Apple disappoints FTSE getting bearish with 6305 resistance

Support 6266 6256 6225 6208
Resistance 6284 6292 6306 6318 6379
Good morning. Fairly flat FTSE yesterday which only managed to rise to the 6300 shorting area after hours (in anticipation of Apple results, which disappointed and meant it fell back), though the Dax and S&P trades worked well. Gold bounce back from the 1232 area and is currently 1242. Big item to watch today is the Fed meeting concludes with a rate decision announced at 7pm this evening, with a near zero chance of an increase. 09:30 sees UK GDP, forecast at 2%, down from 2.1% previously.

US & Asia Overnight from Bloomberg
Asian shares fell for a fourth day, led by technology stocks, and U.S. stock index futures declined after Apple Inc. reported its first quarterly sales drop in more than a decade. Australia’s dollar sank by the most since February, while oil climbed to a five-month high.

The MSCI Asia Pacific Index was set for its longest losing streak in two months and futures on the Nasdaq 100 Index dropped as Apple tumbled more than 8 percent in after-market trading. Australia’s dollar weakened versus all 31 major peers and the nation’s bonds rallied as an unexpected decline in consumer prices spurred bets for an interest-rate cut. South Korea’s won and the yen led gains against the greenback before a Federal Reserve policy meeting concludes Wednesday. U.S. crude extended its rally after closing above $44 a barrel for the first time since November, while silver prices advanced.

The world’s three most valuable companies — Apple, Alphabet Inc. and Microsoft Inc. — have all released disappointing results in the past week, painting a bleak picture of the technology sector as most American companies’ profits prove more resilient than analysts anticipated. Three-quarters of Standard & Poor’s 500 Index members to have reported so far beat estimates in what was forecast to be the worst U.S. earnings season since the global financial crisis.

The latest earnings were “pretty disappointing,” said Angus Nicholson, a Melbourne-based market analyst at IG Ltd. “We may see weaker volume as investors hold off ahead of the Fed meeting today and the BOJ tomorrow.”

Fed Funds futures reflect zero chance of an interest-rate hike this week, though the monetary authority’s comments will be scrutinized for any hints of a move in coming meetings. The Bank of Japan will review monetary policy on Thursday and Prime Minister Shinzo Abe’s economic adviser said Tuesday it’s possible that it will announce increases in its purchases of government bonds and exchange-traded funds.

Stocks
The MSCI Asia Pacific Index was down 0.6 percent as of 1:19 p.m. Tokyo time. Standard & Poor’s 500 Index futures slipped 0.3 percent, while contracts on the Nasdaq 100 slumped 1.1 percent. Apple supplier Murata Manufacturing Co. fell 4 percent in Tokyo. Canon Inc., the world’s biggest camera maker, tumbled by the most in three years after cutting its full-year operating profit forecast by 17 percent.

“If a company posts double-digit declines in earnings, it’s going to get whacked,” said Chihiro Ohta, senior strategist at SMBC Nikko Securities Inc. “I think we’re going to see quite a few companies post drops like that.”

Japan’s Topix index fell 0.7 percent, Hong Kong’s Hang Seng Index declined 0.2 percent and the Shanghai Composite Index was little changed. Australia’s benchmark rose 0.2 percent, led by banks.

Futures on the FTSE 100 Index fell 0.1 percent before the U.K. releases details of its economic performance in the first quarter. Gross domestic product probably increased 0.4 percent from the prior three months, a Bloomberg survey shows.

Currencies
Australia’s dollar slid 1.5 percent versus the greenback after a report showed consumer prices fell 0.2 percent in the first quarter from the previous three months. The odds of an interest-rate cut at the central bank’s next policy meeting on May 3 surged to as much as 50 percent from 15 percent on Tuesday, according to a Credit Suisse Group AG index based on swaps.

“A pre-emptive May cut is surely now a real possibility,” said Gareth Berry, a foreign-exchange and rates strategist at Macquarie Bank Ltd. in Singapore. “At the latest, an August cut is now inevitable. That spells the end of this three-month-old Australian dollar rebound, and the downtrend can now resume in earnest.”

The won led gains in Asia, climbing 0.4 percent against the dollar, and the yen strengthened 0.2 percent.

