Bears appear FTSE to 6300 soon? Asia down Friday and earning disappoint

Support 6369 6333 6288 6261 6207
Resistance 6366 6370 6400 6409
Good morning. The bears finally stuck their heads above the parapet yesterday and brought the Dax down from that 10500 20 day Raff channel area, and the FTSE from the 6430 resistance that had formed a double top. Asia had a weak Friday session, while in US earnings season Alphabet, Sony and Microsoft reported earnings missed estimates.

US & Asia Overnight from Bloomberg

  • Microsoft, Alphabet, Sony profits fall short of estimates
  • Shanghai Composite set for biggest weekly drop since January

Asian stocks retreated from a four-month high as the yen held gains and companies including Sony Corp. and Microsoft Corp. reported earnings missed estimates. Crude oil resumed its advance.

Raw-materials producers led declines on the MSCI Asia Pacific Index after commodities prices lost ground on Thursday. Japan’s Topix Index fell from its highest level in more than two months, while the Shanghai Composite Index was headed for its steepest weekly loss since January. Australia’s dollar led gains among the currencies of resource-exporting nations as U.S. crude rose toward $44 a barrel. South Korea’s won was the biggest loser.

U.S. corporate results for the first quarter have mostly beaten projections so far, helping drive an equity rally that this week pushed a gauge of global shares to the highest level since early December. Google parent Alphabet Inc. and Microsoft on Thursday dimmed the picture somewhat as their earnings fell short of analysts’ forecasts, while Sony announced an annual profit that was 9 percent lower than it predicted in January. Rallies in haven assets including precious metals and the yen are a sign investor sentiment remains cautious.
“There’s been scant evidence of sustained earnings growth,” said Matthew Sherwood, head of investment strategy at Perpetual Ltd. in Sydney, which manages about $21 billion. “It’s too soon to declare that the earnings recession is over in all regions — things look better in the U.S., but central-bank policy in Europe and Japan appears increasingly deflationary and the prospect for strong economic recovery in emerging markets is still hard to fathom.”

McDonald’s Corp., General Electric Co. and Caterpillar Inc. are among firms scheduled to report earnings on Friday. The European Central Bank on Thursday refrained from adding to the unprecedented stimulus announced in March, while 23 of 41 economists surveyed by Bloomberg predict that the Bank of Japan will ease at a review next week. Traders see zero chance of the Federal Reserve adding to December’s interest-rate increase at a meeting that concludes on Wednesday, Fed Funds futures show.

Stocks
The MSCI Asia Pacific Index fell 0.4 percent, paring its weekly gain to 1 percent, as of 11:53 a.m. Tokyo time. The Topix declined 0.2 percent, Australia’s S&P/ASX 200 Index slipped 0.5 percent and Hong Kong’s Hang Seng Index lost 0.8 percent. The Shanghai Composite Index was down more than 4 percent for the week, reflecting concernthat improving economic data will prevent further stimulus and corporate defaults will rise.

Sony slumped 2.9 percent after the company scaled back expected demand for the sensors and lenses that go into cameras as well as smartphones. The company is assessing the impact of this month’s earthquake in Japan for earnings in the current year. Microsoft and Alphabet declined in after-hours U.S. trading.

Futures on the Standard & Poor’s 500 Index were little changed after the benchmark dropped by the most in two weeks. Contracts on the U.K.’s FTSE 100 Index dropped 0.5 percent.

Currencies
The euro rose 0.1 percent to $1.1302. It jumped as much as 0.9 percent in the last session and subsequently erased the gain as the ECB’s policy statement and President Mario Draghi’s news conference struggled to convince investors that unprecedented stimulus will jump-start growth in the region after years of failing to do so.

The yen was little changed at 109.46 per dollar, after strengthening 0.4 percent on Thursday. Bullish bets on the currency by hedge funds and other large speculators exceeded those benefiting from losses by 66,190 contracts in the week ended April 12, the most in data going back to 1992, according to the Commodity Futures Trading Commission in Washington.

The Aussie climbed 0.3 percent, after dropping 0.7 percent in the last session, and the Canadian dollar gained by a similar amount. South Korea’s won fell 0.6 percent, halving this week’s advance.

