Asia builds on US rally 6120 support 6210 resistance

Support 6150 6126 6117 6074
Resistance 6163 6185 6211 6254
Good morning. The FTSE can be annoying sometimes can’t it! Short got stopped then it dropped, long got stopped then it bounced. Stops are a pain sometimes…. however the Dax trade worked well so some decent points there instead. Annoying really as it did play out as per the arrows, just overshot my levels a bit. That’s trading! We have dropped off again overnight from the 6168 level which hit yesterday evening and again in the small hours and holding around the 6150 pivot area as I write this. That said, with the climb yesterday and the slow reaction at the 6166 early in the day, it feel like we might push up a bit higher to test the 6211 area, possibly 6254.

US & Asia Overnight from Bloomberg
Shares of Asian raw-materials producers rallied for a second day, extending their rebound from a one-month low as metals prices climbed and the greenback weakened. Crude oil fell toward $44 a barrel and New Zealand’s dollar led gains among major currencies.

More stocks rose than fell on the MSCI Asia Pacific Index, which snapped a six-day losing streak on Tuesday. Australia’s benchmark climbed to a nine-month high as BHP Billiton Ltd. gained more than 3 percent. S&P 500 futures declined following the gauge’s strongest rally in two months. Crude retreated in New York ahead of American inventories data, while copper advanced with gold. The Kiwi rose from near its weakest level since March as a central bank report damped speculation interest rates will be cut. The yen strengthened following its biggest two-day drop since January.

Global equities show signs of stabilizing after a selloff last week that erased more than $1 trillion of value. This month’s data out of the world’s biggest economies suggest global growth is subdued, pushing out expectations for the Federal Reserve’s next interest-rate increase. Chinese inflation figures gave a modest lift to investor sentiment on Tuesday, showing that declines in factory-gate prices moderated in April.

“We’re seeing follow-through buying given the bounce in commodities and rally in U.S. shares,” said Chris Green, director of economics and strategy at First NZ Capital Group Ltd. in Auckland. “Prospects of a delay in the Fed raising interest rates and firmer inflation data out of China are supportive of equities in the near term.”

Asian companies including Toyota Motor Corp., Bridgestone Corp. and Hong Kong Exchanges & Clearing Ltd. report earnings Wednesday. Thailand will review interest rates, with all 21 analysts in a Bloomberg survey predicting no change, and the U.K. has industrial output figures due.

Stocks
Seven out 10 industry groups on the MSCI Asia Pacific Index advanced as of 12:38 p.m. Tokyo time, with telecoms and raw-materials producers leading the way. Australia’s S&P/ASX 200 Index was up 0.6 percent, rallying with benchmarks in Shanghai and Tokyo. Hong Kong’s Hang Seng Index sank to a two-month low.

BHP Billiton, the world’s biggest mining company, climbed by the most in three weeks. Toyota gained for a fourth day before it reports on full-year earnings and Sumitomo Heavy Industries Ltd. jumped as much as 14 percent after posting profit that beat estimates. A Tokyo-listed exchange-trade fund that tracks Brazilian shares climbed more than 4 percent before the Latin American country’s Senate votes Wednesday on whether to impeach President Dilma Rousseff.

Futures on the S&P 500 Index fell 0.1 percent, after the benchmark rose 1.3 percent on Tuesday.

Currencies
The Kiwi strengthened 0.6 percent to 68.02 U.S. cents after the Reserve Bank of New Zealand said it was only at the assessment stage in considering further macro-prudential controls to help curb the nation’s booming housing market. The lack of progress in introducing measures targeted at home prices damped speculation interest rates will be cut, according to Sam Tuck, a currency strategist at ANZ Bank New Zealand in Auckland.

The yen climbed 0.4 percent to 108.84 per dollar, after sliding more than 2 percent over the last two days. The currency has gained more than 10 percent this year, making it harder for the Bank of Japan to achieve its inflation goal, and Finance Minister Taro Aso reiterated Tuesday that the government can intervene to stabilize the exchange rate if necessary.

The Bloomberg Dollar Spot Index, which tracks the greenback against 10 major peers, fell for a second day. The gauge had its strongest rally in almost a year in the five days through Monday.

