Dovish Fed 6209 resistance 6140 support

Support 6154 6146 6141 61386121 6080 6060
Resistance 6201 6209 6230 6247
Good morning. Well that was quite a fight back by the bulls from the 6100 area with that dip yesterday morning, though it doesn’t feel a very convincing rally. Gold is climbing quite steadily at the moment, up from the 1215 area yesterday, so maybe anticipating some bearish equities. Yesterdays long off the pivot, short at 6132 worked well first thing and now we still have the 6209 area as resistance. The dividend yesterday saw the buyers appear at about 15:30, giving us a rise from 6110 to 6160 so you can see its worth going long if the divi is a decent amount.

US & Asia Overnight from Bloomberg

  • Fed minutes affirmed no rush to raise, buoying yen to ringgit
  • Oil extends gains after unexpected U.S. stockpile decline

Most Asian stocks climbed after Federal Reserve meeting minutes reaffirmed U.S. policy makers aren’t rushing to raise interest rates and the yen advanced to a 17-month high as Japanese officials’ expressions of concern failed to halt gains.

Health-care and energy shares drove the advance in Asia, tracking U.S. pharmaceutical company gains. Japanese stocks swung between gains and losses as the yen headed for its longest rally since January. The Malaysian ringgit climbed as crude extended gains following a 5.2 percent jump last session after U.S. oil inventories unexpectedly fell from the highest level in more than eight decades.

While they discussed the relative health of the American economy at their March meeting, Fed officials contrasted it to the persistent risks facing the global outlook. Traders are assigning zero chance of the Fed increasing rates in April, with the odds not topping 50 percent until its meeting in December. That sort of outlook is bad for the dollar, with the yen the biggest beneficiary this month among major currencies. Also burnishing market sentiment is oil’s return to gains, with the U.S. stockpiles drop easing concern over the global glut.

“We’ve got a fairly dovish Fed, and combined with the rally in crude, we’re seeing a positive performance in markets,” said Michael McCarthy, chief market strategist at CMC Markets in Sydney. “Despite what should be an overall risk-on environment, caution remains across the region ahead of the U.S. earnings season.”

Taiwan reported consumer prices rose 2 percent in March, above expectations of a 1.4 percent gain. Updates on foreign reserves are due Thursday from China, Australia, Malaysia, Indonesia and the Philippines.

Stocks
The MSCI Asia Pacific Index gained 0.4 percent as of 1:46 p.m. Tokyo time, with health-care stocks jumping 2.2 percent, led by Japan’s Eisai Co. and Kyowa Hakko Kirin Co., as well as Korea-listed Celltrion Inc. Pfizer, the biggest U.S. drugmaker, increased 5 percent on Wednesday, while Allergan — the company it wanted to acquire — rose 3.5 percent.

In Australia, the S&P/ASX 200 Index added 0.3 percent, while South Korea’s Kospi index slipped 0.2 percent as Samsung Electronics Co. fell after reporting better-than-estimated earnings. New Zealand’s S&P/NZX 50 Index climbed 0.2 percent, rising a second day. The Shanghai Composite Index fell 0.8 percent, sliding for a second day.

ZTE Corp. in Hong Kong fell as much as 16 percent, the biggest intraday decline in almost nine months, as China’s second-largest maker of telecommunications gear resumed trade for the first time since an investigation by the U.S. government said it violated trade sanctions with Iran.

Futures on the Standard & Poor’s 500 Index were little changed Thursday, following a 1.1 percent increase in the U.S. benchmark.

Currencies
The yen advanced for a fifth day, by 0.6 percent to 109.13 a dollar. That’s the longest run of gains in three months and the strongest level since October 2014.

Japan’s currency only briefly erased gains after a Ministry of Finance official said it would take necessary action if needed and there were one-sided moves in the yen market. Chief Cabinet Secretary Yoshihide Suga made similar comments Thursday during a regularly scheduled press conference.
The Fed meeting records shed more light on officials’ decision to keep rates unchanged last month, after hiking from near zero in December. They showed U.S. policy makers debated an April rate hike, though several officials advocated a cautious approach, partly amid worries that slowing world growth could crimp the U.S. economy’s own expansion.

The Bloomberg Dollar Spot Index, a gauge of the greenback against 10 major peers, was down 0.1 percent after halting a two-recovery Wednesday. Oil’s rally bolstered the ringgit, helping it gain 0.4 percent.