Commodities
Oil rose 1.2 percent to $43.71 a barrel, after falling Thursday from the highest level in almost five months amid rising U.S. crude stockpiles and speculation producers will be unable to agree on an output freeze. It’s risen in all but one of the past 10 weeks, including an 8.3 percent jump over the past five days.

Gold was headed for a 1.3 percent weekly gain, while silver climbed to an 11-month high. The latter jumped more than 5 percent for the second week in a row, entering a bull market.

Bonds
The yield on 10-year U.S. Treasuries fell one basis point to 1.85 percent, still 10 basis points higher than at the end of last week. The yield on similar-maturity Australian government debt increased on Friday by three basis points to 2.62 percent.

The yield on Japan’s 40-year bonds fell to a record 0.27 percent. [Bloomberg]

FTSE 100 Outlook and Prediction

FTSE 100 Prediction
FTSE 100 Prediction

With the drop off from 6430 I am feeling that things are weakening a little bit now, and we could be back on for 6300 and possibly lower soon. If we get an early morning rise towards 6400 then its worth a short around this level as the 2 hour chart is bearish after yesterdays declines, with a couple of resistance levels at 6400. On the 30min chart we have 6360 and 6370 as the first hurdles for the bulls to jump which are the coral and pivot lines respectively. A good level to fade in shorts if so inclined. Bear in mind its also a Friday so reduced stakes are a good idea. The 10min chart is showing early support at the 6350 level which is why i think we might get an early rise, but shorting the rallies feels the best plan for today.

164 Comments

  1. Note to city users……..Ftse chart is showing a high of 6391…….to the best of my knowledge that’s incorrect…..I haven’t seen it above 6370 since last night

  3. Morning all……tmfp do you think the Dax is getting Ftse customers due to the euro losing value against the dollar?

    1. FX rates obviously make a difference and big investors factor them in to their calcs, so a yes I guess.
      The problem with attempting to allow for factors like these in our trading is that its just another variable being introduced. Unless you’re running custom software it’s just information overload.
      I said the other day I trade in a bubble. Not because I don’t think that news, FX, interest rates, stats et al affect our prices, just that I have no means of quantifying their effect on the numbers on our screen, so I effectively ignore them.
      I’m not an investor, I have no interest in what the price will be in one month, one year, ten years, I just trade the candles in front of me for ten hours then turn the computers off.
      You are in danger of falling between two stools, or whatever the expression is.
      Either trade long term or intraday, very few people can do either successfully, let alone both, they are completely different approaches.

      1. Thanks tmfp all noted….I don’t think I’ve quite found my niche yet……I know that strong volatility is difficult for me…..although I have improved slightly I think…..Good luck today and thanks for you overview on my question…..

  4. Morning all (three of you).
    Probably a ranging morning after yesterday’s minor reality check for the bulls, I reckon.
    If this bit of early positive DAX wears off, we could see a visit to the 20’s.
    Currently short and holding for a while at 51.

    Re: yesterday’s close. A great bit of scalping action which I missed because domestic harassment.
    That purely local short covering rally on the FTSE to 90+ was a nailed on sell: always watch the DOW in those last 15 minutes after a day like yesterday, to see if the FTSE move is local or general. DOW barely moved while we put on ~20 points, which we gave back immediately after the bell.

    Here we go?….

    1. Morning Senu, a reprise of yesterday so far isn’t it?
      I’ve got two FTSE uptrend lines on the 4 hour, we’re through the first one at 55, second one kicks in around 6300 by which time we’ll be a bit oversold, but I’d be mildly surprised if we get there this morning.
      Thinking about adding to short around here at 38 and stopping at b/e av 45 but in no rush.

      1. Yes, I tagged 41 in the end, no heroics though, taking modest blue when it shows, stop at b/e av 46.

    3. Think we are just looking at a bit of consolidation after the last couple of weeks with better R/R in the Dax than FTSE and something Bullish about Greece about to come out of the Finance Minister Meeting,probably on Twitter lol.Dax close in the 400’s and Dow + 18k is my guess.