Commodities
West Texas Intermediate crude fell 0.5 percent, after climbing 2.8 percent in the last session. Concern over supply disruptions in Nigeria and Libya, holders of Africa’s largest oil reserves, drove Tuesday’s gains, though this was countered by expectations that U.S. data on Wednesday will show American stockpiles expanded from the highest level since 1929.

Copper, Aluminum and nickel rose by about 0.7 percent in London. The London Metal Exchange’s LMEX Index of six industrial metals closed at a one-month low on Tuesday. Gold rose 0.3 percent, buoyed by the dollar’s retreat.

Soybeans rose 0.5 percent, building on the last session’s 5.6 percent surge. The U.S. Department of Agriculture forecast on Tuesday that world soybean inventories will fall 8.1 percent by September 2017, and Brazil — the top exporter — cut its outlook for the country’s current crop after drought conditions hurt production.

Bonds
U.S. Treasuries due in a decade yielded 1.75 percent, near a one-month low. Odds on the Fed raising key rates at its next meeting in June have dropped to 4 percent, from 17 percent a week ago, before weaker-than-projected U.S. payrolls data undermined perceptions of the economy’s strength. A report on retail sales is due Friday, along with an update on producer prices.

The New Zealand central bank’s lack of initiatives for the housing market dealt a blow to the country’s government bonds, with 10-year yields rising three basis points to 2.65 percent.

In Japan, 10-year yields were little changed at minus 0.1 percent. A year after the so-called German bund tantrum, which erased more than $750 million in value from the global government debt market, Goldman Sachs Group Inc. is predicting Japan will be a potential source for the next international bond selloff.

“A convincingly large and effective fiscal expansion in Japan accommodated by further BOJ easing could be enough to turn market dynamics around, and have international ramifications,” Francesco Garzarelli, co-head of global macro and markets research at Goldman Sachs in London. “Global bonds would sell off in sympathy.” [Bloomberg]

FTSE 100 Outlook and Prediction

FTSE 100 Prediction
FTSE 100 Prediction

The two main levels I am looking at today at support at the 6120 area and resistance at the 6210 area. We have a 7 point dividend today as well, so that will effect open positions at the bell (4:30 on IG, 9pm on others, only on the daily bets though). 7 points might be enough to see some divi hunters come in buying at 4pm’ish for a rise towards the bell so it can be worth a speculative long around then. Looking at the 30minute chart I am expecting a dip initially, as we are also below the pivot at 6150 which is acting as resistance to start things off today. A dip down to S1 and the green coral line on the 2hr at 6117 looks possible. If that holds then the bulls might start some buying there for a push back to 6185, and maybe even the 6211 area. We are at the top of the 10 day Bianca and Raff channels at 6165/75 area which is why the FTSE is struggling a bit to push past these levels over the past 24 hours. Likewise, the Dax is just at the top of the 10 day Raff and Bianca so it will be interesting to see if the bulls can hold 10000 and push past 10080. So, dip and rise is what I am thinking today.

152 Comments

  2. Morning all,poor old Disney last night lol,Gb Ind prod at 09.30 probably be less productive than the Mouse though.

      1. just saw your Ftse longs on yesterday,nice.
        1 min Ftse has a bit of a Megaphone going on,I remember Jack writing about that pattern in the past,thought I’d look it up on Bulkowski for his stats,so here is the link for anyone else who was wondering.
        http://thepatternsite.com/bt.html

          1. I’m looking at this megaphone pattern and it’s talking about how to trade it…….I can’t help thinking…….is it making it all abit too complicated ? I’m very much in favour of the KISS principle but I’ll keep reading about it and try and see if it actually works …..sometimes I think we make it too difficult for ourselves.

        2. Morning WSF.
          Thomas Bulkowski……another legend in his own estimation, sorry meant time.
          Fav quote:
          “holding on to a stock during a bear market can mean a substantial decline in net worth.”
          I’m just mentally incapable of processing that amount of data, there’s prob a Bulkometer program whirring away on some red braces computer somewhere, making a fortune.

