Bears appearing | 6678 FTSE 100 resistance | 1000 point rally | 6628 6612 support

FTSE 100 Support 6628 6612 6589 6542 6523
FTSE 100 Resistance 6652 6673 6678 6699 6713 6784

Good morning. So rather than look panicked they left interest rates at 0.5% and also the asset purchase scheme remained as is. The bears got a bit of a boost after the initial rise to 6740 (was a just a bit too early with the short at 6723) and brought the FTSE 100 down slowly over the rest of the day. Overnight has seen some more weakness creep in, and the charts are still looking bearish for the moment with 6589 the next daily support where we have the 10 day Bianca.

US & Asia Overnight from Bloomberg

  • Japan’s currency set for biggest weekly drop in 17 years
  • China’s economic growth stabilized in second quarter

Asian stocks rose for a fifth day and South Korea’s won strengthened as Chinese economic data beat estimates amid an upbeat start to the corporate earnings season. Japanese equities rallied and the yen fell on prospects for stimulus.

The MSCI Asia Pacific Index was on the brink of setting a new high for the year as the Hong Kong-listed shares of Chinese companies extended their biggest weekly gain in four months. Japan’s Topix index was set for its best week since 2009 and the yen traded near pre-Brexit levels amid speculation so-called helicopter money will be used to revive the economy. The pound rose against all 31 major peers and the won was Asia’s best-performing currency. Oil fell and gold was poised for its first weekly drop since May.

More than $4 trillion has been added to the value of global equities since June 27 as the U.S. economy performs better than analysts expected and speculation mounts that policy makers will take steps to limit the fallout from the U.K.’s vote to leave the European Union. Laurence D. Fink, who runs the world’s largest asset manager as chief executive officer of BlackRock Inc., said the stock rally is unlikely to be sustained without support from corporate profits. The earnings season got off to a promising start this week, with JPMorgan Chase & Co. and Alcoa Inc. exceeding estimates along with Daimler AG.

“We’re seeing better-than-expected growth, particularly in the U.S. economy, and we’ve got a higher likelihood of central bank stimulus,” Michael McCarthy, chief market strategist at CMC Markets in Sydney, told Bloomberg Radio. “These ideas are opposing but at the moment they are both supporting equities. At some point there is going to have to be a resolution of that.”

China’s economic growth held at 6.7 percent in the second quarter, beating the 6.6 percent expansion forecast in a Bloomberg survey. Figures for factory output, retail sales and new lending also topped estimates, while investment slowed. The U.S. also has a data dump coming on Friday, with gauges of household spending, inflation, industrial production and consumer confidence scheduled.

Stocks

The MSCI Asia Pacific Index added 0.5 percent as of 12:42 p.m. Tokyo time, rising 4.5 percent this week, the most since April. The Hang Seng China Enterprises Index climbed 0.7 percent, boosting this week’s advance to more than 6 percent. The Shanghai Composite Index held near a three-month high.

“The market has been more positive about equities because global liquidity is ample and economic data are improving,” said Peter So, co-head of research at CCB International Securities Ltd. in Hong Kong.

The Topix climbed 0.9 percent, on track for a weekly gain of more than 9 percent. Fast Retailing Co. jumped 18 percent, the most since 1998, after the operator of the Uniqlo clothing chain posted a profit that beat estimates. Nintendo Co. was set for a record weekly gain of more than 60 percent after its Pokemon Go mobile game proved an instant hit. Line Corp. surged 40 percent in its Japan trading debut after the messaging company raised more than $1 billion in the biggest technology initial public offering of the year.

Futures on the S&P 500 Index were little changed, after the benchmark ended the last session at a record. Analysts project a 5.7 percent earnings decline at S&P 500 firms in the second quarter, which would make it a fifth straight drop, the longest streak since 2009. Wells Fargo & Co. and Citigroup are among firms posting results on Friday.