      1. My thinking is the same as yours WSF although at the moment I think we are in the minority….it’s facinating to me this market….we are all just trading human emotion with the odd trip to the betting shop with Mr P.

        1. Full disclosure,I do Neck bridging on a Friday and all that extra blood to the brain probably has an effect.

          1. Maybe if you where looking at the charts the right way up on Fridays as well as the rest of the week you might be 20% more profitable……… any things worth a go in this game :0) anyway trained MMA assassin in the house so I’ll shut up…..might live longer :0)

          3. Looks like a pair of……yeah the blood does go to your head….I’ll stick to sitting upright I think….much more comfortable….strange market in my eyes Dow still hovering just shy of 18k…Dax still close to 400 but Ftse has thrown a fit and dropped to 6310….. Don’t get it to be honest…

          4. Have a look at the 4 hr Ftse…..do you think 10 ish is the bottom…..it’s just about the top of that previous low green candle..

          5. Ftse seems out of sync with the other two…..I can’t see The Dax dropping or the Dow TBH but if they do Ftse is going south…..I still think it’s on an upward mission and this is like you said consolidation.

          6. The lull before the storm……but which way is the wind coming from and how much emphasis do you put on the Dow weekly.

          7. 4hr Dow and Dax still look like an uptrend to me and FTSE looks like it has broken below its trend,maybe Obama banging on about brexit has reminded people they dont need the uncertainty.Ftse is 10 points below where it was at 10 and Dax is 60 points above where it was,Dow is 40 points higher Australia is 10 or 11 higher,so at the moment it seems like a FTSE issue not a big picture thing.Probably more likely to move in sync with the others and do well if the others turn down.Oil is below 7am but off its lows.

          8. Thanks very much WSF..that double bottom on the Dow suggests a climb up but you really have to detach from reality to consider it possible….The Way the Dax has held up inspires confidence though….this is where the emotional regulation comes in…

  6. Morning All, cold isn’t it?! Managed to catch a short at 51 first thing this morning, and added at 38. Looking for 6310-ish.

          2. Tried to post a picture of wallace dressed as Steve Mcqueen in the great escape but cant copy the image so its back to sitting on hands time…..:0)

          3. Sidecars are great fun, every family had a bike and huge sidecar in the 50’s before cars everywhere.
            I like white lining though (not Charles) and they’re not very good for that.

          4. There is a video on YT with Guy Martin in a sidecar with a leather helmet and googles….looks like fun….id love to try it for a laugh…..:0)

        1. I have to go out and do my Friday duties so taken out half the short at 19 leaving the rest stop 32 limit 12. A Nice Morning.
          Good luck all, hopefully back for DOW.

          1. Cheers tmfp,be careful in Pubs and Fish and Chip shops,Obama and Cameron are out prowling for photo Op’s.

  10. Sensible head says continue to short cover into this weakness, a Friday rout possible but unlikely. 6300 would be a bit too neat, but I can’t see anything between here and 10220 on the DAX.

        2. Seems like a Binary on whether the U.S wants to end the week with a Fri rally to close above 18k after yesterdays minor down day,i reckon there is a good chance of that even if the move isnt much of one.

        1. Have a look at that video I posted yday for tmfps thought….or it may have been day before….plus I’m looking longer term…….I think it’s more my style.

          4. All that strong buying from 2 days ago must be lurking somewhere….you got fight it sometimes…

          5. Oh Ok got you,I do that,put a stop on and then get religious about not moving it or closing the trade,been thinking that the times it just misses are probably outnumbered by the times I’d save money by tightening the stop when I think the mkt is heading to it.

          6. The way I look at it …..but only when it seems there’s some stability about…not like February….is this …as its dropping towards your stop and hitting it …..other traders are thinking that cheap I’ll have a bit of that……so more often than not it closers you and if your long they all bug…..just like now it’s jumped 10…its a bloody battle…no room for faint hearts…bring it on…..

          7. Yeah,taking the hit before the stop probably makes more sense as a rule running counter trend trades.I’ll try it for a bit,but i dont do too many,so might take a while to notice.

