Dip and Rise today, 6580 support, 6629 and 6671 resistance

Good morning. Well we got the dip and rise yesterday as expected, though the bears tried to breach the 6550 level, hitting S1 at 6533 instead, before the bulls came charging back. They managed the upper resistance at 6620 before running out of steam, but a lot of the rise was thanks to Putin saying that he wasn’t going to risk a military conflict with the West. Its a fairly big today with Yellen and the Fed takingcentre stage, and the associated taper announcement. They are in the tricky position of continue to taper and thus sending the message that the financial system is in rude heath, but data suggests otherwise; or no taper again and they think its not quite so robust! In the UK we also have our budget today, the theme of which I expect will be pro business, recovery going well, and plans on track but not out of the woods yet. Along those lines anyway!

Asia Overnight from Bloomberg
Asia’s benchmark stock gauge fluctuated as investors weighed the prospect of further sanctions against Russia and awaited the Federal Reserve’s policy statement. Japan Display Inc. sank in its trading debut.
The MSCI Asia Pacific Index rose 0.2 percent to 135.34 as of 1:12 p.m. in Hong Kong, after falling and rising as much as 0.4 percent earlier. The U.S. and Europe pledged more sanctions against Russia while President Vladimir Putin, pushing to annex Crimea, said his country didn’t intend to further split Ukraine. The Federal Open Market Committee will end a two-day policy meeting today, after data yesterday indicated the U.S. home-building industry is stabilizing.

“Investors still remain highly cautious,” Matthew Sherwood, who helps manage about $25 billion as the Sydney-based head of investment markets research at Perpetual Ltd., said by phone. “Risk assets have recovered most of their lost ground since the Ukraine crisis was sparked a few weeks ago but there’s still a lot of volatility. The Fed will probably water down their forward guidance and keep U.S. interest rates low for at least another 18 months.”

Fed Tapering
The Fed will press on with cuts to its asset-purchase program and switch to qualitative guidance for assessing interest rates, according to economists surveyed by Bloomberg. The FOMC will further scale back its bond-buying at the meeting, reducing purchases for the third time by $10 billion to a $55 billion monthly rate, according to the survey done from March 14-17.

US Futures
Futures on the S&P 500 were little changed today. The U.S. benchmark index climbed 0.7 percent yesterday as housing data bolstered confidence in the economy.

A Commerce Department report showed housing starts were little changed in February after declining less than previously estimated a month earlier, indicating the home-building industry is stabilizing after bad winter weather curbed construction. Permits filed for future projects increased 7.7 percent to a 1.02 million pace in February, the most since October.

Russia
Russia cemented its claim to Crimea as Putin showed no sign of backing down in the standoff over Ukraine’s breakaway Black Sea region, prompting Western leaders to vow further sanctions this week.

Leaders of Poland and Estonia, two of the countries on the front line of turmoil in Ukraine, told U.S. Vice President Joe Biden they want a more aggressive stance toward Russia. Biden is on a two-day trip to the region aimed at assuring North Atlantic Treaty Organization allies that the U.S. will support them against any attempt by Russia to encroach on their territory.

FTSE Outlook

FTSE 100 Prediction
FTSE 100 Prediction

I am still bullish for the moment and think the market is heading up for the moment. As such if the price dips to the support levels today at 6555 and before that 6580. The only slight concern I have is that we are still testing the top of the 10 day Bianca channels at 6594, and the 20 day Raff at 6625. However, we could be seeing a bullish breakout if that 6625 is exceeded as well, with a rise to 6670 likely (top of the Bianca 20 day).

I don’t expect Yellen to do anything to spook the market today and Osborne’s budget should be fairly upbeat (they are purely focussed on winning the GE in 2015 so will not want to upset the apple cart to stay in with a shout).

With support at 6689 with the daily pivot and a slightly more round number at 6580 I think any initial dip to that area will be a decent buying opportunity, though the EMAs on the 30 minute chart are still in a bullish mode (just).

84 Comments

    1. Someones knicked my Name! This is not the same “David” that has posted in recent weeks. Ill now adopt a more unique Alias which is DavR0s’

        1. Hi – no worries at all. I must admit i should have used a more unusual alias so happy to go with DavR0s in case other David’s come along! Cheers

    1. No free cash – not much room for manoeuvre – empty rhetoric – economics of the kindergarten – market falls. Just a blind guess!

