Bounce today

Wow! It was all going so well with the long at 6725 (helped by the ECB rate cut), cashed out at 6775 to take the +50 as the GDP news was coming out, and with the shut down last month expected to struggle to reach the forecasted 2%. And what happened – it smashed it at 2.8% and once again eyes went immediately to stimulus and a mass panic that it would be pulled sooner rather than later. That’s triggered some pretty large falls, with the Dax giving up all its gains (it hit 9200 pretty much to now be back where it was yesterday morning, and the FTSE dipped to 6644). I still stand by my hunch that no tapering till next year, probably end of Q1. If it was me id want steady monthly data on a regular basis before even thinking about stopping it. A fact reiterated by France being downgraded to AA from AA+ overnight. Interestingly though the S&P has found support at 1647, and has the POTENTIAL to now climb to 1787. Wouldn’t that upset the bears! However, we have the US Payrolls jobs data out today which will probably light a “taper” (get it, taper, oh never mind) under prices at 13:30, as that figure will have been impacted by the shutdown last month. forecast is 125k and 7.3% unemployment.

Asia Overnight from Bloomberg

Asian stocks fell, with the regional benchmark index heading for the longest streak of weekly losses in five months, after faster U.S. economic growth fueled concern the Federal Reserve may reduce stimulus sooner than expected.

The MSCI Asia Pacific Index dropped 0.4 percent to 139.78 as of 2:07 p.m. in Hong Kong, extending this week’s retreat to 1 percent, its third straight weekly loss. About three shares declined for every one that rose. The gauge gained 8.4 percent this year through yesterday amid unprecedented stimulus from the Bank of Japan and optimism the Fed will continue its bond buying into 2014.

“The stronger GDP data has led some to believe that the Fed will start tapering a bit earlier than they otherwise thought,” Keith Poore, head of investment strategy at AMP Capital Investors Ltd. in Wellington, which manages about $130 billion, said by telephone. “Payrolls is going to be a messy number because of the impact of the shutdown. The market has got ahead of earnings, so we shouldn’t be surprised to see a little bit of weakness,” he said, referring to last month’s temporary closure of the U.S. government.

U.S. Payrolls

Investors’ focus now shifts to today’s U.S. October payrolls report after data yesterday showed growth in the world’s biggest economy accelerated to a 2.8 percent annualized rate last quarter, faster than the 2 percent median estimate of economists, and the European Central Bank unexpectedly cut interest rates.

Economists predict a report today will show U.S. payrolls climbed by 120,000 in October and the unemployment rate increased to 7.3 percent from 7.2 percent in the previous month.

S&P

The S&P 500 dropped 1.3 percent yesterday, its biggest loss in two months, after the GDP report. Still, the data showed the biggest gain in inventories since the beginning of 2012, which risks holding back the economy this quarter as companies limit production.

The benchmark of American equities has rallied 23 percent this year, challenging 2009 for the best annual gain in a decade, as corporate earnings beat estimates and the central bank kept interest rates low to spur economic growth.

FTSE Outlook

ftse 100 prediction
ftse 100 prediction

I am watching the S&P today to see if 1747 holds (tested twice last night so a double bottom so far), if it does then the bulls are still in play and we have a rise to 1787 on the cards, which should take the FTSE Dax etc. up with it. If 1747 breaks then 1737 and 1731 are the next supports. Resistance wiser, if 1747 does hold, will be at 1755. On to the FTSE. With price below both the 10 and 20 day Bianca channels I would expect us to get back within them at some point soon. We will need to break the 6686 level today though so as to ensure we don’t just bounce back up, test the bottom of that channel and drop again. So today, being Friday as well, stay extra nimble! With the updated Raff channels for today we are at the bottom of both which is why I am thinking a modicum of support here between 6640 and 6650.  With the current price as I write at 6665 I think a little dip at the open is likely, especially as the 30 minute EMAs are bearish.

130 Comments

  1. Im expecting some form of GAP fill on US markets as the futures are up, probably after NFP… FTSE is sitting at extreme gap fill at 6679 so wouldn’t be the worst place to go small short with the option of laying in a few more up to 6700.

