Cautiously bullish at the moment, but ready to change stance. So fickle!

Good morning. Well we got the dip and rise yesterday as expected though we didn’t quite reach the lower target area at 6610/13. Still, after the dip the bulls fought back though we spent quite a while flatling around the 6635 area where we had the resistance, before a break higher. With prices closing above that level we could be on for a bullish path, though the press is getting a bit over excited with 8 up days in a row now, and that’s usually a warning sign. Looking at Bianca below we certainly have a lot of green daily candles in a row since the 6310 low the other week.

We have the delayed payrolls data due out today as well (delayed due to the government shut down) which is forecast to show employers added 180000 jobs.

We also have a 7.09 divi which will be applied – 16:30 for IG, other times by other providers so bear that in mind too.

Asia Overnight from Bloomberg

Emerging-market stocks fell for the first time in six days and Asian currencies weakened before U.S. jobs data. Crude oil declined to the lowest level since July, while nickel rose. The MSCI Emerging Markets Index dropped 0.3 percent at 12:51 p.m. in Tokyo. Standard & Poor’s 500 Index futures slipped 0.1 percent. Hong Kong’s Hang Seng Index slid 0.4 percent as China Mobile Ltd. slumped. China’s yuan fell for the first time in seven days versus the dollar, while Japan’s yen lost 0.2 percent. Crude oil was down 0.3 percent at $98.92.

U.S. employers probably added 180,000 workers in September, the most since April, according to a Bloomberg survey. The data was delayed by a 16-day government shutdown that spurred economists to push out expectations for tapering of Federal Reserve stimulus. China Mobile dropped 3.6 percent after posting the biggest profit decline since 1999.

“Although there’s a strong likelihood tapering will not start this year, investors remain mindful of key data to ascertain the state of U.S. economic recovery ,” said Jonathan Ravelas, chief market strategist at Manila-based BDO Unibank Inc. “The jobs data will give markets a good gauge.”

Fed Stimulus

The U.S. Labor Department will probably say the jobless rate held at 7.3 percent, according to median estimates in Bloomberg surveys. Economists expect the Fed to delay the first cut to its quantitative-easing program until March, according to a separate poll conducted Oct. 17-18. The Fed’s last two policy meetings this year are on Oct. 29-30 and Dec. 17-18. The Richmond Fed also releases its manufacturing survey for October.

U.S. Earnings

Companies including Texas Instruments Inc. and Netflix Inc. were among S&P 500 members that reported quarterly earnings after U.S. markets closed. Texas Instruments, the largest analog-chip maker, forecast revenue and profit that fell short of current analysts’ estimates, while Netflix’s third-quarter earnings per share exceeded projections.

FTSE Outlook

ftse 100 prediction
ftse 100 prediction

We have a triangle on the 30 minute chart which will break today I am sure, and with the pivot and ProTrend support line coinciding at 6645ish then a long from there could well be viable today. However (there is always a however isn’t there!) if the 6635 level breaks then I think we could see a sentiment shift and the bearishness will kick in for the next few sessions. We have the delayed US jobs news out later and that might provide a bit of a bell weather indication of the next few sessions. I am therefore cautiously bullish today but ready to change stance to bear fairly quickly. If 6594 breaks then I am full bear for the rest of this week! Looking at the Bianca chart below the 10 day channel is pretty narrow so could easily break through either the resistance at 6725 or the support at 6636; the 20 day channel has the top at 6692 for today whilst we are still testing the top of the 50 day area – hence cautiously bull still. The EMAs on the 30 minute chart are bullish which is why I think we will get an initial rise, albeit small, and the FTSE has held up relatively well overnight.

Bottom line is that bulls have to defend 6635 and 6595 if they are to have a hope of pushing higher to 6700/6800 in the near term. Bears will be having a go at 6663 I feel, at least initially. All a pretty tight range at the moment, which is why we drifted around a bit yesterday.

96 Comments

  5. Why would anyone short this market when it keeps going higher? Look at the daily candles and ask yourself one simple question; which way is it going?

  6. Why short a strong rise. In these situations it fuels bullishness, I’ve been in this situation too many times, it will rise and knock shorters out before it declines, if it declines.
    Ps if anyone could kindly state the reason to their bearish stance it would be most enlightening.