  7. My strategy is in slight bear mode.. more than yesterday.. but annoucements lile the fed one today can change it.

    1. That was a genuine “buy” order placed by institutional trader, but cant see anywhere if that was a big booboo and someone lost a lots of money. As you can see it went straight down where it started. There is two explanation : 1) mistake, so they bought and quickly sold but still lost money or 2) they bought and there was tones of other traders shorting the market at those levels so they still lost money…lol

  10. FTSE looks weak today. Other than a poss spike on US indices I think we drop from here. Possible 6400-440 area buy target.

  13. im getting more n more bearish..
    quite close to becoming fully bearish.
    cannot say for sure right now need a bit more time.

  14. I don’t understand why the FTSE is holding back the budget has some good bits in there for longer term, the DAX and Dow are doing well yet the ftse is stuck in mud.

  16. Bloody meeting come out stopped back on a long chasing back my losses not clever cant understand why the ftse isnt in the 6600+ range.

  17. can anybody confirm that spreadbetting is going to be taxed at 10%
    apparently something to bring in alignment with other forms of gambling

      1. IG share price currently unchanged (slightly up) so the market doesn’t seem to think so – well that’s my take anyway

        1. Do you want to say that those who win in CASINO (hohoho) will have pay 10% of their winnings? This is unreal: Who wins in casino?
          I doubt that spread betting will be taxed. It’s hard to make any money here.

    1. Yes looking more likely. 6620 and 6580 were the key levels for me today and I mentioned earlier that I was convinced the current 3-4 week was not quite done yet. Am looking for it to bottom out sub 6500, ideally 6400 before rising back to 6800+ I suppose the fed meeting could change all that but will be astonished if they dont just go for another 10b reduction and if that is the case I dont feel this will have a major effect as that what most people are expecting. So question is now do we close below 6580 for today.

  20. Anyone seen Nitup V today??? just wondered what has happened to his 50 points up today??..lol

  21. I’ve been cheering on the FTSE’s lift-off from 6500, but I am alert to the possibility of a reversal even so. It is plain to see that the Dow is having trouble recovering from its drop of more than 1000 points between the second half of January and early February of this year. Plain to see too that this first quarter has produced a series of descending highs which could soon challenge the existence of the bull market dating from the first quarter of 2009. A downwards breakout cannot reasonably be dismissed at this stage. A North American correction would have international repercussions, not least upon the FTSE.

  22. What projections do you have for the downside Jim? I’m short at 6580, 6600 & 6620 from last night and was looking for a break if 6497 which could lead us to last years lows
    GG

    1. I’m certainly paying attention GG to today’s fall. Looks like negative momentum is developing, putting 6500 or thereabouts within reach. If that level goes then I guess we’ll be looking at some serious and widespread downside, which could easily take the FTSE down to ≈6000. Surmise at this stage. 🙂

      1. How do you get to 6000 – that’s a long way down from where we are. There is precedent for reversals like today which would take it down to 6400-6450. I try not to make predictions as the market will chose when it wants to bottom and reverse. I am more looking to buy now so want a dip so would be delighted with 6000 but we would presumably need a bad event to shed 500-600 points from here. What do you have in mind?

  23. China – Growth, USA Tapering, China vs Japan territory issue, conflict in middle east, Russia, Europe growth not that strong just a few reasons market might fall!

  26. this is good news for the bull market. int rate to be held back till 6.5% unemply
    very dovish 10b – as expected. so feds unexpectation is nearly solved for a month. so after yellens statement – all uncertainty is out of the way. now there is only one way and after kneejerk reaction down – final chance to buy for a 500 point move up. i would say – buying area is at 6540 then one way.

  27. everybody is bearish. probably the best sign for a bottom. this looks like one more positive factor. all bullish scenerios require a shakeout and we are getting it now. looks like bulls are getting very good prices. this is really what the books say. final shakeout its going to take only 200 pips for dow to get above 7th march

  28. So where are US going from here ?
    A consolidation day for more upside or a reverse and another lower low ?

  29. 1878 highs very close
    i think once dow & s&p get going – its going to take ftse with it. estimating the reaction we should see 6620 gap up tommorow. then continuing the leg up i would say based on previous weeks – we should see 6720+ by end of tommorow. so we will be in line to my estimate for april

  30. What was that sudden drop on Dow? Hate when it does so unexpectedly without me at the screen.
    Plus, what does it mean that Bingo duty was halved to 10%, will it affect the markets? I mean, will we have to pay duty for our winnings in SB?

