Bit more bull to come? 6748 resistance to break?

Good morning. Well here we are, the first day “proper” back after the break and the start of the new trading year. The 2014 outlook was published in the Spread Bet magazine here (am on page 99) and there are a few other articles in there that are interesting.  What is slightly disconcerting is that an awful lot of people are predicting 2014 to be bullish and a bit of a one way street, which is something that hoists the warning flag in my eyes, as the market often does the opposite of what the masses expect. I am sure you have probably seen this too!

Asia Overnight from Bloomberg

Asian stocks fell, with the regional benchmark index headed for its biggest loss in more than three weeks, as a gauge of China’s services industries dropped, signaling growth may slow in the world second-biggest economy.

The MSCI Asia Pacific Index slipped 0.8 percent to 139.23 as of 2:06 p.m. in Tokyo with nine of its 10 industry groups falling. It’s headed for the biggest loss since Dec. 12. Energy and telecommunication services shares led the decline.

This year “is going to be a year of consolidation,” Matthew Sherwood, head of investment markets research in Sydney at Perpetual Investments, which manages about $25 billion, said by telephone. “China’s growth is slowing down structurally. Our expectation out of China’s economy is it will grow just over 7 percent this year.”

The Asia-Pacific gauge added 9.3 percent in 2013, rising for a second straight year, as central banks across the globe acted to spur growth. The measure traded at 13.1 times estimated earnings as of Jan. 3, compared with 15.5 for the Standard & Poor’s 500 Index and 13.7 for the Stoxx Europe 600 Index, according to data compiled by Bloomberg.

US Futures

Futures on the S&P 500 were little changed today. The measure lost less than 0.1 percent on Jan. 3, falling for a second day. Fed Chairman Ben S. Bernanke said the headwinds that have held back the U.S. economy may be abating, leaving the country poised for faster growth.

U.S. central bank officials said last month they will reduce their monthly purchases of assets to $75 billion from $85 billion starting this month, citing faster-than-estimated economic growth.

FTSE Outlook

ftse 100 prediction
ftse 100 prediction

I am still holding a bit of the long from last Friday at 6700 as I think that we will see a bit more upside this week before any bearishness kicks in. Either way the stop is at breakeven on that position. The FTSE has held up quite well since hitting that 6700 level, even with a weak Asia overnight, and I still think we will see 6800 shortly, as the 20 day Raff channel is holding as support pretty well still. The spanner in the works for that plan will be a break below 6700, which would lead to support at 6642 and 6620.

Resistance is at 6748 which might stall an early advance, as that is the top of the 30 minute channel that we are currently in. I think a dip from there down to the pivot at 6725 is possible, then more bull for a rise to the 6766 area. If that breaks then we should reach the 6800 level. As we are at the bottom of the 10 day Bianca and 20 day Raff I am still feeling upbeat for the early part of this week, though it will be interesting to see how today plays out with everyone now “back in the game”.

92 Comments

  2. no signal on ftse at all..
    my indicator as finally died down..indicating sidelines.
    I have no position in the market.
    But still my view is quiet bullish on ftse..after a pullback.
    now the real test begins…patience till next opportunity…its time like this i wish i was trading other markets as well.

  3. Same as you hashmash,no position, but do think that fed minutes this week could be a kickstart for good movement, and nfp data on friday will give a short term boost or pullback.
    Waiting for a 6850, or at least 6800, before a massive pullback at some point. But not confident about a long just yet.

    1. Mo06…”We still haven’t tested Fridays lows”

      and you are saying WHAT !!!! …you expect it to got there ! Nick and JSS have the same idea, that’s a good trading idea..as we are following Nick ! do you have any constructive input you would like to share ?

      1. Calm down Steve, it sounds like you’re getting upset again. I know you’ve lost a lot of money but try not to take it out on others.

        1. Think you have the wrong Steve !
          James, making a statement of just “We still haven’t tested Fridays lows” is an indication to ???…~I personal do not find those kind of statements constructive! has no direction of thought…
          I personally have not traded since November that was my year end at profit thank you James…
          So if you have something constructive to reply with, please do.

      2. Do you really think that taking advice on a web forum should be part of a decent trading plan …..?

          1. Senu, I only made 2 trades this am, scalp long on the FTSE and same on RIO.
            FTSe is rangebound at the moment, a break of 6700 may see a decent sell off, patience is a virtue for a trader.