    1. Im also out of my shorts for time being. Watching for now, will probably take a position after the NFP later.

        1. Yes, on Spredex there are similar charts and the platform is easy to use. It still doesn’t have hedging opportunity but who cares. However the spreads are worse: it’s 1 points from 8am to 4.30pm then it’s 2 points as on City Index it is 1 points till 7.00pm I think. But I don’t trade after 4.30pm mostly anyway so it’s ok for now.
          Plus overnight charges are 1 point but not 0.5 point as on CityIndex. And I am not sure if they add/deduct any divi on Tuesdays. But I will figure it out in time, just don’t want to phone them at the moment.

  5. Been holding my shorts from 6730 for almost a week now. Will close at 6550 and go long from there and buy all the dips along the way.
    Interesting thing about the Santa Rally, people really expect there to be none this year, would be a massive game changer…

    1. Is it a Rally every Christmas or there wasn’t one in the past?
      Will ever people stop buying stocks as Christmas presents? 🙂

      1. Only 4 times in the last 30 years has December been down month. The biggest win ratio of any month. Next up – April which has only fallen 6 times during that period.

    1. I think we will see some rise before further dips into next week. 6600 still a target for me, but atm I`m long @6648. I think we are in a short term sell the highs market.

      1. Going against the trend?
        It is quite Bearish to me, but the Christmas spirit tells me 6550, then the rally for Xmas.
        I was reading a steady decline, but it surprised me last night with that free fall. I agree with Nick today, but not as strong rally as he predicts. I think steady climb for today, but next week the bears will eat the bulls 🙂

        1. Maybe I am seeing everything differently. As I understand everybody are set for a spike up for further declines. Are you expecting to take short today on the spike if such one happens? Or it will be long long one way?

        2. Not 6600*, sorry i am looking to go long term bullish @ 6517 or there abouts, very strong resistance. Don`t misunderstand I am going long now with tight stops, to see if I get some points on NFP data.

  8. Can’t see a rise today.i usually try to guess the market sentiments. If I would have a few billion to invest I certainly wouldn’t buy now till I am not sure about that it hit the bottom. Not much time till Xmas so my thought is that this will go down a bit probably around 6500-6450 then buy again till Xmas.

  10. Btw I am still holding my short from 6777 and I will not close till it hit 6550 then I’m done for the year…

  11. We are going down and sharply. Do not want catching knifes.
    The T-Line is reversing in a top. DAX is also in a brink of something similar.

    I want to see that T-Line reversing again with price above in a bottom (where ever it is). Not for now

  20. Well, again, not sure what’s going up. Like stupid had long 6670 or something and then had long 56, 51 basically closed until I get a new low stake entry. Got 10 points of my usual stake though. Closed 64, need to reconsider. I think it’s going down, people.

    1. I always say myself – don’t press the button 30 seconds before NFP and every time I do. But I was calm like an iron today.

  21. I do not trade in news. Technically things are very gloomy. And after what it comes out, the trend resumes.

    1. How do you trend then? As I understand the news drive the trends, change them etc. Do you have a position now at the moment?

    1. it was a bit brutal 27 point slip. What do you mean by good news is good news. Do you see long at the moment? Not sure now.

      1. Looks like usual break of the range and down it goes. But I would like to have a higher entry for short tbh. 6696 would do…

  23. Just the catalyst needed to drop the indices for the next few weeks. Good jobs figure, speculation of tapering to be eased sooner. Give it several weeks and they will probably tell us the figures were not quite right and we can then rally for Xmas.

  24. .. the santa rally started on 1st January 2013, looks like its over, tapering is coming it cant be stopped sell, sell, sell, buy the dip, buy the dip 🙂

  26. Would someone care to explain to me why it’s holding around the 6666 area…?

    Things just do not seem to go how everything should techincally & fundamentally happen. Very confusing.