    1. remember some guys on here have different timescale views, a short term fade of overbought is a valid strategy…

  7. … just a thought but all these “experts” who are not forecasting tapering until next year earliest, are they the same “experts” that were forecasting tapering last month 🙂

      1. Yes Hubris, they just make it up. There was never going to be tapering this year as I said all along!

  8. Looks like 6700 is on the cards, but DOW might be a game changer, anyone know when the report is out for the US?

  15. as a totally newbie on my demo account I went short yesterday @6636 massively down on profit and start up capital now. But I’m prepared to wait it out and cut my loss at a “reasonable” level.

    in my other demo account i’ve been hedging this with some short term long trading to counter this loss.

    no idea if this is a valid strategy in the real world or not?

    actually, no idea what I’m doing for the most part, apart from trying to digest what you guys and Nick are doing and applying that to my own trades.

    Worked well so far – in the first week I was up £1,500 from a start up of £12,500.

  18. Rise is due to unemployment levels falling from 7.3% to 7.2%.
    This rise which we have exp before (non farm – bad and unemployment good) don’t seem to last long, I am def looking at a pullback around 6710 region!

  19. Does anyone believe that one day, sooner or later, traders/investors and going to genuinely question whether QE is having a positive effect on the economy and not just inflating asset prices.

    When/if this happens, stock prices would presumably fall sharply.

  21. Anyone tried the IG INDEX sprint markets. Had a dabble on the 2 minutes ones on the FTSE, but very unpredicatble. Just looking for patterns when i place the bet..

  22. Interesting to see where DOW goes when market opens, might see a rise then a small sell off towards the close?
    I have 6714 as resistance.

  24. Closed FTSE for 46 pips.Good day today

    Now a 3hr drive to London, to watch Gunners beat BVB, to finish the day on a high =)

  25. Annoying, got myself in a massive loss sitting, well, I could not win for 2 month now just losing, but this one is particularly big.

    1. FFS, i was long at 6660 and closed at 6680 and went short.. now down and still holding :-/ Breaking a rule of my stop.. Got a bit too emotional on this one.. Stop at 6720

      1. got pretty lucky there, my stop was at 6720.8.. todays high 6720.7..

        lol

        Still holding, but stop moved to more comfortable level

      1. bloody hell mate ur an example of overbetting and someone who needs to learn to cut their losses small…

  27. 6714 high from 1st August. Break this and the yearly high is very much on. The FTSE is on an 11 day up run. Why oh why do I come back here and read about shorts? Not only that very little chat about where stops have been placed.

    Well played those here trading on the daily and weekly. Its good to see.

    I haven’t placed a short for two weeks now. But I have always placed my stops. So 8 out of 10 right in this period.

    Try this for a disciplined approach. Identify your entry point and where you want a stop. Place a “Stop Order” first then place the trade order. It works.

    Trade safe

    1. It does work at first, but then greed suffocates you when the market shows their greed.
      Basically when market is greedy it will push and push and when I am greedy I open my stop loss.

      1. Jack you are the most honest contributor to this board. I just cannot understated why you don’t learn from your previous mistakes.

          1. If I wasn’t stubborn or believed in myself I would have stopped trading after a year and horrendous losses. I took a few months out, read my trading notes and have returned a different trader and made money for the last 3 months.

            No more trading Jack until you believe in yourself and learn from your losses.

      2. Always happens to me, I make small profits when my stakes are minimum. When greed takes over me and increase my stakes I lose a lot! So gave up on higher stakes these days!

  28. What worries me is that it’s only 15.13, cos it won’t stop going up until the end of the day and it will push more, I just worry it will push so far that I will not be able to reach it tomorrow.

  29. I have 6812 close on 21st May Daily Chart (Tradefair +). It did spike higher but this is in range now.

  30. I am bullish generally but shorted at 6710 (but the Nov equiv contract) as there will be some profit taking here this week IMO.

  31. … anybody going long now is going to get slaughtered pump and dump going on theres a small pull back on the way no question about, it put away your charts 🙂

  32. Whilst I’m currently enjoying the rapid 4% rise this month there will no doubt come a time when the market will take a breather. Don’t think it will be huge but a dip to 6550 possibly before we make a move towards the 6800-6900 mark.

    Have to say that I did feel we would get tapering in September and if not then October. The shutdown put paid to the latter. Today’s data pretty much reduces the probability of tapering in Nov to unlikely. So it won’t happen this year.

