Good morning. Well the long off the pivot didn’t really work yesterday morning, so flipping to short at 7060 was the right play as it turned quite bearish for a while. The bottom of the 10 day Raff at 6980 held well for a rise back to 7050 where prices have remained overnight. Twitter results last night were released early by “mistake” which saw 20% wiped off the share price at one point as they disappointed the market. Despite that the S&P managed to regain ground from its lows of 2095, though still short of the 2125 recent high. The ASX200 has had a pretty bearish Wednesday dropping 100, so I am kind of expecting the FTSE to be bearish too. In other news yesterday news of a US cargo ship being captured by Iran sent jitters through the market though turned out to be a non-US ship. UK GDP was lower at 0.3%, the weakest pace in 3 years, though not surprising really as we await the election results, and shows that the “recovery” is still pretty fragile, here and globally.
US & Asia Overnight from Bloomberg
Asian shares retreated, led by declines in Sydney and Jakarta. The dollar traded near a two-month low amid speculation that the Federal Reserve will keep interest rates near zero for longer, and crude oil slipped before U.S. stockpiles data.
The MSCI Asia Pacific excluding Japan Index dropped 0.6 percent by 1:29 p.m. in Hong Kong, as Australia’s S&P/ASX 200 Index fell 1.6 percent and the Jakarta Composite Index plunged 2.6 percent. Standard & Poor’s 500 Index futures declined 0.1 percent. The Bloomberg Dollar Spot Index was little changed after sinking to its lowest level since February on Tuesday. Oil in New York fell 0.3 percent before a report that may show record stockpiles swelled further.
The dollar gauge is headed for its first monthly retreat since June as mixed economic data prompt economists to push back estimates for when the Fed will lift rates for the first time since 2006. The U.S. central bank will comment on monetary policy later today, while Thailand is tipped to keep key rates unchanged. Japanese markets are closed for a holiday.
“Because of the poor recent economic data, the market is pretty much pushing out to 2016 now before the Fed moves,” said Thomas Averill, a managing director in Sydney at Rochford Capital, a currency and rates risk-management company. “The big sell-off in the U.S. dollar that we’ve seen over the last few weeks has reflected how long the market was. I’d probably be leaning towards more of a pause in the dollar-bull trend rather than a complete reversion of it.”
Rates Survey
Seventy-three percent of economists said the first U.S. rate increase since June 2006 will come in September, according to a Bloomberg News survey conducted April 22-24. That’s up from 37 percent in a March survey, when a majority predicted an increase in June or July.
Banks were the biggest drags on the Sydney benchmark gauge, with Commonwealth Bank of Australia down 1.6 percent and Westpac Banking Corp. sliding 2.1 percent. The Aussie dollar traded close to 80 U.S. cents, defying efforts by Reserve Bank of Australia Governor Glenn Stevens to talk down the currency as a mining boom wanes.
“There’s a temptation to take profits in these banks that have been well bid for a long time now,” Stan Shamu, Melbourne-based market strategist at IG Ltd., said by phone. “That yield trade is looking somewhat exhausted. There’s growing concern that Stevens doesn’t want to cut rates and that expectation of a May cut is coming out of the market.”
Jakarta Slides
Hong Kong’s Hang Seng Index fell 0.3 percent and the Hang Seng China Enterprises Index, a gauge of Chinese shares in the city, slid 0.7 percent, falling a second day. The Shanghai Composite Index fluctuated amid concern slowing economic growth is undermining earnings after companies from Anhui Conch Cement Co. to Yanzhou Coal Mining Co. reported declines in profit.
Indonesia’s benchmark index extended a five-day, 4 percent decline as investors weighed falling corporate earnings and Australia’s warning that a mass execution of foreign convicts will damage relations.
The value of global equities climbed to a record $72.2 trillion on Monday amid a wave of global central bank easing and receding concern that the Fed will raise borrowing costs while the U.S. economy remains fragile.
U.S. consumer confidence was weaker than expected in April, data Tuesday indicated, with a report Wednesday projected to show growth in the world’s largest economy slowed in the first quarter. Gross domestic product in the U.S. expanded 1 percent in the first three months on an annualized basis, down from 2.2 percent in the last quarter of 2014, according to economists surveyed by Bloomberg.
Euro, Dollar
While investors mull the course of U.S. policy tightening, central banks from Europe to Asia are easing to prop up growth and stimulate inflation. Better-than-estimated U.S. corporate earnings have also helped the Standard & Poor’s 500 Index up 2.3 percent this month.
The euro traded at $1.0966 following a four-day, 2.4 percent surge. The Bloomberg dollar gauge, which tracks the U.S. currency against 10 major peers, slipped 0.6 percent Tuesday to its lowest level since Feb. 25.
Gold held near a three-week high, with bullion for immediate delivery trading at $1,210.41 an ounce from $1,212.17 on Tuesday, according to Bloomberg generic pricing. The metal climbed for a second day on April 28, gaining to $1,215.16, the highest since April 7.