  27. With NFP data, i was looking forward for some volatility. Just a steep drop and back up at 13.30, is it that? 🙁

    1. I suppose it’s all sentiment & personal opinion…but with a NFP that strong, I don’t understand the rise. (As you can probably tell my short order was triggered but the reverse has left me on a naughty loss)

      1. Why did you put short order BELOW THE PRICE? As I understand there should be a long order cos you want a better price as possible. Not sure if I understand your concept.

        1. It was fairly tight to where it had been holding throughout the morning actually, and as I personally did not expect a rise, my short kicked in immediately as the news came out. Was actually going to plan.

          Good for the hold though. Don’t have an itchy trigger-finger.

          1. You are right, if it wasn’t for that naughty finger I would have taken long from 6649. Oh well, never mind 🙂

  28. I do not believe that no one saw yet that flag pennant with a breakout below
    First was the cross over of MA 200 for 500 points at least, then Bull flag breakout in middle October, now this…. I’m a shame. This is the best place to discuss FTSE ?

  35. … its going to take soom “doomberg news spin” to explain this rise so soon after the armaggedon at 1.30pm

    1. Im Short FTSE at 6713 so hope we don’t hit 6770 lol… However just banked a half and moved stop to b/e so we’ll see.

    1. .. well the very threat of taper is always worth a 5% retrace, actually doing it is going to impact another 5%, the thought at 1.30pm was enough to move it significantly, that thought will re-occur before tonights close or i’ve never lost any money in this stupid casino 🙂

  43. hubris I think market been through the motions once and coming to the realisation that as some have thought the taper coming at whatever point is economically the best thing and for the markets a good thing too. Usually rates moving higher = strong economy ; after last times hissy fit lets see what happens this time round. (I agree taper not rates moving up but just saying normalisation in rates )

  44. … this taper has infected the very bones of the market, your comments are quite sensible but that is not what this current market is about, the level of the indicies are unjustifiable except for the fact that they are justifiable, a correction is coming no matter what and its coming soon 🙂

  45. Waiting for a 50% retrace on yesterdays lovely pin bar on the DAX daily chart, then looking for signals to go short DAX.
    Bearish on the FTSE but waiting for a good entry point above 6750.

  46. ANyone uses Prorealtime ? Is there a gap at the open of trade today ? Prorealtime saids no. It open at 6697. But Investing.com always shows all the gaps.

  48. … dont you just love the way the nedia put the spin on these things after the event, its all so positive once again .. priceless buy the dips 🙂

  49. Doesn’t seem to bullish to me yet. Still expecting further dips, and at least seeing 6650 again before the real xmas rallies kick in. Expecting dips next week. Who knows hey..? Thoughts?

  50. I hate to be short but Im so tempted to go short in DOW at 15690 with tight stop just above 15700

  52. Have a short on the Dax but won’t be adding to it just a one way market at the minute!! Up up up!!

    1. I would go long in FTSE if this hammer has follow trough.
      I believe that I made a mistake exiting my position at 6692.
      That candle today hit the long term ascending trend line, leaving behind a bottom tail.
      And that slope can be reversed easily Monday.
      So my b/e in my gains is in the 6707 area. That is the point I should enter so that I do not miss anything for another leg up.
      Let´s see If I can catch that price with a gap up to Monday

      1. If*. We will see where the momentum goes after hours in Monday morning. But I am still inclined to believe we will see more drops. There is strong resistance 6550, which make a good bounce for Christmas Rallies. But I am a day trader, the one off long term short with the FTSE at 6800 was because we had hit that way too early… So like today I went bullish and got myself 60 pips.
        Good luck though, if you go bull now, you won`t lose. But I rather prefer to go bull at a more lower level.

          1. Yeah, that really does me mentally, makes me want to jump in randomly..but then again patience is a virtue

  56. … I give in there will be no drop ever, it’s over buy, buy, buy of course this might be a sell signal but it’s very hard to see what could possibly end this rally, debt limit .. Good news, taper .. Good news, NFP RISING .. GOOD NEWS, NFP falling good news, interest rates rising .. Good news, oil prices riding or falling .. Good news, quite simply there is and possibly will never be any REAL bad news … Ever 🙂

  57. Yeh rise on European banks cutting rates by a 0.25 then nose dives on America GDP rising to 2.8 now we get a monster 204k NFP and it rises again all just smoke & mirrors.