          1. Morning,welcome back, I like his stats on failure rates,think they are worth looking at for anyone trading off patterns..Heard a guy talking about S/L’s with scalping the other day,S&P futures with the S/L as an average of the last 6 bars and half off at a profit equal to half the S/L space I think.dont often come across discussions on scalping.

  3. Hello all.
    Looks like yesterday’s cash resistance at 58/60 is still good, support around Nick’s area, I reckon 6116 to be precise, and the DAX expected to hold around 9950.
    More FTSE resistance at 78, 92 and 212 for me.
    136 and 9980 holding for the time being but look vulnerable.
    And that’s about it.

  4. Morning all, out of my difference short at 76 for +20. Don’t know how it happened though, got hit on a limit but can’t see it getting there on the chart thing.
    Anstel, I saw your post yesterday evening, good work mate. I was going to post a long diatribe this morning but I see you’ve alread sharpened your pencil! That said, look at what you did well yesterday – out at the top, look what didn’t go so well – bought too many too high. Good luck today!

    1. Yeah thanks chippy I did buy too high on Monday……..thanks to tmfp and WSF I’m starting to play with Fibonacci abit more…I need to buy it cheaper…My main area though is I need to be more agile and flexible in this market…..Swing trades are difficult so I’m trying shorter term stuff as well…..take the money is finally sinking in…thanks mate….Something very interesting I’ve discovered too…..as you all know I like very wide stops…….as it goes against my position I have to control my emotions…..we all do…..I can take the emotional stuff pretty well but what I’ve discovered is when you get into a decent profit because I’ve controlled the emotional side of my brain that much it seems to mess up the reasoning side of it …..very interesting to monitor how we feel and react in a trade…..I think it’s very significant…..still working on it…..Good Luck all.

      1. Good to see you getting some blue ink young man.
        Wide stops? Yeah fair enough, but remember R/R, running most of a say 60 point stop to take 30 will end in tears one day. It is not a habit to get into.
        We are in a ranging/bull market right now, so poor accumulated long entries can be recovered with patience, but ready for the day when we break out.
        GL as ever.

        Pretty tedious at the mo, still holding a bit of short from 56, stop 46, may add on a break of 28/970.

        1. Thanks tmfp…….I’m trying all sorts of approaches……I think I’m on to something with this psychology stuff though…..dare I say it but I think it could help you with this getting out too early habit…..it’s a fear of loss thing I think….have a look at Randes videos….I’m sure you will find one that you will think ah ha yes that’s me….that would help…..hope you don’t mind a trading novice suggesting it but I think its powerful stuff…..Good Luck matey.

          1. Old dog, new tricks anstel, but thanks.

            I moan about it but tbh, it’s the entry that I’m most interested in as a challenge (Freudian or what?), profit taking is almost incidental.

  5. Submitted a bit early!
    Meant to say I’d like to see FTSE down to the teens before I start buying again. After that effort by dow last night I think we may get a bit of backtracking. All flat at the moment – apart some fantastically good value bank shares….!

    1. Well, that window closed, bored now, all square on that for a handful, off into the real world for a stroll.

  7. Morning all…
    Damn its slowwwwww today. Volume going to zero?
    Seems to be grinding up a channel at the moment 1,2,3 min.
    Perhaps short at 55.

    2. Dow volume yesterday is interesting,if Yahoo have got the number right it was the lowest it’s been in quite a while.

          1. No,that opportunity was down to me not being here.My analysis of Sod’s law clearly shows that markets work on Sod cycles 🙂

          2. Yeah the secret to trading is Sod’s law …….and the technical side is Murphy’s law.if it’s gone up its probably goin to go down a bit later :0)

  8. As soon as I settled down on the decision to go short, I see a huge arrow up? How come if everything points out for more short?

      2. If you’re short at 76 Jack, hold it with break even stop, I have the completely unscientific opinion that 9950 will be tested again before the DOW opens, maybe attempt a bounce off 60 now and fail.
        Good luck.

