FTSE 100 Resistance 6920 | Support 6875 | Fed no rate rises |bearish

FTSE 100 Support 6883 6875 6866 6798 6782
FTSE 100 Resistance 6919 6931 6956 7014 7018

Good morning. We finally saw a bit of bearish activity with a move below 6900 yesterday, falling to 6850, before the Fed minutes helped to reverse that. There wasn’t much in the way of divi hunting prior to the bell, with most waiting till later to see what the Fed said. With rate rises not happening any time soon, the markets rose, with the FTSE climbing back to 6895. With resistance at 6919 this morning it will be interesting to see how much further it goes, and if the momentum swings back to the bulls. Meanwhile Britain’s economy will slow down but should not go anywhere close to a recession, according to economists at credit ratings agency Moody’s, while growth in the rest of the world is also “stabilising.” Moody’s economists predict growth of 1.5pc this year and 1.2pc in 2017.

US & Asia Overnight from Bloomberg

The dollar retreated versus all of its major peers after minutes of the Federal Reserve’s last meeting damped prospects for a U.S. interest-rate increase this year. Yen gains weighed on Japanese shares, while corporate earnings gave a lift to stocks in Hong Kong.

The Bloomberg Dollar Spot Index sank to a three-month low after the Fed record showed officials saw little risk of a sharp uptick in inflation, helping push odds of a rate hike this year back below 50 percent. Australia’s dollar jumped after better-than-expected jobs data. Japan’s Topix index fell as the yen strengthened beyond 100 versus the greenback, while the MSCI Emerging Markets Index was set for its best close in a year. Crude traded near $47 a barrel in New York after the longest run of gains in a year.

Bets that central banks around the world will remain accommodative amid uneven growth propelled global equities to a one-year high this month and sent the dollar tumbling. The Fed minutes struck a more dovish tone when compared with comments this week from New York Fed chief William Dudley, who flagged the prospect of a rate hike as soon as next month. Dudley will hold a press briefing on Thursday in New York and his San Francisco counterpart, John Williams, is also due to speak.

“The message appears to be that as much as a September hike is a possibility, the Fed is unlikely to move until there is a consensus on the outlook for growth, hiring and inflation,” said Rodrigo Catril, a currency strategist at National Australia Bank Ltd. in Sydney. “Recent data would therefore suggest a hike is not imminent.”

The European Central Bank may shed light on its policy outlook when it releases an account of July’s monetary policy meeting on Thursday. Euro-area inflation data are also due, while the U.K. will report on retail sales and the U.S. has weekly jobless claims figures coming. Nestle SA and Wal-Mart Stores Inc. are among major companies announcing earnings.

Currencies

Bloomberg’s dollar gauge, which tracks the U.S. currency against 10 major peers, fell 0.3 percent as of 1:06 p.m. Tokyo time, after rising 0.2 percent last session. The index was up as much as 0.5 percent on Wednesday ahead of the Fed minutes’ publication.

“The minutes struck a cautious note against any rushed rate hike decision,” said Mitsushige Akino, a Tokyo-based executive officer at Ichiyoshi Asset Management Co. “The odds are for a December hike, rather than a September one, and the yen looks set to extend gains from here.”
The yen strengthened for a fifth day, gaining 0.3 percent to 99.98 per dollar. South Africa’s rand gained 0.7 percent, leading gains among the currencies of commodity-exporting nations. The Aussie climbed 0.6 percent after a report showed Australia’s unemployment rate unexpectedly fell to 5.7 percent in July.

Mongolia’s tugrik dropped for a record 24th consecutive day, sliding to an all-time low. The nation’s central bank raised its benchmark interest rate to 15 percent from 10.5 percent to support the currency, while the government announced salary cuts for executives and management-level staff at state-owned enterprises in a bid to prevent a default.

Stocks

The MSCI Emerging Markets Index rallied 0.8 percent as benchmarks in Hong Kong and Indonesia rose more than 1 percent. The Topix dropped 0.9 percent and Australia’s S&P/ASX 200 Index lost 0.5 percent. The Philippine Stock Exchange Index erased losses after the government reported better-than-expected economic growth for the second quarter.

The Hang Seng Index climbed 1.6 percent, with all of its four biggest gainers rallying in the wake of earnings. Tencent Holdings Ltd., which has the biggest weighting on the gauge, surged as much as 6.2 percent to an all-time high after reporting a 47 percent jump in quarterly profit that beat analysts’ estimates.

“There’s a euphoria,” said Francis Lun, chief executive officer at Geo Securities Ltd. in Hong Kong. “Given the economic conditions, investors were not expecting too much from earnings.”