  58. No way I can see price dropping.
    It’s another 500 point up, for sure.
    That 6700 level is holding for 3 weeks in a row. All the people saying that FTSE will drop to 6500 are dreaming.
    Today I saw that the markets are pricing in the taper that is coming.
    I need to hold to my positions, whatever it takes. I only see that break of Mays’ top, next wek

  59. … PSM I’m now in your camp this will not fall can’t see anything to stop 7500 pre Xmas or even higher

    1. I need to buy again Monday at this levels. Hope to catch at 6707, is where I was before been stopped.

  60. Just closed for a small loss on my long from a few days ago. I was pleased with the loss as it was looking horrendous earlier today. Will wait for a dip before re entering. ‘missing the train’ I have to fight this fear. The market will always be there and there will always be trades…

    1. I bought in the 6500 level and was using a trail stop. In first I was thinking in exit at 6800 when I add 500 from the bottom, as FTSE had been moving more that 500 points when crossing above the 200 MA. This is what had happen, but then I started to realize that the 6876 level could be broken, looking at this trend and comparing with others in the past and also with the weekly ascending trending line. So I removed my target and let it flow.
      But then the deja vu candle of a shooting star started to make me insecure and maybe FTSE wasn’t able to break the top and being in a somehow bearish trend in a long term I preferred to be stopped.
      But now, that candle from today, rejecting all cheaper prices and touching a ascending trending line and also the top of a rectangle in the futures…

  61. Sorry don’t agree there once QE starts to be withdrawn then markets will drop!! Then we can start trading on maybe a more reasonable playing field but at the moment fighting the trend won’t work!!

    1. But today we did not saw that. The good news could be a signal to a sell off and yesterday’s candle on the DOW could be the excuse.
      And today we made another all time high, negating that engulfing candle.
      It seems that markets are pricing in the Taper and also this good news are good for economy and stocks, i.e., that balance tends to the economy/stocks and less to the Taper.

  62. Super smiles all round for me long at 6643 (still holding) after that sudden drop to 6640 triggered my order , i opened a short at 6705 but got stopped out hopefully recover that next week 🙂

  63. Well, markets will be here Monday. Will see how the China data will impact in markets. But almost surely I will enter again at 6707. If I could buy cheaper, better…

  64. The only thing that mattered today was the $5.25bln POMO that hit the market at between 10 and 11:00AM…

    Typical Big POMO day in the Stock Market, in 2013 87% of the time market went up on POMO days.So this is PPT day… news bad or good is irrelevant when FED is fudging the market! sell into strength or was it keep buying ? buy on dips sell on highs … who knows !

    1. SO with all fresh cheap money onto the market today, what you say about Monday ?
      Another round of cheap money ?

  65. POMO day on Tuesday but only 1 Billion so potentially more upside Monday ( smallish as people re positioning) but then an another sharp decline mid week as volumes were low yesterday. This market needs a correction at some point! I really don’t think the next big move up will start post 20th of Nov (bradley model turn date). The NON farm numbers are a complete fudge 204K.. CESBD adjustment component number of that was 126k ie a complete guess number by the Labor dept so in fact 78k were the actual figures for October about half of that needed to keep the economy going. Unemployment rose to 7.3 %. Really don’t know will have to wait till Monday think it will be very tentative Monday morning and ftse and dax will wait for a reaction in the US open before anything really gets going.

  66. “We are going down and sharply. Do not want catching knifes.”

    “No way I can see price dropping.
    It’s another 500 point up, for sure.”

    PMS where do you actually stand? You seem to change your mind every minute. Your posts are confusing.

    1. 😀 yes, I understand your frustration. I share with you this thoughts.
      But it was a very unexpectedly Friday.
      DOW making new highs and FTSE manage to close for the week again above 6700 level, after breaking it, prior day.