The yen was little changed at 118.85 per dollar after a 0.2 percent climb on Tuesday. New Zealand’s dollar slipped 0.2 percent to 76.98 U.S. cents.
Oil
West Texas Intermediate crude fell for the third time in four days, slipping to $56.89 a barrel before data projected to show that U.S. supplies topped 490 million barrels last week for the first time in more than 80 years. Brent oil dropped 0.3 percent to $64.45 a barrel.
Crude stockpiles probably rose by 2.9 million barrels last week, according to a Bloomberg survey of energy analysts. Inventories expanded the prior 15 weeks to 489 million barrels, the highest level in weekly U.S. Energy Information Administration data that started in August 1982.
E-mini futures on the Nasdaq 100 Index declined 0.2 percent after Twitter Inc. plunged on Tuesday.
Twitter slid 18 percent, the most since February last year, after revenue fell short of estimates in the first quarter, even after the company introduced new products and tweaked features to attract more people. Twitter was slated to report earnings after U.S. markets closed, though Selerity Inc., a financial news service, disclosed the results shortly after 3 p.m. in New York.
Corn futures in Chicago fell for an eighth day, the longest losing run since July, and traded near the lowest level since November as drier weather favored planting in the U.S., the world’s biggest producer. Corn declined 0.2 percent to $3.6375 a bushel. [Ref]
FTSE Outlook
If todays ASX (Australia stock exchange) action is anything to go by we are on for a bearish day on the FTSE. The bottom of the 10 day Raff at 6981 held well yesterday but any breach of this will most likely see 6900 or maybe even lower. That said, the daily chart is still bullish for the moment with the 10ema above the 25, and the Raffs rising. Bianca resistance on the daily chart is at 7119 initially. We are back to watching the Fed for clues on interest rates, though weaker consumer confidence yesterday reinforces the need to keep rates low. Todays pivot is 7039 so initial support here, but of more interest is the resistance at around the 7055, 7060 area which looks to be worth a short for a decline to the 6995 bottom of the Bianca channel area. So, short the rallies mode for the moment! As mentioned above the S&P has regained some ground but will need to break 2125 for a push to 2140 – from there, if reached, I expect some larger downside.
Support below the Bianca channels is 6981 (yesterday low) and then 6890 for the bottom of the 20 day Raff and 6864 where we have the bottom of the 50 day Bianca. Resistance is 7119 for today, though I dont think we will go higher than that, and then 7208 and 7257.
Great opening short, good call on 55/60 Nick 🙂
Thanks. Rise to 7042 from 7013 now then more downside?
I’m trying not to be uber bear but, yes, sounds like a plan.
Shorted again at 35 actually.
Covered that for 10, bear pressure off for a little while I think.
Let’s give your 42 a try
Was starting to have some doubt creep in!
Be strong young man 🙂
Actually, my bearishness is waning at the mo, just rsi covered at 30.
I think this mini rally will be a pointer for the next hour. Would be happier to short at 25 than 35, if you know what I mean?
7060 shorting area worked a treat. Bit of support now at 7013
I wish Wall street was a bit more bearish.
Good time to short then Jack 🙂 17’s today…..?
Already shorting bit by bit.
need a 15 point rally now please
i do well every morning i should just stop trading in the day and be happy with the mornigns profit . greed 🙁
our worst enemy!
think were see 7030 again today nick? even out of hrs
Try trailing stops when in profit rog, they’re a bit of a double edged sword but recently the FTSE has been moving in steps rather than swings so less of a chance of getting whipsawed.
yes i know your right i need discipline. I really hope see 7030 again today. fingers crossed need to get out this one flat!!
Really not trying to tell you what to do mate, but the market has no interest in what you ‘need’.
I am continually reviewing my positions, some would say over trading, but I’m long or short or square depending on what my view of the market is NOW. The price at which my position was opened has nothing to do with it.
Eh, I wanted to hold till pivot but thought I’d better take my 50 points now.
got also 22 points on other account
Probably too early but out at 05
Well it was a good rally, it will definitely bounce now.
why do you think this will bounce?
Look it did bounce, I didn’t say how far but it’s good to lock those profits.
exited 18084, it bounced 20 points.
Am going to wait and see if we get to 6970-75 area before trying to buy a bounce. If 7000 gives way it’s just possible that we make a small new low and bounce like yesterday back up to the pivot area for tomorrow and in time for Janet’s dovish comments at 19:00 FOMC.
If 6970-75 doesn’t hold I can also see 6940 … going to watch and wait
Picked up a little at 60, treating that as an over run. 22 points is looking tempting though.
Had two push downs – will we get a third like yesterday? I’d expect this bounce to be sold, but it’s too close to US opening. Will they try to keep the S&P above 2100?
short from 89 – looking for retest of the low. stop to breakeven.
