FTSE 100 Resistance 6889 | Support 6803 | Asia declines | Oil glut with US stockpiles

FTSE 100 Support 6814 6803 6799 6749 6710 6699
FTSE 100 Resistance 6830 6832 6840 6889 6905 6944 6948

Good morning. Despite the large divi there wasn’t much of a last minute rise from the divi hunters. Probably as many people have wised up to that particular move now, so the market is just toying with everyone. I did do the One Touch binaries in the end as they were cheap to buy at around 7/8 points though they didn’t work in the end. The divi was mostly priced in with the rise at 12pm from 6825 to 6860. Yesterday the 2 hour chart capped the rise at the 6864 level where we have the Hull moving average resistance – if it hadn’t been for the divi then I would have held that 6857 short for a lot longer. The Dax just missed its order level by 3, whilst the gold trade yielded some points. A mixed bag yesterday, with the FTSE being fairly flat between 6825 and 6865.

US & Asia Overnight from Bloomberg

Asian stocks retreated from a one-year high and Malaysia’s ringgit weakened as signs of a worsening oil glut dragged crude prices lower. New Zealand’s dollar jumped and South Korea’s won fell following monetary policy reviews.

Shares of raw-materials producers and energy companies led declines in Asian equities as crude extended its slide below $42 a barrel following a surprise increase in U.S. stockpiles. The kiwi surged to a one-year high after the country’s central bank cutinterest rates and signaled a more gradual easing path than some investors had anticipated. The won slid from near a 14-month high as the Bank of Korea indicated it has room to cut borrowing costs from a record low. Nickel snapped a four-day advance and gold declined.

Crude entered a bear market last week, a sign global growth remains weak even as policy makers from Tokyo to Frankfurt engage in unprecedented stimulus to boost their economies. New Zealand joins Australia and the U.K. in having cut its benchmark rate to a record so far this month, while a strengthening jobs market in the U.S. has yet to convince traders the Federal Reserve will boost borrowing costs this year.

“The biggest risk to the market at the moment is a huge drop in oil prices,” said James Woods, a strategist at Rivkin Securities in Sydney. “We’ll see some near-term weakness in the coming weeks. Investors are likely to be buying on these dips as central bank policies remain supportive of equities.”

Singapore cut the top end of its 2016 growth forecast on Thursday after the economy expanded less than previously estimated in the second quarter. China Mobile Ltd., the world’s largest phone carrier by users, reported first-half profit that beat analysts’ estimates. Financial markets in Japan are shut for a holiday.

Stocks

The MSCI Asia Pacific excluding Japan Index fell 0.5 percent as of 12:36 p.m. Hong Kong time, halting a five-day advance. Australia’s S&P/ASX 200 Index dropped 0.6 percent as Taiwan’s benchmark retreated from its highest close in more than a year.

Singapore’s Straits Times Index lost 0.4 percent. The government revised its estimate of second-quarter growth to an annualized 0.3 percent from 0.8 percent and trimmed the top end of its 2016 forecast to a 2 percent expansion from 3 percent. The bottom of the projected range was kept at 1 percent.

Futures on the S&P 500 Index added 0.1 percent after the underlying benchmark declined 0.3 percent on Wednesday, retreating from near to a record high. Contracts on the U.K.’s FTSE 100 Index were little changed. Thyssenkrupp AG, Germany’s largest steelmaker, announced a drop in quarterly earnings.

Currencies

The kiwi rose as high as 73.41 U.S. cents, its strongest level since May 2015, before trading 1 percent stronger on the day at 72.78. The Reserve Bank of New Zealand reduced its key rate by 25 basis points to 2 percent. While the cut was expected by all 16 economists surveyed by Bloomberg, the swaps market had priced in a 20 percent chance of a half-point reduction.

“Even though the 25 basis-point rate cut was fully priced in, there was uncertainty that the RBNZ could even have opted for a 50 basis-point rate cut,” said Angus Nicholson, a market analyst in Melbourne at IG Ltd. “Once the 50 basis-point fears turned out to be unfounded the kiwi dollar promptly rallied.”