  9. A very pleasant stroll and back to one point away from two hours ago. About as much use to a scalper as a chocolate teapot.
    So boring in fact, that I’ve had my daily Zerohedge fix a bit early, naughty really, like drinking before the sun goes down.
    Here you go anstel, another Mr. P type conspiracy theory for you
    https://www.sprottmoney.com/blog/proof-that-the-top-01-create-crashes-jeff-nielson.html
    Sprottmoney lol, sounds like a new cryptocurrency.
    Talking of which I bought moar on the dip in Bitcoins, looking for new highs in the next 6 weeks. See, I can long term trade.

    No idea what the DOW’s going to make of this, nothing as usual I expect, slap bang in the middle of its nearly month long range. As we are daily, 30/60.
    DAX quietly turning to mush in the background, I suppose the Powerhouse of Europe is still bullish while 9950 holds.

    1. Dow is actually looking bullish for me. FTSE is pretty much flat and could suprise. But Dax looks bearish. So I will not rush and see if Nick’s long arrow will come to life and wait for set ups.

        1. No mate, you’ve got it all wrong, summer is great – the pub moves outside and its like the old days, beer and fags, a match both made in heaven and made for champions.

  11. Been outside all morning but did slip a cheeky short on the FTSE/Dow difference whilst I was wandering about at 11,703. Come back at least an hour and a half later and it hasn’t really changed, normally expect at least a 50 point fly about!
    Anyway, DOW opening I think will be very interesting, more especially for what effect they have on FTSE. See you later, off out again.

    1. I hope you’re right re v interesting, I have a feeling it will be more tedium.
      Will look for 900 more than 8 I think, may drag us though 60, but you don’t really want that.

  12. Hey WSF…we never got to the bottom of whether chippy was a town hall clerk or a soldier…..or retired soldier…..all we know is he’s not a carpenter….????

  13. What’s the matter? Why does it have to be so weird? 7 points grabbed on Dax, now not sure what’s happening.

  14. I reckon this is just BS I still think it’s goin up but it will unnerve people.

          2. Hold on Jack feel the emotions…..it puts us in flight or flight mode…….but probability would suggest it’s a good chance of going up…

  15. I think we’re in danger of getting a bit institutionalised with this narrow range, wetting ourselves over a 30 pt move on the DOW…remember the good old days, 200 down, 200 up in an hour?

      1. rsi out at 42 for 8 no point in looking for straight lines in this market, shorting again around 50

      2. 14.35 ? body is a bit wide,less space between open and close would be better,but it was an Evening Star,setting up that further fall after the red Candle that followed it.need a close above it to go up lol,6160,but we knew that anyway.
        Was just looking at Ftse day chart,flat from here for a bit, repeating march would be setting up a Head and Shoulders,but I still think we are due more upside from your Ftse Golden Cross.

          1. Sorry WSF….where’s this golden cross on Ftse charts…I can’t find it…..it was last Friday I last mentioned a golden cross on the 10 min Dow when I shorted it last thing?

        2. No it was 15.05 on the 5 min Ftse……I don’t even know if you can get a morning star on the 5 min……does it have to be on the daily chart? Blimey there’s lots of candlestick formations and shapes in this dictionary of candlesticks I’m reading…..anyway more importantly…..Is it goin up yet ? :0)

    2. lol, if you want it to be it is.
      It’s actually the fourth or fifth time we have bounced off that area today, so a quintuple bottom if you like. Sounds bullish :).
      Re measuring bounces, 60 down to 32 = 28, 61.8% of means 49 resistance, a good area to dump a bargain buy, just like I’m doing now for +13.
      lol and looking like too early again, but a short waiting.

  18. Just closed difference trade at 11683 for +20.
    chippy guessing game – it is far more obscure than all of the above!

        1. What about a ……..croupier ……chippy likes all these obscure trades?………that’s why he’s called chippy…..because of all the chips :0) yeah that’s it :0) it would fit in with a love of beer too….

      1. I was out, could not react, I would have closed if I was here, but school is school. So still holding but I don’t think it will win anything.

          1. Don’t worry…all that positive momentum is still here hiding….put a stop on it if you are worried and then just hold it for your 100 pts…..be really good for your confidence.

