Dip to 6550 then rise today?

Good morning. The FTSE was a bit more bearish than expected yesterday, testing both the support levels mentioned at 6570 and 6550, both of which set up bounces for a few points. The bulls didn’t manage to break the 6600 area in the end. We are currently smack on the bottom of the 20 day Raff channel which could set up the bounce, also the S&P could bounce from its current level to 1710. If that latter doesn’t then 1688 next stop! We also have the T3 coral line on the daily at 6540 currently, so a few bits of support for the bulls. Draghi was speaking yesterday, addressing the European Parliament, he said: “We are ready to use any instrument, including another LTRO if needed, to maintain short-term money market rates at a level which is warranted by our assessment of inflation in the medium-term.” This is on top of the billions pumped in in December 2011 and February 2012. To make him say that makes me think something is brewing and as we all know the Eurozone still isn’t out of the woods yet.

Asia Overnight from Bloomberg

Asian stocks dropped, dragging down the benchmark gauge from a four-month high, as Japanese exporters retreated amid a three-day gain in the yen. Copper fell, while precious metals rebounded.  The MSCI Asia Pacific Index lost 0.8 percent at 1:33 p.m. in Tokyo, heading for its biggest decline in four weeks. Japan’s Topix dropped 0.7 percent and Standard & Poor’s 500 Index futures slipped 0.2 percent. The yen has gained against 15 of 16 major peers since last week, while Indonesia’s rupiah fell to the weakest level since 2009 against the dollar. Copper sank for a third day as gold and silver rose.

The U.S. Senate is considering a measure passed by the House on Sept. 20 that would cut off money for President Barack Obama’s health-care law while financing the federal government through mid-December. Data today may show U.S. home prices climbed in July, while Germany’s Ifo business climate index probably rose for a fifth month in September.

“The increasingly ugly debate on the U.S. fiscal position is certainly a primary concern for markets,” said Angus Gluskie, the chief investment officer at White Funds Management Ltd. in Sydney, where he helps oversee about $500 million.

Debt Ceiling

New York Fed President William C. Dudley said yesterday the U.S. economy “still needs the support of a very accommodative monetary policy,” while his Atlanta counterpart Dennis Lockhart said policy should focus on creating a more dynamic economy after a recent cooling in growth. Fed Bank of Cleveland President Sandra Pianalto speaks today.  Government funding expires Oct. 1 and the Treasury is expected to exhaust its ability to borrow funds in mid-October, when it will reach the statutory debt limit. The White House said Obama would veto the House bill and Senate Majority Leader Harry Reid said the bill is “dead on arrival.”

Outlook

ftse 100 prediction
ftse 100 prediction

The FTSE had a decent bounce at the end of Mondays session and after to rise 20 or so points and I expect that we will get a bit of a bounce today. We have already climbed a bit at price was 6551 when I started this email and its now 6565. I have put a zig zag rise on the prediction for today as I expect some resistance at the levels mentioned below and the ProTrend line at 6585. I don’t think it will be an easy day for the bulls, if they do manage to bounce off this 20 day Raff channel. The key will be breaking the pivot and the 6570 area for the bulls to push on. If the bears get their teeth into things and the Raff breaks then we could dip to 6510 bottom of the 10 day Raff (6508 is also S2), or break 6500 to test 6473 being S3 for today.

72 Comments

  2. Hi Fellow FTSE Day Traders,

    Just a question, has anyone here ever managed money for other people? I say this because I’ve worked out that it would be mutually beneficial for me to manage other people’s money as well as my own. I’ve had 24 profitable months in a row, and have hit my points target every week for the last 53 weeks. Given my track record, I’m confident I could just as easily manage larger sums than I currently am. I’m amazed that people I know don’t offer for me to manage their money. I’m up about 25% so far this year. Sorry if this sounds like a boasting post, but I’ve been doing this instead of my old day job for over a year now, and it all seems to be going well. Any advice would be welcome

    1. You would need to be FSA registered at the very least. I imagine there is a load of other hurdles to set yourself up as a hedge fund!

      1. That Tim guy above is a charlatan. He posted exactly the same post a few months back….May/early June I think…obviously in the last 4 months he has not made any more gains on his alleged 25% to date this year.

    2. There are a number of barriers to starting up a hedge fund but there is no harm in starting small though. In fact it is essential. Maybe put a business plan together for your friends and family to invest showing your returns, trades and policies. Probably a maximium of 5 investors in total and see how that goes for 1 to 3 years. After that you may be ready to move onto the next stage.

        1. Senu – I’m not necessary that sensitive to levels as such. I would be looking for a 1% dip here to around the key level of 6517. However if we don’t get it I would still go long, per my strategy, at the end of the month. Of course my trading strategy is probably different to yours. I am targetting another 2.4% till the year end to meet my targets.

          Good luck either way

          1. Thanks Javed, I am very much new and just doing intra. Gone long @ 6570, so wanted to confirm, whether we see any dip today. Thanks again

    1. I am although USD consumer confidence out at 3pm UK time. Hoping this pans out a bullish day. Fundamental vs. sentiment.