      FTSE has a very interesting and repeatedly pattern. I’ve seen this quite often.
      One that strikes me is when I bought in 6330 level one afternoon in very pessimistic shutdown day, I left it to next day and then has it bounced quite nice, I moved stop to b/e, but in afternoon next day I was stopped. Thought we could go a liitle more deeper.
      FTSE made a double bottom and bounced definitely leaving me behind.

      Yesterday I saw the same, but I’m not saying this is the reason I think we made the bottom. Only to say that it’s a repeatedly pattern that we must take advantage every time we see it. To confirm with a close hourly candle.

      Other thing I need to reformulate, is my strategy concerning booking profits.
      I need to go back to old times when I constantly made fast profits, instead of leaving positions open. Swing trade is a good option, but once you are in, is difficult to exit. You always think price will go further up.
      THis is not the first time this happens to me. With Gold I had also similar experience with great agains and then being stopped in b/e. But GOLD is a instrument I will never trade again. It’s to much speculative and the technicals are very tricky.

      1. Not frustrated just asking my friend. Each to their own I was just curious. Thanks for your response

  67. Been looking for a correction on the Dax for the last 2 weeks but just don’t seem to be happening… Nearly 9100

  68. The purchase or sale of Treasury securities on an outright basis adds or drains reserves available in the banking system.

  69. It is indeed a very fickle market the past couple of weeks with technicals changing constantly and fundamentals allover the show negative up positive down and vice versa i don’t really read the headlines anymore as they always contradictory now a days, remember the press just want headlines. correlation today then gone tomorrow. PMS makes a good point about booking profits this has happened to me a lot recently where i was up a lot to then break even or even worse lost money. have to remember to take a profit as the market will always be there the next day. Getting wedded to a position is a classic mistake and we all do it. There is so much volatility at the moment its pretty easy to make a fast buck as PMS says. Another point is i have stopped looking a the macro level as we are all doomed …. Japan, Euro US but hey this market keeps going up so follow the herd. GOLD forget it.. to quote Bernanke “nobody really understands gold prices and I don’t pretend to really understand them either.” FAIRPLAY … in saying that I have an order at 1268.

  71. .. Short on the S&P still convinced Friday was a pump and dump recovery, short term short until it breaks looking for 1755 before the rise begins again

  72. .. Short on the S&P still convinced Friday was a pump and dump recovery, short term short until it breaks looking for 1755 before the rise begins again .

    1. I thought you were long
      “PSM I’m now in your camp this will not fall can’t see anything to stop 7500 pre Xmas or even higher”
      Even with a 2nd close above 1770 is SPX you still believe that was a fake ?

  73. .. Oh yes a touch of sarcasm again 7500 possible but unlikely , I am short and it will retrace but not very much 1-2% but then I’m long until 2035 that’s the year not the indicie value 🙂

    1. but tomorrow with US bank holiday, I expect the markets to go higher more freely.
      I only need to find the timing to enter

  74. In an overall market view, what I see is a bullish flag pennant that had a false breakout by some news and then after 2 volatile days, the prices are starting to stabilize and proceed to were it was wednesday.

  76. Im targeting a gap fill to circa 6706 to go LONG tomorrow. Think we’ll decline a bit overnight and on opening tomorrow, but likely finish towards the 6750 mark.

  77. Expect a drop soon, but not too much. May rise for a day or so before dropping. All the indices are topping out on daily charts. If you don’t want to short, then take a break and wait and see what happens in the next week. Seems stupid to me to go long at the top of a daily chart.
    GLA

    1. Flash wouldn’t disagree with that. Think we may top out in the 6750-6777 region. But if we drop to 6700ish tomorrow as i expect they i’ll take a long with a fairly tight stop to try get 40-50 pips before turning short

      1. You bet. Tomorrow will be a green day, but I need to catch that timing.
        With rate cut, I need to see the Euro behavior- I think will influence the markets too, besides de dolar

  78. It’s breaking the middle of channel. So besides is too early for me to trade until 9 am, Maybe I can buy cheaper. Will wait

    1. Yep i’ve just closed my shorts from 6735 for as nice 30 pips… Pivot at 6706 and 6700 big level. Long from these levels could be good but watching for now

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