Commodities
West Texas Intermediate crude rose 1 percent to $44.47 a barrel, building on last session’s 3.3 percent jump. U.S. inventories dropped by 1.07 million barrels last week, the industry-funded American Petroleum Institute was said to report, before the government releases stockpiles data on Wednesday. The World Bank also boosted its forecast for oil prices this year, projecting that refinery demand will pick up and U.S. output cuts will steepen in the second half of 2016.

Industrial metals declined, with copper falling 0.5 percent in London.

Silver rose 0.6 percent to an 11-month high, extending gains after it entered a bull market last week. Output from mines will fall for the first time since 2011, while demand for the metal in uses including industrial products and jewelry is heading for a fourth straight gain, supporting prices, according to CPM Group.

Bonds
U.S. Treasuries rose, snapping a seven-day losing streak that was the longest in almost three years. The 10-year yield fell two basis points to 1.91 percent. Futures markets assign zero probability to a rate increase when the Federal Open Market Committee concludes its two-day meeting Wednesday, and less than a 20 percent chance of a move in June, even after evidence that some officials argued in favor of an April rate increase at their last meeting.

Australia’s government bonds reversed losses after the inflation figures were released. The 10-year yield dropped six basis points to 2.60 percent, having been around 2.70 percent prior to the data. [Bloomberg]

FTSE 100 Outlook and Prediction

FTSE 100 Prediction
FTSE 100 Prediction

We have had a bit of a drop off from the 6300 level that was tested just prior to the results last night, and I think we might see some further downside later so I back to thinking shorting the rallies is a good move today. There is initial resistance at 6292 on the 2 hour chart, with the 200ema at 6306 above that on the 30min chart – so shorting around this area looks worth a go. However, we are not far off the bottom of the 20 day channel which has held twice so far in recent days – a third test might see it broke though, and if it does then a trip down to 6225 and lower looks likely. If the bulls were to break 6306 then 6379 top of the 10 day Bianca is the most likely next stop. I am feeling a bit more bearish than bullish though so don’t think that we will see that today unless there is surprising news, either for GDP or the Fed later this evening. We do have support at 6265 on the 2 hour chart now from the Hull moving averages, as well as the 20 day Bianca at 6256 so if we test this area today then we may see that holding for a while initially.

118 Comments

  1. Morning chaps (and any secret chapesses).
    So, I’m on the verge of giving up my day job to trade. I’ve got a fair chunk of cash to support myself (though most of it should ideally be spent on a house deposit at some point). Thinking of going full time for 3 months, with the quiet times of day used to develop software (the day job anyway) related to systems / indicators.
    Any hints / tips / thoughts / dire warnings?

        1. I guessed that. But for many reasons it’s an honest one..
          If you want exposure to index speculation then diversify a bit of money, think about mirror trading Nick and continue to develop your own system and trade it.
          Giving up a regular income and loading day to day financial needs on this game is a huge step. The industry would eat you whole and not even burp, 90/90/90 is probably apocryphal but not a million miles from the truth.

          1. Yeah I must admit I see it as pretty unlikely to be able to make enough profit out of the gate. I wouldn’t be worrying about day to day living, but I probably would get a bit stressed if I was demolishing too much of my house deposit…

            Cheers for the reality check

        2. inoodle, you’ll not be surprised that it is a “Numbers Game”. The people who are paid gadzillions to run pension funds, unit trusts etc etc struggle to get anywhere near an annual 10% return. So without asking to see your bank statement will 10% of your pot pay you well enough?
          For me, I run it like an extra PEP/ISA. So massive rule 1 is NEVER have more than a 2% stake, normally I muck about with 0.5-0.75%. Good luck if you do decide to give it a whirl, it is not easy!

          1. Cheers chippy
            When you say 2% stake, do you actually mean by looking at the size of the actual leveraged up exposure eg 12k on ftse for a 2pp stake?

          2. To butt in, A £25 trade with an 8 point stop is a £200 risk, x 50 (2%) = £10k total funds available.
            If you are averaging with the market and have stop protected profit you can use that too.
            Personally I draw the line at 5%.

          3. Sorry, inoodle, having said it is a numbers game I got the dot in the wrong place! .2%, normally use .05-.075%. So for every £1,000 max pounds per point is £2.

    2. Have a listen to Better System Trader,32 and 44 Laurent Bernut are a good start there imo.
      Talk to Hugh, hope he looks in and is well.
      Cant really remember names from ‘System Trader,but there is hours of stuff there you could probably play in the background and get something from.There was one this year with a guy who trades and sells systems,if that is your plan, about confidentiality agreements vs bllack Box stuff and likely sales figures and pricing etc etc (kind of a luxury Gym membership business model).