  31. No trade today until now large short on usd/cad @ 1.1238 stop @ 1.113 let’s see how it go’s.

  32. Close below 16207 in Dow is pretty bearish-Nitup I hope you’re buying those 6540 like you advised
    GG

  33. Havies says:
    March 17, 2014 at 2:04 pm
    Yup,

    Long FTSE, Dow, Dax and s&p.

    Had to slightly re-evaluate my entries, but all good. Will target 6800 on FTSE before I will consider another swing 😉

    Gl mate

  34. Havies

    I suppose the move down in markets at 7.15pm – was traders buying the market.
    Remember the spike on Tuesday – oh yes it was caused by people shorting

    So are you targetting 6800 still before you evaluate your swing ?

  35. as i said yesterday – buying area 6540
    as you can see – correctly anaylsed
    from now on – the low has been set.
    now only buy. from now on we should
    move higher in this bull market

  38. Luan
    It’s stupid dogs that don’t let go of sticks…..May I remind you that you were also the all knowing one that said company’s paid millions for these algo traders as they were so hot. Well in my eyes and using simple maths, he bought 3200 @ average price of 6670 and it’s now 130 points lower- good call, I wouldn’t employ him!
    GG

    1. GG

      You obviously did not understand what i said.
      the algo bought at 6610 with an order to exit at 6670
      so what is this 130 pips lower you are saying

  42. Sold 50@6640, looking for a break of 6497-16207 has capped upside in the Dow for me. Wait and see I guess?
    GG

    1. Do you really think it will go lower than 6497 ? if it does then where do you think it will go to ?
      I just shorted now – 6528

  44. as i said yesterdays move down was a knee jerk reaction
    as you can see the dow or dax in not following ftse
    that only says one thing – this ftse move down is because
    of yesterdays budget – insurance & pension providers are
    going down
    but soon the bull rally will start again

  45. Luan
    I do understand, the order was to buy up to 6700 which it did and traders had offers selling into it, no where on the time and sales would it indicate that he would have had the opportunity to sell even 20% of this order back-in my opinion they will probably be trying to reverse this order now or soon which will cause more volatility to the downside-really good these algo programs! The thing I agree with Havies on is your tone Luan, I hope you don’t have a large nose, as you seem to look down it a lot at people
    GG

  46. It’s a good short Sally but if I were you I would but half back now and run the rest. Some people are looking at 6500 as a decent support area and may see a jump back up, or put your stop at break even
    GG

  47. Does anyone view this as a massive game changer and reverse in trend for Euro/$ heading back towards 1.35 and eventually 1.30?

  48. people are risking selling. i just want to make people aware.
    as i explained this market is going higher , much higher than anybody is anticipateing. sellers will be holding a losing position sol at the lows of the market

    1. I think it will go back up (though not to the extent you say) but why would I buy now when the short term trend is down. I want to be buying at 6400 or 6450 not buying now whilst it is falling….

    1. only few comments above you said that the lows were set at 6540! so how come we drop another 20 points??

  51. Still Bull, the dip is giving me opportunity to add more.

    Thought Luan said this was only going up???

    I guess we have to accommodate for all sorts of people in this world, otherwise it would be boring 🙂

    Gl every one

    1. Its a good and apt statement you make of yourself

      Havies says:
      March 17, 2014 at 2:04 pm
      Yup,

      Long FTSE, Dow, Dax and s&p.

      Had to slightly re-evaluate my entries, but all good. Will target 6800 on FTSE before I will consider another swing 😉

      Gl mate

  53. I bought 10 at 6540 and 10 at 6520
    when it reaches 6560 i will buy 10 more
    I will then buy at 6580 but critically
    my biggest buys will be at 6600

    1. You have been nagging about buying for days because the market can only go up and YOU only have those two possession long, which look like only bought today??!!!!

  54. I agree with Adam, why did you not buy 6600 and 6580 yesterday? And that guy Putin, you said was sorted, well he’s massing a load of troops on the East Ukrainian border
    GG

  55. Getting back to the real world, June futures just touched 6440 which is a big level and the market has bounced quite neatly. I have covered half my short from 6540 in the cash and will wait and see if we retest this level. I am very bearish but for the bulls this test of the 6440 level in June is, in my opinion, the first +ve sign on this move down
    GG

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