  7. DOW had a shooting star on the weekly and on the Friday daily last week. Tells me DOW about to drop so will it happen to day and take FTSE with it!!

    1. ISM report on non-manufacturing has been signaling a slowing in growth. Todays manufacturing employment index is an indication for Friday’s jobs report so I believe this could be the turning point for the DOW dragging the FTSE with it.

        1. Then you may see your 6800 + but there will be a lot volatility so as sharp as it move’s one way could move the other, For me I am looking to start trading this week, so if it is positive I will not be placing any trades today.

          1. uncertainty on the number of floor traders who make it into work today! so will be watching after the news has a better indicator,

  11. Everyone wanting this to go to 6800 can’t see it till we drop more for a good run up through, and all those shooting stars on the Dow weekly and daily tell me drop coming before leg up to 6800 and beyond

  14. Pretty sure the general consensus is to buy the dips…however a bit difficult for day traders. Gl all

  15. Is only me seeing a bull flag in daily chart ? Everyone is forecasting another huge deep after 6800-6850. But this bull flag would invalidate that deep.

  20. Currently short on Dow from 16528, 16516. Let’s see what this ecominic news is. We could really head south if it’s interpreted in a certain way.

  22. D trader Dow setting up for a major correction in my view with those shooting stars last week on daily and weekly.

  24. Ok so it’s disappointing news. Let’s see how this us interpreted. Bad news is good news? Eg less tapering. Bad news is bad news? Eg tapering as planned.

  27. I have my stops at open. If a major correction takes place then it’s going to be a fantastic start to 2014. My overall suspicion is that buying at the highs of the market is not a wise thing. Of course picking tops can be futile too.

  28. I’m still on the sidelines. I am bullish but I cannot jump in at this level when it feels on the edge

  33. FTSE still has to break that 6750 resistance. It’s knocking, but if it does not manage to do that before 16:30, then I will be full on bear. Have been holding a short waiting for the correction, let’s hope…
    Gl all

  38. FTSE didn’t make much progress through 6750 there. Resistance must be slightly higher.

  46. Thanks Marco. Where did DOW get support prior to tapering announcement? 15700ish? I remember FTSE was at 6400ish because I went long and closed at 6650. Strong support for FTSE at 6400 but can’t see raft being tested as the mo. DOW is a different beast.

  47. How strong is ftse?! It doesn’t seem to have strength to push on but are the other markets just holding it back?

    2. Agreed. I shorted from 6751 and closed at 6730. I am medium-term bearish and believe that we need consolidation but wouldnt rule out short term rise to 6800 area.

  53. I think next rise will be up through 6900 so more consolidation needed before big push up. Looking for 6690 on FTSE

  55. Anyone else thinking this pattern is looking quite similar to that of the start of November?? A slow drift down. I remember during November after the big rise, everyone was saying just need to consolidate then 7000 here we come etc…..

    1. That’s why I am short 🙂
      Not counting on that guaranteed 6800, maybe later, but not now.

    2. we had a shooting star and the movement to the upside was bigger. Comparing we are still in the middle…

      1. Don’t know about that, look at the FTSE growth in 2013 compared to previous years.
        Yes the economy is ‘recovering’, but we need steady growth to maintain strong growth, not a bubble…
        I don’t expect to see the sub 6200, but expect to see at least 6500 before the next leg up 🙂

  56. DOW recovering well. Looks like its going to close in positive territory. There isn’t the feel of a major sell off. Asia will be interesting tonight.

  57. Closed short on FTSE @ 6730 as DAX future is up +12 on its cash close. FTSE broke Fridays high, so technically is now in daily uptrend….

    1. Dow dragging FTSE even lower, dropped 0.08% since 20:00hrs.
      If DOW continues this way, we will see a negative open on FTSE and continuing downtrend…

      1. Oh and plus FTSE closed lower than on Friday, so technically downtrend, depends how you look at it. It failed to break resistance, but still have good support. Could go either way…

        1. Very tight, hence could go any way. I just think the market is very unsure at the moment, so am ready for anything really. Mainly bullish due to the close today.
          Gl anyway 🙂

  58. Dow closed with a shooting star so bearish and looking for more downside later today when it opens. As for FTSE seems to have real strength and will ultimately break up at some point. Hoping Dow will pull it down a little further towards 6700 mark so I can close my short at 6714 which I screwed up on.

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