          2. Hey jack…if you put your chart on a bigger timeframe it doesn’t look as scary…..

    2. and more at 72, will be interesting to see if it holds this rally, naturally for me it goes in the BS bin.
      But I’ll take half out at 60 for luck, seeing as we finally broke out, could well hold

      2. At last something interesting hurrah
        Especially so considering the time and an 8 pt divi, I guess a BTD is in order

          1. all out of short now at 46, tyvm oil
            nearly long time for a closing bounce maybe, DOW probably hold 800, quite oversold

  21. Looking at the 4 hourly Ftse with my very agricultural chart knowledge it looks to me like Ftse 6190 – 6200 is doable when the Dow gets its act together……

    1. anstel, change the record 🙂
      If I wanted a talking book there’s always a wide selection on Amazon 😉

        1. Seriously though, a close over 60 and no overnight surprises from anyone, could see that sort of area tomorrow, no sweat.

          1. Sorry tmfp if I was getting a little over enthusiastic …Its funny how when you have a little bit of success it encourages you a bit….I’m trying to be the same win or lose but it’s hard to maintain a balanced composure…also that’s when I get a good hiding through overconfidence so I’m aware of my weakness…..good luck matey.

  22. Yep, that’s how they closed me. So the old saying, take while you can is the best still.

    1. Basically this only proves that it’s better to take small profits. Still up today, but very disappointed. Again, went to the kitchen, dinner is in tatters. Don’t think I’m ready for holding yet.

      1. I know jack….maybe if I could suggest that if you get a position…a small one on Dax because Dax is very dangerous as you know but if you get a small position in profit put a stop on it so you don’t lose any starting capital and then just try and leave it…some will get stopped out for sure but you won’t loose any of your original account….sooner or later you will get a run up of 50 > 100 pts and you can leave it if you need to go out knowing you can’t lose anything.

        1. anstel, while I was working my emotions settled down (on a break now). Yes, I got too emotional on this trade although for a change it was a winning one. I imagined the skies, no good. But what surprised me that I was even more upset than if I would have lost the trade. That’s weird.
          If my common sence was alert I would have looked at some indicators which suggested me to get out earlier. But you have to be tough to be able to fight again. Yes, lovely to win, or not to win anything but I gave myself a chance. At least I didn’t lose (I gained only 15 points today) and I think it’s more important.
          I think Greed revealed itself to me first time today. Now I know what other people meant about it.
          (Had a revenge long 9965 just to gain 6 points when it closed and no more trades today)
          But I think you are still right. I was thinking, gosh, this will put me off trying to hold again. But now I think: I’ll keep trying. One day it will go.

          1. Once we realise,,,,that even with all the best technical knowledge, charts , fundamentals backing up your trade etc etc….that anything can happen…..we have no control whatsoever over what the market does…then we realise the only thing we can control is execution and emotional regulation….I have discovered that when we try to control the emotional side of trading,the reasoning side goes out of the window….I couldn’t understand it till I discovered both sides of our brains work together so if you try to control one side ….emotions…..it messes up the other side ….reason…we have to look deep inside ourselves to find out what’s stopping us from achieving success……have a look at Rande Howells videos on you tube…..he is a trading pschycologist ….it’s takes a lot of time but I think it could help you….very best of luck….

  23. Bought the poxy dip, 6149, no justification just fancied a gamble OR I’d carefully researched the stokeitup, emu etc etc and fancied a bit of divi.

    1. Good long there mate, should be worth best part of +20 on the bell. I missed it, was too busy telling myself how clever I was with the Big Oil Short.

  25. Just a couple of parting thoughts, the DOW really wants to hold 17800 into the close, any lower than that would be a p*ss poor performance given those oil stats and general supposed bullishness.
    The FTSE’s held up well today but if the above does happen, then not clearing 60 properly could be a bit of a damper first thing.
    The DAX? So it held 9950, that’s about it.

    IF the DOW closes 860+ then it’s up to Europe to push on and the ftse get near 200 in the morning.

    Have a good evening all.