Commodities
West Texas Intermediate crude added 0.9 percent to $38.08 a barrel following last session’s jump, which was its steepest one-day gain since March 16. Brent climbed 0.7 percent to $40.11.

U.S. crude stockpiles fell 4.94 million barrels last week, data from the U.S. Energy Information Administration showed, after analysts predicted a 2.85 million-barrel gain. Refineries processed the most oil in three months as output and imports slipped.

Gold for immediate delivery attempted a rebound, rising 0.4 percent to $1,226.98 an ounce following Wednesday’s 0.7 percent retreat. [Bloomberg]

FTSE 100 Outlook and Prediction

FTSE 100 Prediction
FTSE 100 Prediction

On first appearances this morning its not very clear what its going to do which makes this email a lot harder! However, we have the top of the 10 day Bianca at 6209 along with the live charts R2 level at 6208, so I feel that if we get a rise to this level then its worth a short as I still think we are due a crack at 6010 at some point soon. However, 6160 is a fairly key level and we have moved above that overnight, so the bulls still have hope that they can break and hold above 6200. If they do then the top of the Raffs are in play at 6230 as we will probably break that 6210 level. There is support from the pivot area at 6146 and the 200ema on the 30 min at around the 6140 area. So, I am thinking a long around this 6145 area,and a short off the 10 day channel at 6208ish, with the proviso that if the bulls break 6210 we are likely to see 6230 and possibly higher. They have certainly done a good (and surprising!) job of holding that 6090 low yesterday.

105 Comments

  1. Morning Fellas,
    Shorted 6200 as always and took nice +25.
    Went long at 75 with 20pt stop and now all out at 92.
    Looking to short 6200 again S20 and will short again around 6215.
    GL all
    ECB at 13:30 this afternoon

  2. He Nick that Trading system where we can auto follow your trades
    is a superb idea, any idea on the time scale?

  5. Morning all, just came across a solution to the Oil oversupply on (ii),basically they can use some of it to make new barrels that are 50% bigger than the old ones and thereby cut the number in storage by more than 50%.This would be a solution that would be entirely in keeping with other modern ways of solving problems and lead to another opportunity to go long everything.I suspect this suggestion will be accepted by OPEC later in the month.

      1. Yes,even if the U.S buys new plastic barrels from China,530million to 265million in storage is probably 100usd oil again. 🙂

        1. You’re kidding me… right?
          Making a barrel 50% bigger will not hold twice as much….
          Don’t tell me you’re actually trading with those mathematical skills!

    2. Great idea WSF.
      Also they could solve the inflation problem at a stroke, just remove everything apart from the DOW from the constituent basket. Interest rates could then go up to Wonga levels and the 1% could build more mansions out of Lego made of gold.

      Currently short at 93 8 either way, surfing for cheap flights to recharge the batteries. Sharm seems to be off the menu.

      Took 8, looking forward to a morning’s boredom, maybe another stab at 200 sometime.

      1. Morning tmfp,you’ll like this then,Div yield on ASX is about 5% at the moment,so there is an argument from them that their Mkt wont fall much further as long as Japan needs somewhere to park cash and get a return and commodoties need to be consumed.

        2. Yeah full of admiration for Australia, not.
          Other neo cons must dream of raping their country for its natural resources, creating a class of spectacularly ugly billionaires and leaving the nation with a huge deficit.
          Way to go.

          1. They have U.S military bases now as well as a property bubble so they are in the pocket for sure.

      1. Cool, I though you are taking day off after the horrible day yesterday!
        I haven’t done much this week except this morning has been decent, looking to buy 70s again for now

      2. Come on tmfp……..Your our leader…..we can’t have you feeling down…..you’ve got our moral to keep up…….. Don’t worry … The rest of the troups can take some flack though while you clean your sights and reload…..Good Luck Captain….:0)

        2. lol@anstel.
          I’m an old man I get tired. When I see the signs I walk away for a few days, haven’t got many left lol.
          Ranging markets are very much my cup of tea and it’s been a good couple of months but yesterday was a big red flag, I traded like a twat.

          Long at 75 8 either way.