      2. it all starts with dow 1pp or FTSE 2pp, with no stop, I keep averaging/moving stops until it finishes me off. I wish I had learnt it now.

      1. Wish I was as sensible as you Senu…..well just a bit more risk on than you and a bit more risk off than me…..

        1. Dax can pay for it if it goes pear shaped unless that drops 400 out of the blue of course…

        1. No no I’m sharp as a bloody pin……when im getting a kicking…..it’s when I’m relaxed and posting funny comments on here I have to watch it.condition red all guns armed now….

        1. It plays tricks on us…..we think…oh it’s dropping doom and gloom doom and gloom…..then when its firmly become a state of mind that its weak it flips and bites you….let’s bite back for a change.

          2. Firstly it’s not if we solve it…..its when…..and secondly I think if we bought tmfp one of those he would probably search us down for the rest of our days and when he finds us rip us apart limb from limb saying……after all the help ive given you two and that’s how you repay me….then he’d stuff about 2 grand of tenners down our throat from the previous day’s trading and say have it !

          5. I’ve driven an Austin Ambassador recently, a friend owns a campsite and uses a completely rusted out one to tow the bin trailer.
            British manufacturing at its finest lol.
            I like old American muscle cars but we’ve got some piece of disposable Eurocrap for day to day stuff, 60mpg £20 tax, does the job.
            Shuttleworth, funny guy.

  17. Hello all, back again 🙂 A bit pissed about being stopped out, was going to leave 42 on it too 🙁
    Anyway, the expected happened, don’t see a huge amount to go for now at 12 either way, not much left in it today. Maybe be worth a little short.
    DOW doesn’t seem remotely perturbed although just slightly showing signs of drifting down under 18k.
    And as I type…. 🙂

      1. I suppose that much talked about short interest might be tempted into a bit of pre weekend covering, a little long at 91 for interests sake 8 pt stop.

          3. Yes, I think you’re right mate. Should’ve risked a prev low -5 stop.
            Still looking at nearly 100 down close, not too inspiring.
            Next Wednesday at 6800, we’ll be looking back saying “BTD, told you so” 🙂

            Very tempted to short at 98, must resist lol.

          6. lol, yeah Senu, I love those little threading the needle type in and outs near the close but my original thought was the right one, just a bit of short covering in a thin market.
            All to play for on Monday, usually a bull day recently, if they can drag it up to around 6350 will be interesting to see what happens.
            Assuming the DOW doesn’t go mental tonight of course, looks unlikely.
            Cheers.

        1. Hi Senu I’m still holding at the moment but I may have to lighten my load for weekend…..I need a good nights sleep and i don’t like holding risk over weekend in case of black swans and it gaps down…..normal stops don’t help either…… Want to try and hold my Dax but my Ftse could hurt me so risk off later….

          5. Dow went up 18 points when they went off stage,hopefully this is the 3rd higher low on the 5 min now and it’ll lead to a higher high,still thinking + 18k close,and over 10400 for the Dax before the Dow closes,right on the 10373 Dax close at the moment.

          7. I expected 10400 + for the Dax,but seems like nobody fancied pushing this today,still btfd will be back next week I’m sure.

          9. It’s not over till the moderately obese lady sings……:0) oh look at that…….there is a god :0)

          19. I envisage a push up right at last orders…….I think there will be a scramble to stock up at the last minute…..what do you think?

          22. 🙂 This is nice.definitely wants to close +,think the open was 17980,so a bit higher and it could spark a bit of a run up to finish the week.

          24. Right WSF Heres the plan…..but keep it to yourself…..don’t want to broadcast this……..let’s sell just after its gone to 4point spread…..then Sunday night it will probably open and go up but let’s buy it back again about 4.30 – 5.00 am Monday morning ….It usually drops back about that time….keep it quiet though ;0)

          26. I want to be in the Dax when it hits 11,000 …..got to get a …1000pt plus ……trade to put in my scrapbook….:0)

          27. I think you’ll get it and probably anything from the Ecofin meeting over the weekend will either be meaningless or Bullish on Greece.This Saudi story,dumping stuff if they are made eligible to be sued over 911, is still around though and seems real,it was on CNBC earlier,but I find it hard to imagine it’s a genuine possibility or threat.