Treasury Wine Estates Ltd., which owns Penfolds and is the world’s largest listed vintner, jumped as much as 13 percent in Sydney after reporting increases in annual sales and earnings. Samsung Electronics Co., the world’s largest maker of phones and memory chips, rose to an all-time high in Seoul.

S&P 500 Index futures gained 0.1 percent after the U.S. benchmark ended the last session within 0.4 percent of a record high.

Commodities

Crude oil fell 0.1 percent to $46.75 a barrel in New York, after advancing on each of the last five trading days. It gained 0.5 percent on Wednesday as data showed U.S. crude and gasoline stockpiles declined, easing an overhang of supplies that are at the highest seasonal level in at least two decades. OPEC is on course to agree an output-freeze deal because its biggest members are already pumping flat-out, Chakib Khelil, the group’s former president, said in a Bloomberg interview.

“The decline in crude inventories and the much bigger drop in gasoline stockpiles is clearly a positive,” said Angus Nicholson, a market analyst in Melbourne at IG Ltd. “There has been a lot of momentum in the oil price, fueled by some jawboning with regards to the possibility of a supply freeze deal.”

Gold rose 0.4 percent, climbing for a fourth day amid the dollar’s retreat. Silver and platinum rose more than 0.9 percent.
Copper added 0.7 percent in London, nickel gained 1 percent and aluminum traded near a 13-month high. The World Bureau of Metal Statistics reported late Wednesday that all six industrial metals included in the London Metal Exchange’s LMEX Index saw shortages between January and June, with the aluminum market’s shortfall widening to 479,000 metric tons in the first half, from 331,000 tons in all of 2015.

Bonds

U.S. Treasuries due in a decade advanced for a second day, pushing their yield down by one basis point to 1.54 percent. Morgan Stanley recommends buying five-year notes, saying the absence of inflationary pressures in the world’s biggest economy will push the probability of a Fed rate increase this year to 30 percent in coming weeks. The likelihood was 49 percent on Wednesday, according to Bloomberg calculations based on Fed fund futures. The yield on Australia’s 10-year bonds fell three basis points to 1.88 percent, having fallen as low as 1.86 percent prior to the employment data. [Bloomberg]

FTSE 100 Outlook and Prediction

FTSE 100 Prediction
FTSE 100 Prediction

We have resistance still on the 2 hour chart that we haven’t tested yet since going bearish on the 16th August. That resistance is at 6920, with the coral at 6931 – as such I am favouring a short around this area this morning for another leg down. The rise was mostly fuelled by the Fed saying that there were not likely to be rate rises this year. Initially we have support from the pivot at 6883, with the 30min coral just below that at 6875.

So, a fairly simple plan really for today, looking for longs around the pivot area at 6880 and short at the 6920 area.

75 Comments

  1. Morning all,had a little Ftse long up to 9.00,was looking for 6890,few sma’s there on short time frames,but waiting on the retail sales at 9.30 now.
    That’s a great link from Nick in the Twitter feed for the Telegraph article,
    “Our baseline growth forecasts also incorporate the assumption that some fiscal loosening and monetary policy accommodation will support the economy, eurozone limiting the slowdown in growth.” – Moodys
    and, “A concerning aspect of this current environment is that the lack of fiscal buffers, combined with the limited scope for effective monetary accommodation, has reduced the ability of authorities in many economies to support economic activity in the event of future systemic and idiosyncratic shocks,”
    Are really good bits. 🙂
    I was reading about Banks looking to store more cash the other day,to reduce the cost of sticking it on dep and copping the negative charges designed to make them lend it out 🙂 you cant make this stuff up,Comedy gold.

    1. Other News just in……….I think it’s going back up :0)……Have a great Day WSF and I hope all your trades provide you with brake blocks or pads for many years to come….Lets make some money :0)

        1. How did you know? I’m doing absolutely fantastic at the moment…….I don’t mind sharing there’s enough for everyone :0)…. Just make sure you press the right buttons :0)

          3. Just like to say cfdf1212…..when we get red candles coming into a data announcement it doesn’t mean the market is necessarily going down,it just means that the buying pressure at that particular moment is reduced because traders are unsure so the price drops…it’s just supply and demand at that moment ….hope that helps….