South Korea’s won snapped a five-day advance, weakening 0.7 percent after reaching its strongest level in more than a year on Wednesday. Bank of Korea Governor Lee Ju Yeol kept the benchmark interest rate at 1.25 percent and said the authority has scope for more policy adjustments. The ringgit also fell 0.7 percent as the slide in crude prices dimmed prospects for Malaysia, the region’s only major net oil exporter.

Bloomberg’s dollar index, a gauge of the greenback versus 10 major peers, rose less than 0.1 percent. It ended the last session at a seven-week low as the probability of a U.S. interest-rate increase this year slipped to 41 percent in the futures market.

Commodities

West Texas Intermediate crude fell 0.5 percent to $41.51 a barrel, after sinking 2.5 percent on Wednesday as official data showed U.S. supplies increased by 1.06 million barrels last week. Analysts surveyed by Bloomberg had forecast a drop of 1.5 million barrels. Weakness in global crude markets may persist as demand slows seasonally and fuel inventories remain abundant, the Organization of Petroleum Exporting Countries said Wednesday.“The risk is increasingly to the downside,” said IG’s Nicholson. “The trend from here could well be a much bigger and steady increase in U.S. crude inventories.”

Nickel lost 0.9 percent in London, slipping from a one-year high. Copper rose 0.2 percent and gold declined 0.3 percent.

Bonds

Yields on Australian bonds due in a decade fell for a third day, declining by two basis points to 1.85 percent. New Zealand’s two-year bonds fell and its 10-year notes advanced, flattening the so-called yield curve, following the central bank’s policy meeting.

U.S. Treasuries gained on Wednesday as 10-year notes were auctioned at the lowest yield in four years amid near-record demand from a group of buyers that includes foreign central banks and mutual funds. [Bloomberg]

FTSE 100 Outlook and Prediction

FTSE 100 Prediction
FTSE 100 Prediction

We dropped off the 2 hour resistance yesterday but most of that was to do with the divi and have held steady overnight at the 6820 area. We have support at 6803 from the 200ema on the 30min, with 6749 below that where we have the 10 day Bianca. If the bulls can hold that 6800 area then I can see a rise up to 6889 (and possibly 6905) where we have the 20 day Bianca channel. Above that the 10 day is at 6948. Initially the bulls will need to break the 6830 area where we have the daily pivot and the 30min coral – hence why I have plotted an initial drop down from here to the 6800 area with the arrows.

So, if all goes to plan, it s a fairly simple one, looking to go long around the 6800 area for a run to the higher resistance levels. However, if 6799 breaks then look to short for a run to 6750.

79 Comments

  1. Morning chaps closed my Dow long from yday at 539.5 and I’m long Ftse….good luck guys :0)

      1. Si ! if can red it if the time has passes away would you be able to share your conspiracy theory with us ? ;P

    2. I’m also short, just entered at around 46 may add in a little while. However my trades are very short/few pips target. I’m with Nick a bit tho on my outlook, think there’s still a little way to go before a downtrend.

  6. Added @52 ! I think Now might be going down .. purely on the theory of sell off from people who were long fro dividend yesterday would try to come out @ 12 … lets see

      1. I am in it with you ! problem is time and patience is immense might not be suitable for Daily trader ..

  7. I’m short from 6850 this morning, wish I would of taken my profit now 6858 lol..
    Will have to sit on my hands…

      1. It was weak last night, no sign of going up, nipped in long at 6811, off loaded first thing at 6850 and went short..

        Its not a bad strategy @ 8am they always ramp it one way then it reverses generally for the rest of the day.. Not today hehe

  11. I’m beginning to wonder if I should just dump my short. Seems like death by a thousand cuts, probably going over 7,000 isn’t it…