Currencies

The yen slipped 0.8 percent to 106.23 per dollar, headed for a 5.6 percent weekly loss that would be its steepest slide in 17 years. Ben S. Bernanke, the former chairman of the Federal Reserve, met Japanese leaders in Tokyo this week and was reported to have previously floated the idea of the nation issuing perpetual bonds. Officials on Wednesday denied a Sankei newspaper report that they’re considering the policy known as helicopter money — which involves direct financing of government spending by the central bank.

The kiwi was down 0.6 percent, set for a 2 percent weekly loss. Bets on the Reserve Bank of New Zealand cutting benchmark rates in August rose last session after the central bank said it will issue an unscheduled assessment of the economy next week.

The pound climbed 0.8 percent, poised for a 3.8 percent weekly advance that would mark its best performance since 2009. The Bank of England kept its benchmark interest rate at a record-low 0.5 percent on Thursday and Theresa May took over as prime minister a day earlier, restoring some calm to U.K. politics after last month’s Brexit vote prompted David Cameron’s resignation. The contest to replace him was cut short after May’s rival dropped out of the race.

South Korea’s won rose 0.6 percent to its strongest level since April, while Taiwan’s dollar climbed to an 11-month high. Both economies count China as their biggest export market.

Commodities

Crude oil fell 0.2 percent to $45.57 a barrel in New York. Prices almost doubled between January and June, signaling that markets were finally healing as falling U.S. output, rising demand and disruptions from Nigeria to Canada all helped eliminate a global production surplus. Now, as consumption falters and halted supplies return, analysts from BNP Paribas SA and Societe Generale SA warn prices may sink towards $40.

Gold fell 0.5 percent, headed for a weekly loss of 2.7 percent. Copper traded near an 11-week high and zinc climbed following the release of China’s economic data.

Rubber rallied 1.7 percent in Tokyo, boosting this week’s advance to more than 8 percent. Prices have been boosted by the plunge in the yen and also speculation about stimulus measures in some of the world’s leading economies.

Bonds

Treasuries snapped a record-setting rally this week as the early resolution of Britain’s leadership vacuum eased the flight to safety that was sparked by the June 23 referendum. The Bloomberg Treasury Index was poised for its biggest loss in eight months and the benchmark 10-year yield climbed 19 basis points to 1.55 percent, after sinking to an all-time low of 1.32 percent on July 6. The yield rose one basis point on Friday. “We were really worried about Brexit, but suddenly U.K. politics have stabilized,” said Kim Youngsung, the head of overseas investment in Seoul at South Korea’s Government Employees Pension Service, which has $13.2 billion in assets. “Yields probably won’t fall further.” [Bloomberg]

FTSE 100 Outlook and Prediction

FTSE 100 Prediction
FTSE 100 Prediction

I mentioned yesterday that I was looking to short the rallies and think thats the case again today, especially if we pop up to test the pivot area at 6678. We have the 30min coral slightly below that as well at 6671 so I think shorts around this area are worth going for, assuming we get a pop up at the open. There is a fair bit of US news out at 13:30 today so likely to get a bit choppy around then, the main one being retail sales for June forecast to be 0.1% down from 0.5% previously. As usual on a Friday, expect the unexpected and keep the stops tight (some also do smaller stakes). The 2 hour chart is still bearish, though the price did pop up above the 6700 level on anticipation of the rate cut yesterday. Think here was a lot of buy the rumour of a cut going on yesterday. So, fairly simple plan really, looking to short around the 6670/6680 area and maybe hold for a while if it drops off and can get the stops to breakeven or better for a run down to 6500 or lower

101 Comments

  1. Morning fellas…..well FWIW I don’t think Mr Pump is going to let us get out of our remaining shorts…….I have covered most of mine with only 25% remaining…..my task now as JSft said yesterday is to recover the points i gave back yday…….Giving up is not an option…..Dig Deep…..perseverance , disapline, and mindset is the key….good luck all……

    1. I think short is the preferred option Si but I want mine higher up if I can get it there……..I wouldn’t be surprised to see the Dow above 19000 at some point…..If I’ve learnt one thing it’s that when Mr Pump wants his way,you might as well go with the flow….Makes no sense of course but I think we are back to BTFD.