      1. Thanks for that WSF, will have a listen. My expectation was just to use any system myself, but if I can’t get any decent edge out of it I could sell it I suppose haha, though I suppose it’s swings and roundabouts.

        1. Bernut was payed to go short in Jpn for a couple of years by Fidelity or someone and has an ego.
          The guy selling Systems was,give the customers everything they need to be confident and 90% dont use it anyway 🙂 sell maybe a 150 odd,he was only selling to Retail,is how i remember it.

    3. I could not stay quiet here. Once I’ve listened to a successful Russian trader online and he said: Don’t make the trading rule over your life, have a stable source of income and then trading will not rule you over. He meant, you need to have another source of income like websites generating income (that’s what he did) or a real occupation/job and have trading as your hobby more or less and never RELY on it. However it’s up to you.
      But if you still want to do this you need to weigh all cons and pros. I don’t know what experience you have in trading and what is your results/stats. I wish you best of luck in your decision.

      1. Cheers Jack
        Food for thought. Experience – quite a long time doing it (several years), but, terrible stats and only recently seen any light of success.

  2. Morning all,so much for the go long before a Fed annoucement pattern.FTSE at S1 and Dax below yesterdays Close and it’s pivot at 86 fwiw.

  3. Hello guys.
    Dreary morning ahead I think, nominal range 6250/6300 although that half hearted opening rally got the short it deserved. Main challenge is boredom trades.

    1. Obvious short there for 10, the only good thing about these lethargic narrow range markets is obvious stop placement. RSI baby.

      1. Do you use the rsi to relate back to a price? And if so, how if you don’t mind telling?

        1. What I want when scalping is immediate blue ink.
          I guess I use RSI as a reversion to mean indicator to counter trend trade. Once that overbought short or oversold long gets in profit I am very loathe to see it disappear.
          I pay attention to fib % retracement on a micro level and also watch the parallel market action in DAX or DOW, dependent on the time of day, (DAX till 14.00 then DOW) and previous hi/lows and trend lines. Depending on how many of these confirm, I adjust my stake size, but always like to be in the market.
          This all goes into a melting pot in my head, add a bit of “feel” and basically play it by ear.
          Not very marketable, I’m afraid, but seems to work for me.
          .

  5. Anyone else using Chrome/Windows and having problems with this site?
    Ever since Nick’s had flash ads on the right auto running, I’ve had Flash Player crashing a lot. Using Explorer atm and problem seem to have disappeared…
    Don’t want to deprive you guys of my pearls of wisdom lol.

  6. Hi inoodle
    I do not post on this site, but your question I felt required a response regarding my own circumstances.
    I have been ” trading ” for over 6 years with ” little ” success. The first 2 years juggling with a Job. This was futile as I was neither able to focus on my Job nor my trading. However for the past 4 years or so I have devoted my time to trading. I worked daily – during trading hours – to build a system to analyse the market. Most of the systems have been ” Good to Excellent “, but un-tradable. Why ? The market is random ? Yes & No. This is the crux of the matter. There is No way that a totally random set of moves is tradable.
    So I worked on this concept and through years of testing have finally ” evolved ” a system that is not only able to logically build patterns but crucially trade them. On the Ftse – an average figure of a consistant 100 points per day. ( 80 to 180 )
    Today – so far – running at 63.
    You will find it frustrating – 95% of the time. So close but so Far away. But I feel lucky – Now – but that is recent.
    I take it as a Job now. The more time I spend behind a chart – the More I make. A feeling that is Now exhilarating. I don’t doubt anymore about earning from the market. The fear and Luck has truly gone away.
    But there is a Road to it – weeks to years or never.
    There are loads of books, material, advise, seminars, systems, helping hands etc.
    The crux of the matter is that it is an art and can only be mastered through repeated trial & error techniques, that becomes an extention of yourself.
    Good luck and if you need any pointers – post it

    1. I take my hat off to anyone who’s managed to wring 63 points out of the ftse today.
      Bottle it and sell it.

      1. tmfp
        Yes – if I had seen this post 4 weeks ago I would have probably remarked ” oh ya, another con artist “.
        But now – yep very easily possible.
        Package it & sell it – As I said ” an extention of yourself “. So not worth a nickel to anybody.