    1. Not that I deny probability of it going above 7000 is there but I understand there needs to be some short of pullback good enough to cut the losses but again its one’s own call !! 🙁

    2. Usually the sign that its about to reverse when you have held on for so long and think of throwing the towel in

  12. Long this morning from 6820, closed at 60….why do I always close to early!
    Will short at 6880 if it gets that far? Do think there will be a good drop by the end of August

  17. every small dip being brought up, this market still has plenty of manipulation still too run

      1. Let’s hope so. I’m in £11 a point now which double my comfort zone, would like a drop to 850 to pull a few out. ( I say as it keeps rising)

  20. Out of multiple longs at 80.8……… Smokin…..what a week my third best ever…..party on guys……..good luck to you all……..it’s Party Time :0)

        2. Hey Si I’ve got some vanish here……….you can have it……it’s the only stuff ive found that can remove stubborn stains…….saves buying new pants :0)

      2. Brake pads on the old one and a new one for Sunday’s….We have worked really hard WSF at this and been through some very tough times but now it’s our time to shine…….best of luck and enjoy your success anyone that can stick at this through thick and thin and come out on the path to consistency is a hero in my book….very best of luck WSF ….Si don’t give up mate but learn from your situation…..I have been in your situation many number of times and I know how hard it is…..good luck Si hang in till after the U.S. election I reckon but best of luck……..and good luck to all you guys. On here……and tmfp if you read this thanks for all your help …..you taught me so much…….:0)

        1. Cheers Anstel,long way from Greece and Paris now,congratulations,just left you a link for your video collection at the bottom of the page,funny how the change of pace seems to have let some more lessons sink in,thin line between pushing an edge and just overworking I guess.All the best.

          1. And Yes,thanks Tmfp,inspirational and especially thanks for being so generous with how you see the mkts.

          2. Yes it’s taken me 3 yrs and most of my life’s savings but I finally think I’m getting it…..Greece and Paris were two of my four big drawdowns…..I’ve blown an account got it all back…blew it again.. Then blew another one……..was living of £15 food at my rock bottom and parked the car up……3 to 5 years to find consistency they say…….I would have to agree with them…..it’s very very hard and we are our own worst enemy …….it’s all in the grey matter,that’s where success is I think……good luck catch you next week :0)

      1. Thanks Smokinaces …..I’m so tired I can’t tell you….I’ve been trading big size and the pressure has been enormous but that’s me for the week now……best of luck with your short……it’s gotta pullback soon surely. It’s the US election I think and Mr P is doing overtime……hang in there buddy ……:0)

  22. Hey all,
    busy on here today!
    Oil is overbought – though obviously it could stay like that for the rest of the day!
    Ftse seems to have bounced off nicks resistance level 6889ish.
    Dow – quite a sharp up move without a retracement yet – I wonder if it will go down to 18580 area.
    Bit tricky with it coming up to the close too.

    Well done on your week Anstel ! I’m also on my best week ever! 🙂
    I’m actually running 14 on target days in a row, which strangely is starting to get a little worrying if I’m honest – I’m trying to go carefully and not get overconfident and give back 3 weeks profit.

    See you all tmrw.

    1. Thanks inoodle…..Yes Yes Yes that’s the Key……don’t get overconfident……..walk away shut the computer down and come back next week and trade small size again….better still leave the market alone for a week and see where it is then …it might present a clearer window of opportunity to place a trade…..best of luck and congratulations on your week :0)

  29. Si I am stuck in a short too mate but would not be adding too it, the market is not ready too turn south yet. This could easy take out the all time high, and the Bull are in full control.

      1. Easy Done Si but this rally is something else, from the lows of 5780 ish to where we are today with no real pull back. to be truthful its a joke and really show how rigged the markets are.

  32. looks like 7000 could be on the card tomorrow, even though we are on a strong resistance at 6910 ish.

  33. RSI 14 was last oversold on this level 3rd Sept 2014 and the hight point reached was 6899 and the lowest point 6823 nearly the same as today.

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