  6. Hi Tim,

    What you have to also remember is when you trader larger lots £pp etc this can seriously screw your trading mentality. Not saying it wont but once I get to a certain £pp can have an adverse effect on me. Other option may be to join a hedge fund that’s willing to give you a try based on current account proof etc.
    regards, stucaw@hotmail.com

    1. Agreed, as can playing with other people’s money. That’s why I suggested to start with small steps. Investing friends and family money can be incredibly challenging. Come through that with most of your friendships intact and you will be ready for anything!

  8. 6 Months ago a poster here was telling us how he was £40k down and most of it was his fathers money!!

    I will leave it there.

    Trade safe

        1. The Yanks are very good at that!
          But serious question – can you trade the FTSE without trading or at least having a view on US markets? Otherwise trade upto 12am and then close.

  10. Not doing FTSE lately…dow 100% NO!! Ftse stuck in a range…more equities…banks and miners….getting hammered on Facebook short from around $40 a few weeks ago…now near $50…just straight up!!! In July we were in the $22-$25 range!!! Talk about overbought!! No sign of it coming down…the most manipulated stock in U.S. at the moment. Most got out at it’s IPO of $38 or so after a year…fell to $17 a few months after IPO.

  11. That Tim guy above is a charlatan! He posted exactly the same post a few months back (May/early June)….obviously he has not made any more gains on his alleged 25% to date this year a few months ago…enough said 😉

    1. Not sure what he wants from us. We are all capable of losing our own money;-)
      Just go and do it if you have a good idea Tim…

  13. Well Nick, it doesn’t look like we will get the rise today…..I told you the Casino doesn’t like you lately…lol

    1. To be fair to Nick…it is pretty hard to predict the FTSE lately…it’s sort of stuck in a tight range…and cannot make a decisive decision up or down…hence why I am trading other instruments mostly…

  15. Hi Tim,

    Natwest bank…a/ac number is 87643566 sort code is 34-55-64..

    If you give me your bank details I will transfer by CHAPS the amount of £65k in sterling so that you can manage my money, as you have been very successful trading the markets for the last 2 years. I trust you to make a good return by Xmas.

    Looking forward to hearing from you…by any chance are you related to Dola? 🙂

    1. Haha – well if £65k is floating around – can I be first on your xmas list please? I am up 6.6% /(Leveraged 95%) – no bs! I’m sure that is dwarfed by most here -but the key is to stay in the game and be able to repeat it.

      Not a great year – a few trading mistakes but will take it if I can hold onto most of it plus a little bit upto year end.

      p.s I work on 2 & 20% basis like most hedge funds……haha

        1. Haha….Eid Mubarak in advance then……that is gonna be one fantastic Eid…….oh well if you ever want me to lose your money…..you know where I am…….

          1. Javed, I would trust you with my money any day rather than this Tim charlatan. Eid muburak to you as well 😉

            Eid is on Tues 15th insha allah. Then I am off to my regular haunt..hill walking in the Scottish Highlands…probably the Knoydart region and Assynt in Sutherland. And if time Torridon. So Scotland pencilled in for Fri 18th Oct-Sun 27th. Looking forward to some climbing and wild camping and to refresh my brain before a ‘final assault’ on the markets in an attempt to salvage something of this year.

        2. Javed..I would rather go £140pp on the DOW for a final throw of the dice than give it to this Tim charlatan 😉

          1. Have a good trip – always wanted to go to the Highlands – haven’t managed it. Rather than spending time with Dola in the hamptons next August I will try to go there.

            Always good to take a break, recharge the batteries and think about what could have been done better. The market is no one’s mistress, it’s a biatch to everyone at sometime.

          2. Scottish Highlands is amazing Javed..if you ever get a chance go!! I have been going there for over 20 years..Isle of Skye Cuillin mountains is particularly amazing and so is Loch Coruisk.

            Torridon mountains were used in the film Highlander so was Trotternish peninsula and the ‘Inaccessible Pinnacle’ on IOS.

            If you type in google Torridon mountain pictures and Isle of Skye Cuillin mountains you will get a flavour of the scenery. Inverpolly NNR in Sutherland is also amazing. Or go to Colin Prior’s website..he is world renowned for taking stunning Scottish mountain pictures..

            Another 3.5 weeks for my holiday can’t wait 😉

  16. Errm anyone care to explain what caused such a dip….i had a short order at 6593 🙁 i always miss them by like 5-10p..ahh well

    1. before i forget does any1 here work full time and also day trade..because im gona be starting uni again from next week-and kinda just wanted tips on how to juggle the 2?? thanks

      1. Yes I’m sure quite a few do – those who haven’t yet managed to live the dream (ok all of us then).

        You can do it 1 of 2 waysin my opinion – either set up your trades before the day begins with limits, stop losses etc and monitor during the day on your phone but don’t spend every moment doing it….otherwise you will end up like Jack (no offence intended).

