Good morning. Main news over the weekend is focussed on the USA and the budget stalemate, where its looking likely the US government might actually shut down for a day. After the tapering debacle and the will they, won’t they, we now move onto the next, being the debt ceiling and will they won’t they increase it. Got to love the yanks! It certainly seems to have spooked markets anyway opening quite sharply down this morning compared to Fridays close. However it will probably be the usual story of taking it to the wire in a show of brinkmanship just as they have been doing previously. Dax has hit the 8600 support area and is looking like it might bounce a little from there, but the next support is 8571. S&P has hit 1680 where there is a little support, and the FTSE has hit the bottom of the 20 day Raff and also a support level I have at 6440. So, there is a possibility that we get a little bounce from here as 3 main indices are all hitting support areas that I have on my charts.
Asia Overnight from Bloomberg
Asian stocks fell, with the benchmark index paring its biggest monthly gain since 2012, on concern the U.S. government is headed for a shutdown amid a budget stalemate.
The MSCI Asia Pacific Index dropped 1.1 percent to 139.33 as of 1:43 p.m. in Tokyo, with all 10 industry groups on the gauge falling. It’s headed for a 7 percent increase this month, the most since January 2012, and is up 6.8 percent this quarter. Even if Congress resolves the budget fight by the Oct. 1 deadline, U.S. lawmakers would move to the next fiscal dispute over raising the $16.7 trillion debt ceiling.
“There’s no agreement among the government at the moment, and if they can’t agree on the budget, there’s no way they are going to agree on the debt ceiling,” said Andrew Sullivan, director of sales trading at Kim Eng Securities in Hong Kong. “It’s the end of quarter and so you may see people looking to sell into the recent strength, locking gains, on expectations the U.S. government does shut down.”
The September gains pushed valuations on the Asia-Pacific measure to 13.7 times estimated earnings as of Sept. 27 from 12.7 at the end of August, according to data compiled by Bloomberg. That compares with 15.4 for the Standard & Poor’s 500 Index and 14.3 for the Stoxx Europe 600 Index, the data show.
Budget Impasse
Futures on the S&P 500 Index slipped 0.7 percent today after the gauge declined 0.4 percent on Sept. 27. Congress is leaving itself just one day to end a budget stalemate that raises the risk of the first government shutdown in 17 years.
The House of Representatives voted 231-192 yesterday to stop many of the Affordable Care Act’s central provisions for one year, tying it to an extension of U.S. government funding through Dec. 15. Should the Senate reject the bill today the government could be shut down from tomorrow.
More info here
Outlook
Looking at the S&P to start with I have 1680 and 1671 as supports, coupled with the Dax support mentioned above at 8530 I think we will dip a bit further across the board but then possibly have a bounce, on the FTSE probably from the 6405 area where we have the 200ema on the daily chart and Fib 4 on the 30minute (pink line). Initially I have put in a climb as I think the initial supports will hold but then break later in the day, but I think we can say that 6404 will be seen today as markets will be spooked by the US situation. Again. Its certainly going to be choppy today anyway, even more so this afternoon when the US comes online. I have also got Dow support at 15110 which is looking likely to get hit!
Well said Nick. I also think we will have either climb to us open then fall or fall before us open and then who knows. Feel they need a bit more room to climb before end of yearish and this is good opportunity. FTSE recovery this morning has spooked me a bit. 🙂
That wasn’t much of a recovery. But still I was spooked of my short 6465. I thought it should touch 6476 first. It still may do.
Hope not
Here we go.
Closed my £55/point short Friday expecting a spike up on open today. Gutted
gee £55pp, you put my £4pp to shame!
al, you’re sensible….i’m not!
Italy crisis
US Gov shutdown possible
bearish?
FTSE Daily and Weekly showing bearish
Dow Daily and Weekly showing bearish
Looking for a short position around 6520
Well Al the bonus is wide stops i cant imagine myself doing high volume trades the numbers will make me crazy.
Europe recovering, ?!
5 times it tried to break up. I should be now really.
Jack, How are the volumes compared to the previous ones?
Volume is really slow today so I am not trading for this reason. Got 5 points just in short scalps.
What if fails this time too?
It’s called consolidation, may drag for hours.
It’s trying the 6th time.
Like watching paint dry…already my head is polluted with the bs from Bloomberg, but hey its occupies time.
Going short with 10 point stop, expecting a drop at DOW open.. Will be watching closely though
plays jaws theme
I suspect a sting in the tail here but hope not
Keep the stops tight guys! Gone short from 6455
Ahwab, whats ur SL? I am planning to go long from here.
I nearly went then, but something stopped me.
and we’re off
Went long already, picked up 3 points, but that DOW showed too much resistance. In the end US markets decides everything…
Gone long from 6457, carrying into tomorrows bullish tuesday bias in addition to it being the 1st of the month.
