should be a decent reaction downwards coming but first step is to break back under 7480-500 area and it’s very likely 7380-400 would be strong support anyway.
Well in some ways yes. I was hoping 7475 was the end but thats a perfect world target. We know we live in an imperfect world 🙂
Added to gold longs again this morning.
Very tempting to short ftse as there surely is a correction due.
Will wait for US open to blow off some steam before committing to that.
Got rather lucky with the rise last week. I had some ftse, dax, Dow and tech stale longs slightly underwater and had bought a few more on weakness. I didn’t expect quite such a strong rise, but very happy that it did! Sold after the NFP on Friday as thought it was too risky hanging onto them over the weekend. I left a smaller FTSE long with a tight stop on it, which got pulled today. Have started with small Dow and dad shorts this morning to see how it goes.
Shorts are dangerous, longs are dangerous. Not sure what to settle to. Just survived with Dax long closed with +4 but could be worse. Now want short as FTSE and Dax suggest that, but Dow… it spoils everything. But maybe it’s time for a pull back there too?
Buy the dips until 7490s breaks. 7540 top of the range and a sell. But the vol is low so just scalping longs from near the bottom and shorts from near the top of the 7490-7540 range
Mcgcapital. You have suggested levels for Dax for me earlier. Now we are above your highest suggested 12900. Do you have other levels above in mind? I am asking because I have no idea of how you calculate those levels. Others you mentioned were: 12670, 12300 Thanks for any advice.
Hi Jack, I just look on the daily chart and pick off the key levels of support or resistance. So the 12670 and 12300 areas were turn areas when it was trending down. So therefore they were areas of interest on the way back up too. Have to remember that ATHs are bullish as trends can continue.. and this move has no surpassed the May high. That being said the candesticks have levelled off at the 13000 area so I would be selling the Dax with stops above there looking for a dip – 12600 area looks like the next support on the daily but quite likely it wouldn’t get that far without a retest of the high first. If it breaks above 13000 you’d want to be long again though
Thank you for explaining your reasoning. I will keep an eye on those areas.
Hey Mcg, i agree EW is very subjective and different individuals can get different answers but why do you think this isn’t a fourth wave? What’s your count based on?
I’ve not got a count overall.. i was just meaning that the two basic rules of EW are that the third wave of 5 can’t be the shortest wave and also that wave 4 can’t overlap wave 1. So basically if a market is impulsing on the time frame you’re looking at, you’d get a first wave in the direction of the impulse followed by a second wave retrace, followed by a third wave in the same direction as the 1st (which isn’t the weakest wave), followed by fourth wave which terminates before where wave 1 ended, then fifth wave to new highs/lows. if the waves don’t obey those two rules then they aren’t impulses so are corrective.. so count as ABCs instead. The problem with FTSE is it seems to have moved in ABCs most of the year while the Dow impulses higher. But that was the case 2009-2015 too. The impulsive rallies were December-January and in May, and if anything this looks similar as there are no overlaps on the downside yet since it rallied off 7200. I can’t see how it can be counted as an impulse lower as wherever you have the first wave from 7600 or 7550 going to, this retrace has already overlapped it. like I said though, all very subjective which makes it too difficult to use as a trading tool for me
Okay. I think you are referring to what we would expect in an uptrend w.r.t 4th waves. I am talking about A wave which moves down in 5 waves. We can have the 4th overlap the 1st and a 3rd in a B wave can take out the top of A as per EW. I am referring to the 5 waves within A as opposed to the start of a new leg. Dow for example is completing the 5th, so would expect a decline to 200-100 area as part of the ABC correction with C ending around 900.
Alternate count on a higher degree for dow is we head to 21900 first and then retrace up in a B ending C at 20900
This long on Dax really spoils my cards. My short 12967 had to be terminated on +1
It did a spike at 4.30 to kill the stops for shorts and dropped to 12940 as my target was there. I was out of course. Not the best pattern.
Long Dow 22763
Closed Dax long, no other reason than was in profit and I think Dow will go up quicker. I only use small account so need to be strategic with my trades.
Bull Monday please Mr Dow!
Great trading decision. I waited for short and it only dropped 7 points for me.
Let’s wait and see….I’m counting on it doing as it always does which is never a great plan. I have sl set.
If it’s not dropped by 7:30pm I will add more to long
I hope you were out of the long. I just checked. My short 12967 would be good if they didn’t decide that stupid rise at 3.50. It was completely unnecessary towards the close at 4.30. My SL would have been taken, it was 7 points.