  20. Ok I’m out. Done for the day. Such a bad day. Friday’s really aren’t my day lol. The only good thing I managed was to not ramp up my stake to 100pp on the Dow, though i did start up at 10pp for some unknown reason (hungover). On most days I put together long strings of winning trades, but today was just loser after loser.
    As penance I’m going to go through every single loser and see if I should have been in it at all.
    See you all next week and good luck with those longs!!:)

    1. inoodle,soory to hear that but look at your win rate,then the stats on consecutive losses,big comfort because it happens,its unavoidable with any method below a 100% win rate,there are Mean Reversion Traders hitting double figure losing sreaks and still turning a major profit.The turtle trader had about 48% win rate in their best periods,its an account size and Stop Loss issue,as long as you stuck to your method.Have a good weekend.

        1. Thanks wsf! It’s just a shame my losses are always at the higher stake and wins on lower stake. Oops. 🙂

    2. Thanks inoodle sorry you have had a bad day………but guess what…..what doesn’t kill you….makes you stronger ……get up again and have another go……just don’t run out of bullets :0) have a good weekend buddy :0)

      1. Cheers Anstel.
        I’ve had a good sleep and feel renewed. I really might have to enforce a rule about trading when not on peak form, ie hungover / tired / stressed.

        1. Yes definitely inoodle we need to be absolutely 100% on our game…..it’s hard enough as it is but to be hungover or tired or stressed is not going to help…..its so hard to know when to book profit or when to hold.this trading is one of the hardist things I’ve tried….I sometimes wonder if it’s possible to be quite honest. I think the thing I have learnt is its a little bit about charts,it’s a little bit about fundamentals…..a little bit about news..but it’s a very very big bit about us…all we have to do is press a little button when a number is blue ……you would think it would be easy……..but what happens….we want a bigger number and we hold because we are scared of losing further gains…..it’s crazy when you think about it….if we get a reasonable profit press the flippin button but sometimes we don’t…….the problem is the grey matter that’s between our ears…..very best of Luck till next time…

    2. That 6288 is really something,Nick says in his book that Bianca 20 is a good one.There was a Morning Star on the 15 min chart too,but I wasnt watching Ftse and missed it.

      1. Morning Star…I don’t know that one I will have to look it up……you do mean a chart pattern don’t you?

        1. Candlestick Pattern ,trend change off a Doji.Ftse 15 min 15.45.in reverse at the top it’s an Evening star.They are best when there is a gap so the Doji is an orphan.Doji’s are indecision signs,Candlestick open and close basically in the same place.Ancient Japanese Rice trader tech analysis.Like patterns they are good because there is no real argument about when they are wrong,so S/L is efficent.

          1. Dow 1 min 20.13 is an Evening Star,higher probability in bigger time frames usually though.

        2. Oh well above 982 anyway.Next week for normal service resumed and a bullish April maybe.Even if it stays sideways for a bit I still think we will skip sell in May this year.

          1. That’s me written up for the day,hope you had a good one see you Sunday I’m off to get Cod Roe and Chips hopefully.Have a good weekend.

          2. Well didn’t go exactly as planned but it’s ok. Sold 4 x4 Ftse positions all in profit but they where my sub 6300 ones that I really wanted to keep for emergency evacuation positions…….anyway I have to reduce risk at weekends so that’s an emergency in my book……dumped a x10 at a loss that equates to the gains on my 4×4. So about even in money terms and dumped a x2 at a loss but not too bad……I’d rather not have the risk……..basically dumped about 65% of my long still got a long though but much smaller……I messed up this week…..should of sold weds in retrospect for a nice big gain but thats trying to play the longer game for you……Catch you next week…..enjoy your beers buddy goodnight mate.

    3. Dax in double figures here would be pretty Bullish even if it is shut,undoes the afternoon.

          4. I was just writing about Morning Stars and trying to phone the Fish and Chip shop because its a Service Economy so they only work 5 hrs 4 days a week and you have to phone if you want Cod Roe.

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