    2. Wow, amazing to hear and thanks for the offer of pointers – I’m sure I’ll be needing many
      I really would only be looking to grab 20 points a day on average. If I can build up to 20pp then that coupled with the tax advantages would give me a very comfortable existence.
      I guess I’d come to a similar conclusion re the randomness or otherwise – layering on a number of different methods that increase the probability of a correct prediction at a particular level.
      The biggest risk (other than psychological errors) seems to be the behaviour of the market changing to invalidate the system.

  8. Morning Chaps –
    Haven’t been around alot for a while & hope you’re all well ..
    Just reading the latest news on the FDA.
    In Pharmacology, all drugs have two names, a trade name and generic name. For example, the trade name of Panadol also has a generic name of Paracetamol. Amoxil is also call Amoxicillin and Nurofen is also called Ibuprofen..
    The FDA has been looking for a generic name for Viagra. After careful consideration by a team of government experts, it recently announced that it has settled on the generic name of Mycoxafloppin. Also considered were Mycoxafailin, Mydixadrupin, Mydixarizin, Dixafix, and of course, Ibepokin.
    LoL is the best medicine

    1. 🙂 Hi Hugh,good to hear from you,hope all is well.Was reading the Sprezzaturian blog the other day and thinking you might appreciate it.

      1. Hi tmfp – But ofcourse ! Will post later. Been breaking a few rules in a constructive way.
        Strange thought last night …especially as May approaches …we could be range trading like this for a couple of months, atleast until mid June.
        In some ways, these are good markets to trade – just need to adapt a little and be patient.
        I’ll have to fill you in later as I’m still pushed for time as usual….

  9. Wohoo, managed to take short 304.8 on Dax for 5 point stop. Don’t think it will win but I put b/e.

        1. Tbh, I probably shouldn’t have closed but that’s a scalp done. If you think of 5 points as SL, the win was 4:1, it brings some consolation.

        1. Senu, do you have like a set amount of points you normally aim to gain in a day or something? (asked because you said nearly done for the day)

  10. so almost for 2 days now the FTSE is trying to make its mind up, compared to the big moves a week ago.
    Any thoughts?

    1. Strange dynamic here re ftse/Dax. I’d not want DAX to break 80 but if it does and then 70 I wonder how we’d react?

    2. Doing what I said I shouldn’t, boredom short on ftse 62 looking for DAX to give up 80.
      4 pt stop lol, reeealy convinced it’s going to happen.

        2. Well, I shorted 74 cos rsi and DAX distinctly tired, everything went fine except for ftse co operation, so grabbed +1 and will stop trying to make things happen bang in the middle of our current range.
          This disconnect on a micro level between the two blinds me in one eye a bit.

          1. Back to the dizzy highs of 80+, no logical reason not to be looking for a short soon, long 1 min green one would be nice.

          2. Tmfp…
            I think I mentioned that I had downloaded MetaTrader4 from IG at the beginning of March –
            This is the only screen template (see below) I use on Meta Trader..
            Those HA candles keep me focused on trend and the Closing Line – H/H H/L – L/L & L/H…
            Sure…I’ve got the RSI stuff running as well …
            https://www.mql5.com/en/charts/5044713/ftse100-m1-ig

  12. Inoodle; I read here every day but rarely post, however your comment today moved me to add my thoughts to the mix.

    It took me 3 and a half years of repeatedly making mistakes and losing money until I learned to trade according to my personality.

    The trading dream is to take a position and let it work for you whilst you swan off having a life of leisure.

    That’s not my style. It took me two years to learn what to trade (just Dow, DAX, Ftse & occasionally S & P). First two are my preference due to fast movement.

    It took a further year and a half of losses before I learned to play my way.

    A long term trade for me is a day. Occasionally I get seduced into thinking the market is ridiculously overvalued, take a long term position but close it after a few days as it stops me from scalping & go back to what works for me. I trade mainly the first hour on Dow open and last half hour. I’m looking at RSI on 1 min & 5 min candles & have 30 minute candle charts too. support & resistance levels are important but mainly CANDLE READING. I trade with 3 screens open.

    average length of a trade is 2 minutes. This suits my personality and like TMFP if it doesn’t show blue almost immediately I cut it.

    It works for me. At £5 point it’s possible to make 3 or 4 short winning trades and pinch 30 to 50 points without too much hassle. I’ve found if I raise the stake beyond £10 point it clouds my judgement, £5 is my comfort zone.