        Or you choose a strategy that doesn’t require that much daily monitoring. I chose the latter…..in fact if I could just check my positions every month I would be happier and a better trader! Better still get if only I could have a automated model to send trade instructions to my broker.

        1. Hit the nail on the head Javed. Don`t keep checking trades keep the stops in and take any reasonable profits as due to volatility you`ll lose them. My average during university would be like 10-15 points for the day which I more than happy about, rather than let it run in the hopes of getting more points and eventually losing `potential` profit.

      2. It’s all about finding the correct timezone Deez. How about trade the final hour of U.S. at 8-9pm UK time? Big movements then. Big boys..institutions …hedge funds.

        Japan opens 1am…if no morning 9 am lectures…or how about London and Asian crossover say 6am-8am…forex as well…??

        1. Or best of all, stick to medium term or longer term position trades…1-2 weeks or 2-4 weeks etc….obviously size has to be smaller to accommodate the longer time interval. Or how about setting text alerts on your favourite instruments for buy and sell etc?

          2. i never really thought of that…im still educating myself when it comes to all that stuff- but thanks anyway appreciate it, or maybe i might just leave it to tim

  17. Deez I am university also, and I day trade. I trade free mornings and weekly trades, as it is just too much, trying to daytrade whilst you`re working.

      1. yeah i think itll be best just doing mornings and evenings, i think i definitely need to be more disciplined with regards to constantly checking my positions.
        Mathematics and Digital media Tech
        Really appreciate all the replies 🙂

        1. I`m studying law at University of Birmingham, biggest bullsh**t of a subject. Was personally very interested in the market/economy as my dad was 25 years into it but obviously my interests are second lol.
          Maybe i`ll be able to pay of my student loan lol?!

          Btw just to make it clear, I trade cause most of the time it is enjoyable and no I do not make the thousands of £ you guys make. Avg – +200GBP weekly. Is more than enough.

          1. Hi Ahwab,

            Law? LL.B?? Did that at Leeds University some time ago…enjoyed it. Some mandatory subjects for a QLD were a bit dry, like equities & trusts, land law, and E.C. law. But I enjoyed most of them, particularly tort, contract, evidence, & employment.

            Did bar course after (then called BVC) at ICSL-London. Got called to the bar-Lincoln’s Inn. But…..didn’t get any tenancy in any real ‘good’ set of chambers. Too competitive at top end. Google magic circle chambers-Brick Court.. Essex Court..Blackstone..Fountain Court..1 Essex Court..all stuffed with the same common denominator…1st class degrees from Oxbridge and BCL/LL.M (Oxon/Harvard) and nothing else…not even U.C.L or Durham or other Russell Group at this level.

            Then again after pupillage these guys do start on around £150k approx in their first year and within 5 years or so are easily earning 300k+. By comparison working as a criminal barrister the earnings are paltry. A CPS senior prosecutor in London earns around £40k average, and a junior one just £30k. Family law and common law earnings at the bar after 5 years of tenancy are around 60k-80k…minus 25% chambers expenses.

            Regards economics. Trust me. I read economics first before law, at a trading level, you do not have an atom of advantage. In the old days maybe, when markets were dictated by ‘fundamentals’, but nowadays especially since Lehman’s 2008, it’s all sentiment and headline driven and ‘tricks’…i.e. a big ‘ponzi scheme’ 🙂 Just look at Facebook lately from last year!!

            Also, investment banks are now reducing the size of their trading desks and going automated…..HFT ALGOS !!!

            Good luck trading Ahwab..let me know how you get on with law. How many years left?

        2. Good luck with your maths degree and trading strategy Deez, whichever one you decide to adopt. Whatever you do…don’t adopt the Dola strategy of £140 pp on the Dow. Keep us all informed 🙂

  19. Well, it’s a nice long but I thought, it will definitely drop tomorrow and everything will start again and I recovered two thirds of the account and this is the amount I had 2 month ago so I’d better start again. Cos if I don’t close now when it shows signs of exhaustion I may regret tomorrow when a pull back to some short areas will occur: I may regret it later. I was out of control really and was dependent on this long, no stop loss (it was my account really), but then I thought: Do I really want to lose everything when I can come out and return to my usual stake tomorrow??? (I had a double stake running right now). I will feel comfortable having new stop losses and be more in control and will gain it all back bit by bit having fun really rather than being uncertain to what is going on.
    No regret no remorse. Yes, I lost a lot, as it was a double stake, plus fees: I lost 120 points. The rest of the account covers 250 points so I can survive, I hope. Another day, another play.

  20. Well done Jack.
    Good little dip in the Dow at the close. May be the theme of this week….a little weakness.

  21. Mentioned this last friday, This is Fiscal Cliff Week for US. Expect a general down week, all week until they come up with new solution. (If they do lol).
    Nice call today Nick, though I thought you were going for too many zig zags :).

  23. Not trading for rest of week…got guests coming tmrw from Stoke-on-Trent. Monday now. Will have odd look on smartphone. GLA trading.. 🙂

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