      1. Nice one WSF…..they look a bit smart though……personally I’m a t- shirt kinda guy……had a laugh the other day….went into a German car specialist cars sales place to have a look at an R8 a friend liked…..we went in t-shirts and casual gear….didn’t look like we had a pot to —- in…it was quite funny I asked for the keys to have a look round the R8… He said oh it’s locked. Don’t know where they are lol…..so I jumped in to check it out and he said Oh is it open lol….. Have to turn up there one day in something exotic so he can worry about the commission he might have lost…….lol :0)

          1. :0) :0) yeah but your talking really big money there…..if you really want to get the sales staff nervous go to Waitrose……they nail your hat on there while your walking round the store before you even get the heart attack at the checkout lol :0)

    1. Looks like a double bottom forming on the hourly Ftse chart to me but I’ll leave all the technical stuff to WSF the chartmeister :0) party on guys now go make some points :0)

      1. 60min is interesting,that 900 area is around 50% retrace of the fall from mondays high when RSi was overbought to yesterdays low,fwiw mid 76 is is todays pivot and I reckon we are at about 61.8 of the climb from yesterdays low to 6900 at the moment.I’m thinking about playing the 15 min chart in whichever direction it moves from here and leaving it a bit,thats probably overthinking it though,most likely dressing up btfd with a 20 point S/l 🙂

          4. Long from 85.9 farm and tractors but still got my bike in reserve in case the fed make a counterattack :0)

          5. Trying to do a Tom Hougaard……I attempt to fade the short term trend into the long term trend…

          8. Dax 15 min is in an interesting place,been showing more support than Ftse and back above 600/620 could mean a nice run up to 1.30 and US claims for everyone.

          11. I liked the Ftse 15 min candle at 11.45 as a Gravestone Doji followed by a Bullish one too,we’ll see where the current one ends at 13.00.Rsi is turning up a bit,might just be seeing what I’m waiting to see though 🙂

          15. Seem to have some slight technical difficulties with the liquid oxygen at the moment…..we don’t seem to have enough thrust :0)

  6. Hey WSF seeing as tmfp is AWOL we can talk about the closed Dow……..it’s almost sat firmly on the 100 on the 15 min chart…..

    1. If you want to provoke him it’s at the middle line on the always useful Bollinger bands on the daily time frame too.

        1. Wouldn’t want to provoke the wrath of our mentor…..blimey we have had some right b*llockings of tmfp in the past better keep it quiet in case he’s watching us :0)

  7. Hey chaps!
    I tell you what, the correlations have gone awry on 5 min chart – I might have to expand my horizons any minute. Mr Dow has hit the top of its down channel, though I doubt that will have much to do with anything at the open.
    Dax is just off in its own little world – ignoring usdjpy seemingly more correlated to gold…

  9. 6596 is my avg at the moment but I’d likely not have the patience to wait for that, so 6349 is the main target. 40pp for that. Currently 100pp overall.

    1. I’m 120 on this baby…….looks like we might both have to start digging tunnels in opposite directions lol :0)

      2. 1hr stochastic and rsi look like a rise is on the cards in the short term. AND THEN IT WILL DROP LIKE A STONE! 🙂

        1. Well a trip to above 6900 will do me more than nicely but time will tell…..:0) it’s funny the Dow and Dax look happy to me but Ftse has PMT for some reason…..:0)

  11. I think I need to man up on my stake. I don’t go much above £10pp which is 1% roughly of my pot. I average about 125pts a week but I do get locked in which makes me nervous about increasing my bets . Curious what you chaps opinion is on how much stake as a percentage of your total account should you be betting?.

    1. Stick to your £10 pp Morko I’m pushing it because I have a strong belief where it’s going and I’m not really being disciplined enough to be honest….

        1. No no you stop talking it down lol plenty of time for a crash after the election and you have more points to go at then than me lol…:0) we are just passengers anyway buddy it’s doesn’t know we even exist ……..good luck to all………

      2. Yeah, it’s easy to go in more. I meant 0.1% but I have been burnt before. The last 6 months is the first time I have consistently made week in week gains. For me getting burnt at least once is part of the training. Good luck! . Ps in long now at 6855

    2. “They” say 2% is a good amount, but I’d bet what you are comfortable with. Aim to get rich slowly rather than poor quickly

      1. When it’s too much it becomes emotional and that distorts your opinion and actions I find anyway. Cheers Nick.

      2. I’m trading low stakes, being patient and wait for levels to buy or sell..
        You can still make good money… I dont use indicators only volume and price..I prefer shorting than going long…

          1. That’s so true what Nick says about what your comfortable with…..and that depends on your personal view on the stability that the market is exhibiting at the current time ……imo…..

            1. I’m normally a bear, but you can’t swim against the tide all the time. I short and long off support and resistance levels with s bias to the shorts but with this method it’s either a quick buck or a month lock in. Need to spend some quality time reviewing strategy to tune I think.

  12. How much legs has this FTSE got then today , I want 6890 and then 6915 to pull my longs. I’m on holiday with family I’m Majorca and debating to close now….getting hassle from the wife for checking my phone every 39 mins

        1. Tough call but I’m looking for North of 6900 and I wouldn’t have this size on if I though it wouldn’t get there at least……:0)

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