    Is it possible to earn a living trading full time? Absolutely. Trade the way that suits your personality, manage your trade size relevant to your account and have the discipline to cut losing trades early.

    1. Cheers Geoff, fantastic input around here, thanks!
      Any books you’d recommend on candle reading? I spot a few basic formations but don’t base too much on them as of yet.

          1. Obviously surprised by the continuing grind, don’t the fools know that they’re overbought? 🙂
            Not going to turn a scalp into a mission, stopping at 09 after an average up at 03.

          3. can’t be buying it this early for the divi!

            Play the game FTSE this just isn’t cricket!

          5. Yeah custard, sellers seem on the missing list, as demonstrated by the non function of rsi on that rise.
            I joined you at 03, not too convinced but give it a whirl eh?

  17. Didn’t really see much reason for the DOW to open much below their close, so took out that long suffering short for b/e and just now watching vindication.
    Still think the short side over 300 is best but could see the pop to 30 that I half expected yesterday. Don’t think the divi will have much effect until at least 15.30 when I will start sniffing around to BTD.

  18. Volume is painfully thin on IG by the looks of it, down to 0.2 increments on the FTSE price change, I wouldn’t want to have too much money left on some of the smaller platforms.

    1. Oil has been nice all day,so might get something out of the storage no’s at 15.30,otherwise all on Yellen as the excuse lol

      2. Combination of those two, unlikely much DOW downside and ftse relative strength again (compare diff to 15.00 -30 +3) and the divi, makes sense to be ftse long.

    1. Had an attempt for shorts on Dax, waited on 1st closed with a little loss, second one from 24 profited on top so that’s me for today, 35 profts made. Off now.

  21. Again feels to me like it is thin and looking like it needs something to make it break – why the rally from 60? Anyway, little short at 310, look to sell some more at 30 if it gets there.

    1. Yep, so Oil shanked 40 odd points, led FTSE down a few, waiting for the Div?. Out of short at 02 for a pint. Try again later.

      1. In fact so confused thought I have a go at a long at 300. I should remember that some of the best trades are ones that are not executed.

    2. Rally from 60 was (hindsight) on the cards, Nick’s support plus lower end of 250/300 range. Just sitting here wondering wtf I was doing not longing it….
      Hmm bit of action at last, looks like a gap down on IG then BTDer’s jumping at the chance. Gives pause for thought about how potentially fragile it is round here.
      In context of next hour, I suppose 300 looks cheap…

      1. tmfp, the btder’s are being a bit out muscled by the profit takers/shorts in oil it seems. Still, Brent at 45.80 something is a pretty good level!

          1. Make the news match the price movements as per usual, think its spurious too. Big downside coming?! They are doing a good job of talking it up. Check out S&P compared to the FTSE today….. Short at 2090 looking good 🙂

          2. Agreed, but it is nice to know what the all conquering hedge fund controller of the World chaps are thinking. Actually, change that, I’m not sure I would like to know what they are thinking!

          3. Will be interesting to see where we are in the morning post Janet.
            A nice fat gap down would put the cat amongst them a bit. No reason to short for it though that I can see.
            Good one on the S&P Nick.

      2. Really not getting it today, back from hol for a week and feeling stale already. 🙁
        But long at 96, more at 90 and 84 stop 78, purely for a bit of divviness.

        1. I’m in at 00, will add at 90 to join you. Will stop at 80 which equals half my wedge from today.
          In contrast, I’ve quite enjoyed this week so far but am having a very long weekend this weekend.

      1. No, I hate everything to do with Microsoft but Chrome went MIA for me earlier and they’re the only two browsers I have on this social computer.
        Firefox and Linux is good.

          1. I used it for a time a while back but it got bloated. I like Chrome’s simplicity but the ongoing problem with Flash Player is a pita.

            Catch you tmrw chaps!

  24. HI,

    I am long on IG from 301, but it is the first time I have been on a divi day, am I best in waiting until after 4.30 to close or before the market shuts? I don’t reall understand how it affects my position, does the market automatically drop by 8 points at 4.30 or am I misunderstanding it?

  26. Hi – I’m just finished reading this FDA medical report.
    Apparently, There is more money being spent on breast implants and Viagra today than on Alzheimer’s research. This means that by 2040, there should be a large elderly population with perky Boobs and huge erections and absolutely no recollection of what to do with them.
    Interesting read…:-)

Comments are closed.