Same here. out and short at 90
got stopped out lol … should have had my stop above the high.
one more growing. anybody short?
out on the second, pivot.
No I’m out 🙁 Missed shorting that dead cat at 12, was looking for 20
yes, it was a tiny dead cat, 38%. however it was 20 points on Dow just above 50%.
I am afraid to hold, I am afraid to lose what I am winning and close early. I am scared to hold. Don’t know what to do. I really upset myself. I told myself hold till pivot, but I closed most of it at 84 and only 1 lot managed to 54, but it dropped even further. I am distraught, don’t know what to do with myself.
Have a time out Jack, there’s always another day.
We’re all making it up as we go along mate.
🙂
Weird day. Scared all over the place. Also feel tired, didn’t have a good day yesterday. So I am stepping back for now.
im still long @ 7030 i feel sick and i cant cut it out
what affect will this 7pm 19:00 FOMC have on the ftse??
Depends on how the market interprets the statement and when the market start guessing when the first rate hike is going to occur. Consensus seems to be for September. It may be a non-event as there is no press conference to get further clues. FTSE is now looking like it’s a case of sell the rallies. It’s no guarantee but IF 6960 was the low then there is a chance this could get back to 7020 tonight / tomorrow. But I also can’t rule out 6940.
Wow!!! looks like we’re going to see 6940. Can’t believe I closed a short from 7048 at 7015 before 12pm and cashed out as i didn’t want to get carried away.
Yup – fibs work wonderfully sometimes – Looking to buy at 6940 for a retrace back up to 7000 tomorrow. Hope I’m not catching a falling knife!
and as usual market wrong-foots me again by reversing a few points above my target buy … Long at 65 looking for 7020 (eventually)
That DAX looks well broken.. More QE needed!!!
Out of short at 45
wheres next support ???
There’s only fresh air between here and 6890 ish as far as I can see mate.
40/45 might hold for a bounce, but 7000’s a long way away atm.
ive gotta get out then and take the hit aint i??
stillnot seeing 7000??? still big ask
after hours tarding maybe?? done it last night??
Whatever you do mate good luck, just have a hard look at why and try not to repeat it.
Been selling all these days, finally basking in 5 digit profits. Am sure more downside to come 😀
Good for you Sam, 7100+ was very kind to me too 🙂
Waiting for 2100 to break in spx, yanks turn to sell ?
Yes tmpf, my avg position is 7090. 😀
Market has seemed to close around or close to the next day’s pivot recently. That would be around 7000. Needs to break up through today’s down channel if it’s going to play that trick on as again.
lets see mate. best of luck i hope u are right i aint got teh pockets for this game. i only win when i sell and i bought it today out of boredom i normally wait an dpick my numbers. 🙁
An idea what todays divi is? Missing Senu already
About £4 to £5 – not really enough to guarantee a divi buy up but it seems to be heading back up.
Thanks, wish I’d had the balls to long at 45 when I covered my short 🙁
Tempted at 82 into a short closing finesse, but don’t want to spoil a good day.
probably wise – I think this depends on whether we get a relief rally with FOMC or not.
Yeah I could see that carrying on to the 90’s, but would have only been looking for 15 points which I would have got.
My trading day ends at 1630, nine hours is enough for me, and I never carry overnight positions, every day on its merits.
Where has Senu gone?
I think he said off for a month yesterday.
Ah ok, missed that. Thanks. Hope he has a good time.
Anybody going to go long now.
6950 seems like a good entry.
Still looks pretty weak. Cant believe I had a Dax short from 11860 this morning that I cut far too early! 400 pointer 🙁
6934 looks even better mate. 😉
Fortune favours the brave…..good luck.
Not a good omen when it closes on the low of the day.
For some positive spin, the S&P still hasn’t broken 2100………..
Hi nick im running a huge loss at the moment and really cant close out of it. do u see any positives at all that could push this up 2moro or is everything still looking bearish. I know you wouldnt liek to call it but hinestly what are your opinion please? and what affect could this news at 7pm tonigth have.thanks
I would normally expect a 61.8% retrace of today’s high-low. I’m just not sure if we’re in normal territory with today’s price action. As you say it’s very hard to advise. Trade with stops.
We may get a rally, but I think the risk of more downside is quite high. The close today has imo signalled a possible trend change for the FTSE that needs watching closely. End of month tomorrow , election, weak growth seems to bode a risk-off scenario at the moment. Think I may wait for 6735 – that’s where we could be heading.
what did you get in at?
Long at 40 and 45 – just for a few points
Spx to break 2100 after fed meeting? 😀
Quite possibly
This place always get busy when the market tanks! That 7100 level was the key, had a few shorts from that level, just closed one and leaving another going overnight to see if we get any further downside.
There’s FOMC for you, of course it set off long. I am taking it easy for the rest of the day, it’s been emotional but grabbed 80 points today, pheww, too scary today.