    1. To follow that, from a Bulls point of view, I think it will hold the 800 but it will be a “fake” hold. I’ve been bullish for a while now but am now thinking that the buyable dips need to be down near the 100 level and that it actually feels more fragile here at 60-ish. So, ignoring the “what is in front of you” advice my new plan for the next few days is basically to sit on my hands but if there are any quick charges I’ll be looking to scalping shorts and if it gets to 100 or thereabouts start building a swinger’s long.
      Sun is shining, pub has a garden and serves beer, guess where I’m going.

  26. Kind of around mondays cash high be a good place to turn,20 odd minutes of implying that now though,so might be too good to be true.

  28. I think my original thought about a short this morning was correct (post at 12.43). All it was a retrace.
    At least it didn’t go up otherwise it would be more frustrating to me. When the price dropped to 9955 it looked like a rejection.

    1. I think the Dow might turn in the 720’s now,S1 was 791 S2 is 655,lots of room, but it has turned at the 50 sma a few times and I think it will today,if not then US retail sales on Friday 13th will be fun.

  29. All very clever this drop…….gets everyone thinking short short……I’m not buying the BS when everyone goes short it will bounce….I think we have to be very aware that as it drops others are thinking that’s cheap and are waiting to buy.

  30. Funnily enough anstel I did think that around 6100 was going to be the bottom of the trackback from 6400 but I’m not sure now. Just to put my money where my mouth is cheeky little short at 6140.
    For me, the bears are getting filled in and I think I’d be early to start the ‘swinging’ at 6100!! Good luck mate

    1. Yeah it’s dropped from 70 ish to 30 ish………didn’t think it would drop that much but I wanted the divi because I have some size on and at City you have to hold it till after 12.00 midnight I think…..in hindsight I should have sold at 70 and bought it back now…..oh well….win some you lose some.good luck chippy……it’s hovering around my three lowest positions at the moment….

  31. Hello chaps, just thought I’d check out the night shift.
    The thing is with that reasoning anstel, is yeah, people are always waiting to buy when they think it’s cheap/good value. But, when you have rallies failing and new lows being made, then they adjust their idea of what is cheap downwards.

    Will be interesting to see how the Asians react to this DOW, and even more interesting to see how much resilience the ftse has in it tomorrow. It’s been trying to get a rally to stick for three weeks now. Take out the tail and we are 30 off the lows and 300 off the highs.
    Tonight might just knock the stuffing out of it. But I would say that, wouldn’t I?

    1. Hiya tmfp…..feeling a bit daft for not taking 70 but hey hindsight is 20/20…I’m still breathing….and at least I get a nice dividend :0)

      1. I think it’s a bluff job anyway in preparation for some rises and if it’s killed confidence less people will stick their neck out going long….so less people make money on the rise…..”they don’t want anyone making a few quid”. but I still reckon “they ” want it up. …….they don’t like it up em Pike :0)

    2. Evening Tmfp,on the other hand it was falling for 5hrs and only managed 150 points,so still early days.

      1. Hiya WSF.
        Sure, nothing broke yet, just looking at short term it’s poor action, esp with the way that oil spike disintegrated.
        If tomorrow holds 6100 is the key for me, if it doesn’t then major major 17500 support is only a throw away and the DAX wouldn’t even bear thinking about if it revisits that supporting trendline and doesn’t bounce.
        But I’m sure it will be fine Ted….

        1. 🙂 Friday the 13th and US retail numbers looming ,they will just have to save Greece again or burn some more Oil fields.

        2. Have a look at ZH, the retail sector today was shocking.
          Reinforcing your observation about volume, Tyler describes yesterday as “senseless uncorrelated low volume rallies”.

          “S&P Retail Sector’s worst day since Aug 2011” doesn’t bode well for tmrw’s figures.

  32. what a different a day makes, the Dow has only really dropped what it was up yesterday, just like the yanks all or nothing.

  33. Just to add, 6160 seems to be pretty tough to break, so 20 point downside, support at 6100 ish but it flashed through that the other day so 40 point up side, 2-1 bet!

  34. retail was down and its the end of the world huh think most people know that everything slowing down, seem like most have nothing in the bank and maxed their credit cards out welcome to QE and super low interest rates a disaster waiting to happen, but don’t think we are finished yet not enough sucker in on this bull market yet.

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