Dip and rise today?

Good morning. Thank you for all the emails and kind messages following my hospital visit. All went well and I was able to come home on the evening of the 24th so back home in time for Christmas. Still all looks good for the 6800 year end, possibly more. Obviously its going to be a pretty low volume day today so the price might be a little jumpy, and movements will be exaggerated.

Asia Overnight from Bloomberg

Asian stocks climbed with metals, while the yen weakened to a five-year low against the euro, on speculation the Bank of Japan will sustain monetary easing, while an improving U.S. jobs market allows the Federal Reserve to taper stimulus. China’s money market rates fell.

U.S. initial jobless claims declined more than forecast last week to 338,000, underscoring confidence as the Fed begins slowing its bond purchases amid improving economic data. Japanese Prime Minister Shinzo Abe drew criticism from China and South Korea by visiting a war shrine yesterday.

“The U.S. data has been coming in quite strong since the Fed decided to start tapering, while the market has expectations that in Japan stimulus could be increased,” said Etsuko Yamashita, the chief economist in New York at Sumitomo Mitsui Banking Corp. “A lot of people think dollar-yen will keep pushing higher.”

“Overall the U.S. recovery seems to be doing well,” said Andrew Sullivan, a Hong Kong-based director of sales trading at Kim Eng Securities. “There is the worry about the impact of export sales to China from Abe’s visit to the war shrine.”

“Given what’s happening in the U.S., the performance for Asian markets has been a little bit disappointing,” said Khiem Do, the Hong Kong-based head of Asian multi-asset strategy at Baring Asset Management Ltd., which oversees about $60 billion. “U.S. economic data continues to surprise on the upside whereas data in Asia is in line with expectations.”

U.S. consumer confidence climbed last week to a four-month high. The Bloomberg Consumer Comfort Index rose to minus 27.4 in the period ended Dec. 22, the fifth straight gain. The S&P 500 is up 29 percent in 2013, the most since 1997. A separate report showed Japan’s industrial production expanded less than economists forecast last month.

FTSE Outlook

ftse 100 prediction
ftse 100 prediction

Today’s pivot is 6692 and as we are currently above that I expect that will act as initial support on any dip. After a decent bounce from the 6400 the bulls are still in control and the top of the 10 day channel on Bianca at 6761 is a likely target for today’s rise if there is one. After that the top of the 20 day Raff channel is 6820 so the next area to watch. We are above the 20 day Bianca channel at 6701, but with some Santa rally action and low volume we will probably stay above that for the moment.

The key level will be to hold above the 6725 resistance that we have had pencilled in for a while and is the thicker red line on the 30 minute chart below, preferably with a close above that today. There is a 30 minute channel with the bottom at 6680 and the top at 6750 which will be worth trading off if you are trading today

90 Comments

  1. Currently got 11 lots of longs on the ftse, all adding up to a large stake. Looking for a 6800 at the moment, but as its a low volume day not expecting much upside from here today. Definitely agree that 6720-25 is key today.

  2. Has whats your take on the shooting star on the FTSE on 24th?
    I will think we will drop back once Dow opens as 16500 is going to be hard to crack.

  6. Now just sold it all. Will get back in if it falls off 20 pts. If not then no trade for a while. It’s been a good run

  8. We will probably reach 6900-7000 before we need to start shorting. Don’t think it’s a good idea just yet?

  10. Senu I have been in since before the fed decision and bought on the way up. Sold on Friday at 6707 as it felt toppy and had a large profit to protect. Instantly regretted it and bought back in yesterday at 6726. All Jan contracts so not sure what cash prices these were. want to get back in on a pullback.

  15. I’m in and out of this like crazy at the moment. Just sold again. Is anyone else still holding their long from the Fed decision as well as Hash?

  17. Yep – I am still fairly heavily long. I think this will rise until early January. 6800 looking very attainable now – hopefully will overshoot it too

  18. The reality is that someone has a big money on FTSE to close 6800 year end. They will drag it there no matter what!! When the volume is around 100M shares traded on a day instead the normal almost 600M its very easy to manipulate the market, for the big boys its easy done!

  21. I was long on dow, but got closed out at 16500. Had 3 profitable trades on it this week alone
    Would say that 16470 is a good area to long the dow, and keep longs. Nfp day on the 10th jan is the next time we will need to short everything.

  22. I went long on dow at 16503. I dont no what to do should i close or leave it open.
    doing well on ftse 150 pip profit

  24. Looking to open a trade on dow at its open on monday. Also going to reopen a long on ftse before it closes tonight, because it will jump up on open on monday.

  26. Neither would i. Its pure bull, and 2bf 16500 is only a psychological barrier which was broken with ease at the open today.

  30. The tea-leaves are saying to go LONG on the FTSE (one leaf) and to go LONG on the CAC (2 leaves)… hmm… 🙂 So maybe 6800 before year end then? Hmm….. 🙂

  31. I haven’t traded for ages. Christmas and all that.. Yesterday looked at charts and was shocked. That is Christmas Rally for sure and it keeps rising like the yeast. Cannot believe a week ago it was 6400…. Oh, well, I will start trading in the new Year. Happy New Year to all of the traders on this forum!

  32. While I am bullish for the FTSE to reach and exceed 6800 in the next week or so I do think that those expecting a gap up and quick rise to 6800 will be disappointed. The last week has been exceptional and due in part to low volume. When, on Monday the traders return to their desks I think we will see a small gap up followed by a drop to 6725 area where it will find support. I believe it will then rise to the 6800 area on Tuesday and Thursday.

    Regardless, by looking at the comments on this page most of us have been long for at least a week and have made some green. Anyone looking to get in on this last little ride up to 6800 would be wise not to long at the open on Monday. Good luck to all and Happy New Year.

          1. But if it gapped down 10-15 points, what then would you be thinking?… hmm… it’s on the way down lol And assuming it will go up? Obviously you don’t want to end up getting flushed out before it makes its move up, but on the other hand you don’t want to miss the train out of the station either. Timing an entry point/exit point is everything… hmm 🙂

          3. Still, it does look like it is heading up/being pushed up quite steeply – there is a ‘channel’ top on the 10-day at 6860… hmm 🙂

  34. i got a million dollar question.
    We have been talking about 2013 ending with 6800+ top. Have we any belief to speculate that 2014 will pull the ftse higher than 7000 and much beyond to even 7500 or not? Or are we just speculating at 7000 as the ultimate top?

  35. John there is nowhere else for the money to flow so I think 7,000 is conservative for 2014. Interest rates will be low for years so no return in bonds, gold seems to be tarnished, and money is exiting emerging markets. Japan equities are still fair value I read but the US will continue to motor I feel dragging the ftse with it. Just my thoughts. I am hoping for 6850 in the next week as the shorters come in at 6800 and it pushes that bit further.

    1. I agree with your outlook but my concern is that many FTSE 100 members are already looking overpriced. Will institutional investors really want to buy in at these prices? Even if we exceed 7000 in 2014 (which I think we will) I fear that if we dont first see some consolidation down to 6000-6200 then any rise above 7000 will at some point this year will end in one hell of a bang.

      1. “FTSE 100 members are already looking overpriced” — Do you have a few examples please? My instinct is that after a sluggish second half there’s very ample room for growth.

  51. Seems to be some support on the ftrs around 6680/85, but expect we will see more of a correction later in the week.

  53. I am trading using plus500, I cannot map a consistent relationship between their UK100 and the FTSE.

    Can anyone advise?

    1. We still did not reach the 6710 level and you are talking about 6652 ?
      Price is now reacting to a support area 6725-6730

Comments are closed.