          2. Hey tmfp….regarding age mate….here’s the way I see it….the number of years of age we are is an indicator of how fortunate we have been up to this point in our lives…….if we are 64 or 54 or whatever it’s how far we have come…….it’s no indicator of how far we have yet to go…….people expire at 6 or 22 sometimes when you would think they had all their lives ahead of them…..If the engines running mate and you keep on top of the servicing it’s amazing the mileage we could get….no we are either alive or dead…..if we are alive just keep changing the oil and don’t over Rev it ……hope this brings a smile to your face :0) you are the most succesful consistant trader on here my friend don’t ever forget that……get off to a beach somewhere and recharge then come back and kick @rse like you do so well……..Party on buddy :0)

          5. Hey tmfp…..have a bit of faith baby…..have a bit of faith…….that’s my oddball impression :0)

      1. Well, it can fall apart as well! Not sure ECB can do anything but I was just hoping for a rise to 6200 again!

  12. RE Dax weekly looks like 9k due,but if you try an Elliott count with July as the end of wave 1 then c could well see 10k again,if you take Sept as 1 then this is 5 and a bit over 8k is on the cards,so a short at 9k or long at 9800 or so fwiw lol.

      1. Re: weekly DAX, fwiw lower highs and lows and the recent rally failing at ~50% retracement says test the 8750 area to me, with 9300 a big deal on the way.

      2. It’s hard to get a direction that’s for sure……looked very strong out of the blocks but it’s lacking any stamina at the moment…not calling my book but I think it’s got upside personally before another drop back ….famous last words GL all.

  13. Here we are again mid 50’s. Dax holding up better than us.
    That rally was never convincing but downside seems pretty limited, maybe Nick’s 40 at a push?

  15. Afternoon, back again. Just closed this mornings short at 60.
    I have to say that the market over the past few weeks has been one of the most frustrating few weeks for me for a long time. I’m not keen on being long without a correction despite my natural tendancy to be bullish and being short along with the rest of the World seems to be a mugs game.
    Having set up that arb (still running) I discovered that IG run a differential market this morning!

  17. Chippy I have loved the last few weeks playing in this range. I am worried about where we go when we pop out of it. 6300 a year ago would have felt cheap but now would feel high of we got there.

    1. I know what you mean but I’m always nervous if I can’t see a proper move. Simply, I feel like I’m flipping a coin whereas with a bigger move I feel like I’m selling/buying something that I’m confident will happen. So swiping the odd 20 pointer here and there does no end of good for me but (like tmfp’s day yesterday) it could so easily be pissing 20 pointers each time I press the button and no doubt will be!
      Cheers and good luck.

  18. Hi guys. Opened short dollaryen at 10970 yesterday and closed today at 10846. Scared of losing profit if there’s a bit of crosswind from the ECB. But I think it’ll be one to revisit.

    Sitting on a break even short eurgbp at the moment with a wide stop, intending to hold through the statement.

    Shorted FTSE last night at 6154, stop above 6200, added this morning at 6190, closed both recently at 6143. Would probably like to short a pop this afternoon again if I can get a break from the cows!

    Long crude has lost some ground. Still sitting 70 pips to the good. Not sure what to do with it, but tempted to stick with it.

    1. Lol .. I’m long lean hogs…..I actually traded them once…..the spread was 35 dollars…….luckily they went up and saved my bacon……:0)

  23. Closed arb now, FTSE at 6149 (-23 points x 2 = – 46), Dow at 17605 (+132). Net up 86 lovely points. I’ll be having a potato based dinner tonight!
    That said, should really put some of this against poor position in VIX!

  26. A little bit of support now on the DOW, covered most of the FTSE short I didn’t bother sharing, but hanging on to a bit, I think its STB for a little while.

    1. Yeah, RSI is holding 50 on 1 min chart now.
      A long in 10s would be perfect but the range is very tight at the moment!

    1. I think we have little buying about, but trying to balance that with the DOW bargain hunters, so a small short for lows test with a tight stop

        1. Well, “they” didn’t want a low close did they? Missed the teens long too, bugger….
          Friday fun coming up, see y’all then.

  34. I’m trying to see a technical justification/excuse to get properly short (at the bottom). Just got a bit of a feeling that we could give the 6100/6080 level a bit of a go soon. So, for fun I’ve shorted a bit at 30. If anyone can give me an excuse, however small, I might let them have a bit more!

  40. Whole thing is starting to look a bit messy to me, cranked the short up at 45, looking for a proper break of the 080/100 level tomorrow. We’ll see!

    1. It’s the U.S deciding on + or – 17600 at the moment Chippy, Fed Balance Sheet at 21.30 might remind people they are overleveraged/insolvent,but watch out for Yellen tonight and an end of week move,GB Ind Prod tomorrow morning should be a disappointment though and Brexit is in the News.

  46. well be nice too see what the expert say on this sell off, with the amount of money that has been dumped into the market we should be at the moon by now… all smoke & mirrors

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