    2. Morning peeps !! You should be getting it by Tuesday I suppose !! 🙂 …Would be interesting to see where Friday closes… good luck everyone sitting on short from 68 !! will hold it over weekend if it stays down or might closes depending on how it gets!!

  7. just a thought Keeping to short is good idea but not to marry the positions ;-famous word of TMpf.. keep taking profit as there might be couple of waves before it actually learn about gravity !! will short 40-50 again if we see it quickly

  8. Interesting to note though that I had got my short B/e up to 6622 yday…..in hindsight I could have got out B/e but if they had reduced rates it would probably have compounded the problem…..sometimes holding does work

    1. Wonder if that was a stop hunt to close out longs….or the real deal…..I’m going for bluff job….

        1. Anstel!! would like to thank you about the video you shared yesterday very encouraging and motivational

  15. I feel like a prisoner who is tunnelling out of stalag luft 3 and is just under the wire with 30 yards to go till freedom………just hope I don’t end up in the cooler with Ives..:0)

  17. Morning everyone, Well despite doing a school run and an urgent 60mile round trip to hospital I’ve managed, taking all your kind comments on board to get in 9 trades using the lower (thanks Anstel) £pp and it’s worked a treat!!
    So far I’m going for 3-5 points post trade with the minimum ig 6 point stop and i must say virtually stress free, thankyou once again x

      2. Just chilling out watching an interesting video about Stalag luft 3…. The great escape ….I’d like to visit one day….Market wise looking for a push North of 60 initially…

  20. Interesting video….I’m goin to try some scalping now Sharma. I’ve been relaxing after yday….Thanks for jolting me back into life :0)

      1. since you are long I should consider closing my short lol!! dun wanna bet against you !! but lets see

    1. will settle for 5 !! dun wanna push my luck lol !! have a good weekend friends see you on monday

          3. I should be more discipline but it was not the greed but pure signal based trade !! not every day gives you that many opportunities !!

          5. you are right anstel it can be ! but sometime you have to trick mind saying no more trade for today so that you can wait patiently and if in case any good trade present itself you can slect to do or not !! works for me.. signing off now !! finally lol 🙂

          6. See you Sharma ..have a great weekend…..very impressive trading my discipline needs improving….

    2. Just a suggestion anstel I would nt hold Long over weekend in case you get stuck !! best of luck buddy ! and good weekend

      1. Not planning on it …..it’s bloody tricky this….thanks for the good luck…all the best mate…..

  22. Hey all
    Wrapped up in trading today, which went well initially, but a frustrating missed profit spurred me into super size mode. Ended up at -400pp. Probably not the way to have a long career unless your account is 1mil (it’s not).
    Decent profit for the day… 4 days of profit (average 400) but still down for the week (Monday sucked).
    Enjoy the weekend and hope all your dreams come true:)

        1. Inoodle you really must stop trading massive size mate…you will go bankrupt. STOP IT do you here me mate?

  23. Just landed In Portugal for the week. Work getting in the way of trading! Doesn’t look like I missed much?!

    1. Sounds awful….all that sun sea and sand……..never mind you’ll just have to grin and bare it :0)

  24. Closed 5 longs between 68 and 69.5…… Recovered a chunk of my loss on my short….Will get some more back next week….Good weekend all…..

  25. stevejp, keep us posted as to how your demo trial of your new strategy goes. Thanks for reply the day before.

    1. Evening jack 2
      It went very well considering I had a terribly hectic morning, the only losses I took via stop loss was my own fault due to being in profit then putting phone down to drive from place to place.
      Overall I got 20 profitable trades of 4 points each and 4 losses at 6 points each, all at £5 pp so £280 in total profit.
      I will Re tweak it tomorrow which increases risk somewhat going for 3 points per trade and 6 point stop though you never know ig might be down to 4 minimum tomorrow in which case my app will be 5 hopefully

        1. Indicator wise i just use daily pivot points and a 9 and 20 ema and that’s it, I then just gauge momentum of prices in relation to those points and jump on the momentum. And that’s it in a nutshell.

          1. Thank you for an update. If you know what you are doing it may work. As long as the amount of lossing trades do not exceed the winning ones.

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