Jack Two, its 7th attempt now 🙂
It looks like today buy is 6550 and sell 6560 until it breaks. Not sure if I am trying it today.
Picking up… I am long with SL 6454
From which price you are long?
come out
IN @ 6463, booked loss @ 6460, thanks 🙂
What do you mean by “booked loss”? How does it work?
That’s why nobody wants to give advice on trading. The price is liquid.
Jack, I am long @ 6463 with SL 6454, came out immd, as you told ….. closed @ 6460
Hi Senu,
If you are looking for a long position, you want to aim to get in at around 6450, and take profits at 6460.
Still quite risky though, the market seems undecided right now.
I wouldn’t long above 6460 in this current moment in time.
anyone know the div adjustment tomorrow yet?
Still thing Dow going to go down big time, hopefullytake ftse with it, pls
Good Recovery, missed those long
That’s why I told myself never to give any advice on a trade. Overall guidance is ok, but everybody making their own decision.
But the low was 6554, it might have caught your stop loss and shooted back up. So instead of 3 points you would have lost 7.
Jack, no problem, I will never blame you when I go loss, because I am doing with minimum contracts only. Cheers
Jack Two, 6476 came, as u were saying in the morning
Looks like 6476 (+-2 pips) was the one after all. LOL
Still got long at 6455, might see 6470 again by close
just hit 6470, good call ahwab
closed short @ 6446. just £350 away from break-even 😉
What a volatile movement near close !!
As we approach quarter end here is my ytd p&l. Not doing this to boast – I’m sure plenty here are doing much better. Just more interested in how people risk manage their positions which of course is the key to trading. For me I have backtested my strategy and worked out the appropriate leverage levels to remain in the game. So most times I am over capitalised but can cope with stress events.
It probably won’t come out too good in this format.
Index FTSE DOW HSI Total Leveraged Return
Current Price 6,456 15,170 22,860
Weighting 47% 34% 19%
Capitalisation
per Contract (GBP) 600 825 175
Leverage Ratio 11 11 11
January SHORT SHORT SHORT -21%
February LONG LONG LONG 5%
March LONG LONG SHORT 21%
April LONG LONG LONG 9%
May SHORT SHORT SHORT -21%
June SHORT SHORT SHORT 41%
July LONG LONG LONG 53%
August SHORT SHORT SHORT 35%
September SHORT SHORT LONG -11%
October LONG LONG LONG 0%
November LONG LONG LONG 0%
December LONG LONG LONG 0%
YTD Returns
(Non-Leveraged) 9% 8% 15%
YTD Returns
(Leveraged) 104% 98% 170%
Cumulative Total Leveraged Return 110%
so your total Return on Account is 110%, blows my 34% away! well done
Thanks. It is but of course it can be blown away in the last quarter.
However the key is the ability to repeat it and maintain my discipline. Overtrading and excessive risk taking / leverage are probably the biggest dangers for everyone.
Cheers Javed 🙂
Al be happy, 90-95% of hone traders are losers…
Been at uni all day and every time i checked…ftse was either at 6470 or 6450 it was crazy-managed to pick up a few points tho 🙂
by the way how long have you guys been trading for? (open question) just curious because ive only been trading for about 4 months now..
6 years and still only making peanuts compared to day job!, 1.5k vs 70k…
Don’t worry Al just keep going as long as you have confidence that your strategy works. That is key as well. Even if you look at my results I was down at the end of May – the psycological damage at that stage is enormous…..we all doubt ourselves which affects our decision making. Then I have basically had a storming 3 months which should mean I make a profit this year. Even now I don’t think I will repeat that pattern next year but just have to keep going.
Btw I have been trading for about 15 years…….built up some large portfolios and lost everything a couple of times……..dot com bubble and early 2007. Have changed strategies a number of times over those years and now come to rely on my current one as it is easy to monitor and psycologically relatively easy to execute and adhere to.
I thought today at least it will start moving. I hope it will not be the same day like yesterday.
Missed the retest of yesterday’s low 6440ish where I thought it would initially drop, not it looks like coming back again.
now it looks (I meant)
Javed, i’m actually very pleased with my performance +34% YTD, if I had a bit more spare cash and stopped spending it before compounding it i’d be making more real cash, but that’s the problem with having a wife who likes expensive holidays..!!
Those idiots over the pond are doing pump and dump again today and as usual those brainless traders in Europe are getting in to the trap…lol…they are so f…. predictable 🙂
another one…. Apple is up almost 2% because some very important??(they love to think that way about themselves) told Tim Cook to do 150B buy back!!…..sure, Cook is the kind of a guy who would just do that..lol…how stupid are those people??!!lol