  38. hi everyone, interested newbie here, been talking to a guy from central markerts re a spreadbetting account, any thoughts from you guys would be appreciated.

    1. Never heard of ‘Central Markets’. Why ‘Central’? Make sure they don’t take too long to find a ‘central’ value, to your disadvantage, when you want to execute a transaction. I can recommend IG Index, in comparison to some. GL

    2. Yep they call me up from time to time. I think they run a managed service if I remember correctly. They will monitor and provide advice I think. Execution though is through their recommended broker – IG.

      I never took them up as I have my own strategy and not sure what they could add – apart from another voice in the ear. I did ask if they could automate my strategy but they said no. Execution is still your responsibility.

      1. Maybe I’m getting confused. I think Central Markets may have their own execution platform. In theory the advice is a great service but only time will tell whether it is worth it.

        1. many thanks javed, jim, the platform is gtf , not sure so i might go with ig, thanks for your time guys and good luck

  39. As I wrote before, don’t be too hyped with todays jump! bad non farm and good unemployment rate jumps don’t tend to last long (as we have experienced before!).
    I am gonna start building my longs now :)…and let the market carry it to at least 6800.
    long at 6675,6650,6630.

  42. I remain short here. Only looking for 6580 as a target but am likely to close if 6600 reached. Only 60% of IG clients are short so much more even at present. If it was 90% short I’d be worried as they do like a good burn!

    1. Why is it when most of the people are, for example, short on IG you are thinking that it will be long? Do you think that most of the people there are thinking wrong?
      Can I find out where do you get this information about how many people are short or long on IG, thanks.

  43. Sold 20% of the short. Hate the big spread after hours but wanted to book some profit in case it gap filled on opening.

  44. Well, almost sleepless night, in the morning I think I’ve had enough. Am I ready to run up to a 1000 pounds loss? no, so I need to close my loss of 350 pounds that I was facing. Opened the account ready to see -600 and saw basically +20 pounds. I just got rid of that trade. I was 6668 or something. Yes, I was battered on dividends take out so ended up a total day loss of 50.80 pounds which is -17 points of my usual stake. Will it go down now from where I closed, I don’t care. Looks like it’s time for it to recover, I’m just glad to get out.
    Now I am facing a problem, where to go from there. Why am I misjudging the signals, why I took yesterday’s retracement for a short opportunity and why insisted on short when obviously by all means it was long? And how to maintain the stop loss discipline? What else to do to actually get courage not to open those b… stop losses, it’s not the first time and every time it is the same feeling which fades away after some time.

    1. Good going mate, glad you got most of your money back. Scary times when it is like that. Im a bit like you when i keep increasing my stop, very bad habit. Should set and stick to hit and take the hit. Made 10 points this morning going short so made any money i lost yesterday 🙂 Definietely going to try and trade less but more effective

      1. Yes, to trade less is the best advice. I get insecure after such ordeals, it takes me time to recover, but even so I made a cheeky 5 points on this morning spike. 🙂

        1. Jack, I hate to say this but you don’t seem to listen to sense people tell you, like trading less, larger timeframes, demo… i’m not sure you’re cut out for this, you don’t seem to understand the market dynamics. As X2WLT just said, the market is designed to make as many people lose as possible, that’s one of the ways it works… hence why it tends to go in the direction that makes no sense to most people!!

          1. You are absolutely right, I have difficulties both in emotions and discipline and I am deserved to be told off. As you are right, I am either don’t listen, or maybe to be more precise – don’t hear or don’t get it once and for all. I do get paranoid when I think that market is deliberately acting against me and that put the common sense and all the advice to the back of my mind. No good.
            As if it is part of some sort of routine to open stop losses and endure the pain. But I have to snap out of it. And the sooner the better. I remember all you said about higher time frames, trading less and smaller stakes. Well, I am blaming only myself. Hope to improve.

  45. Close all the short now. Jack there is a stat along the lines that 90% of people lose money on SB – mainly due to the effects of margin and having too large a stake size.

    I like to go against the majority and the market tends to do the opposite of what you think it should do!

    The info is under news and insight on each security.

  49. I personally think we are due a dip despite what the trend is I again would be contarian and am short ftse and dax (which is well due a drop) so was pleased this morning after scare yesterday. But dont think it will go down too far and will do usuall yr end rise. IMHO

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