FTSE 100 Support 6961 6946 6916 6913 6876
FTSE 100 Resistance 6967 7000 7001 7054
Good morning. Well it was bearish for most of yesterday though unfortunately didn’t get the little pop up initially to 7025 for a decent short entry. The 6990 level I mentioned in the afternoon update turned out to be a great trade – at the time it was very 50/50 which is why I didn’t SMS it. Always the way when you don’t think they are going to work, they do! The gold long worked well, hitting target for a small gain. Its mostly hovering around the 1250/1260 area, so if the bearishness on the indices starts to gather some pace then we may break through the gold 1262 resistance. Still got the long term longs at 1250. Of note as well was that the two Bianca channel supports were tested and held – 6975 initially (20 day) and 6950 (10 day). The Bianca channels haven’t had much luck recently, with the price carving straight through them, so maybe they have turned the corner and coming back into relevance.
US & Asia Overnight from Bloomberg
Asian stocks rose by the most in two weeks and the dollar weakened versus major peers amid speculation U.S. monetary policy will remain accommodative. Fading prospects for interest-rate cuts in Australia and New Zealand boosted their currencies and weighed on the nations’ bonds.
Raw-materials producers led gains on the MSCI Asia Pacific Index as the greenback’s slide gave a lift to commodities priced in the currency. The Bloomberg Dollar Spot Index extended Monday’s retreat from a seven-month high after reports showed New York manufacturing unexpectedly shrank and U.S. factory output barely grew. The Kiwi led gains among major currencies after inflation data, while the Aussie ranked second as the Reserve Bank of Australia highlighted the risks of monetary easing. Oil rose above $50 a barrel.
The U.S. interest-rate outlook continues to occupy investors with futures prices indicating a 66 percent chance that borrowing costs will be raised before the year is out. The Bloomberg U.S. ECO surprise index — which measures whether economic data have exceeded or fallen short of analysts’ estimates — fell below zero for the first time in two weeks ahead of American inflation figures on Tuesday.
“The dollar has struggled to gain upside momentum today because of further evidence that the Fed’s tightening cycle will be very gradual,” said Elias Haddad, a senior currency strategist at Commonwealth Bank of Australia in Sydney.
Stocks
The MSCI Asia Pacific Index added 0.4 percent as of 12:51 p.m. Tokyo time, with a gauge of raw-materials producers rallying 0.9 percent.
Hong Kong’s Hang Seng Index advanced 0.9 percent and the Shanghai Composite Index rose 0.5 percent. China may release September lending figures before Wednesday’s report on gross domestic product.
S&P 500 Index futures gained 0.3 percent, while contracts on the U.K.’s FTSE 100 Index climbed 0.4 percent. Netflix Inc. surged 20 percent after regular U.S. trading hours, as the online television service said it added more subscribers than estimated in the third quarter. Goldman Sachs Group Inc. is among American companies posting results on Tuesday.
Currencies
The Bloomberg Dollar Spot Index, which tracks the U.S. currency against 10 major peers, declined 0.2 percent. The pound strengthened 0.4 percent before the U.K. releases September inflation figures on Tuesday.
The Kiwi climbed 0.7 percent after New Zealand said its consumer prices rose 0.2 percent from a year earlier in the last quarter, more than the 0.1 percent increase forecast in a Bloomberg survey. Some economists said the data may weaken the case for interest-rate reductions beyond November.
The Aussie strengthened 0.6 percent and touched a two-week high. Reserve Bank of Australia Governor Philip Lowe said Tuesday that trying to revive inflation too quickly could threaten financial stability by inciting a new round of borrowing by heavily indebted consumers. He spoke before the release of minutes from the RBA’s last policy meeting, which showed economic expansion was forecast to continue at a moderate pace.
Bonds
The yield on U.S. Treasuries due in a decade rose one basis point to 1.78 percent, after declining three basis points on Monday. Longer-dated notes have slumped this month amid concern inflation is gathering pace and Tuesday’s data are forecast to show American consumer prices increased 1.5 percent in September from a year earlier, the fastest pace in almost two years.
“Everybody is talking about the inflation rate,” said Kim Youngsung, head of overseas investment in Seoul at South Korea’s Government Employees Pension Service, which has $13.2 billion in assets. “We are expecting an interest-rate hike in December. Worldwide, everybody is worried about interest-rate hikes next year.”
New Zealand’s government bonds were the biggest movers in Asia, with the 10-year yield rising by five basis points to 2.61 percent. Futures traders were assigning a 79 percent probability of a an interest-rate cut at the central bank’s Nov. 10 meeting compared with 84 percent on Monday.
The yield on Australian debt due in a decade increased by two basis points to 2.33 percent. The chance of borrowing costs being lowered by the end of 2017 slipped to 25 percent in the futures market from 33 percent on Monday.
Ezra Holdings Ltd. became the latest oil services company in Singapore to seek leniency from its creditors, requesting waivers from bondholders on some of its debt covenants. Its Singapore dollar bonds due in 2018 have dropped to about 41 cents from 89 cents three months ago, according to prices compiled by Bloomberg.
Commodities
Crude oil was up 0.6 percent at $50.22 a barrel in New York, after slipping 0.8 percent in the last session. The price has fluctuated near $50 so far in October amid uncertainty about whether the Organization of Petroleum Exporting Countries will implement a Sept. 28 agreement to reduce supply. An OPEC committee will meet later this month to try and resolve differences over how much individual members should pump.Gold rose 0.3 percent, while copper, aluminum and lead climbed by the most in a week.
“The Fed is likely to hold fire on interest rates until December at the earliest,”Jordan Eliseo, chief economist at Australian Bullion Co. said by e-mail. “Data is still mixed, and there seems little justification to push through a hike.” [Bloomberg]
FTSE 100 Outlook and Prediction
Its earnings season in the US hence things are a little choppy at the moment, and some decent earning reports (Netflix) have helped the futures prices battle back from the lows last night. There is a 8.7 divi tomorrow by the way too. The bulls will be keen to break the daily pivot at 6967 initially this morning for a rise towards 7000, where we have a few resistance levels – 200ema, R1 and 2 hr coral (though this will be the second test of the latter, having dropped off it when we tested it on Friday at 7045).
To start with the 30min chart looks positive for an initial rise, though the bears will be motivated by the fact that they managed to drop it quite fast yesterday from that 6990 level. I am generally thinking that the bears have the slight edge on who is in control, and we are going to get a dip down towards 6800, before a rally back to 7150ish then a bigger down. So, for today the trade that looks the most viable at the moment is a short at around the 7000 level. Tricky price action at the moment, thats for sure!
Morning all! Nice and early long from 6975closed @7013! Looking to short around 20 let’s see !! Good luck all
As we are above yesterday’s high..the uptrend is in play…
Highly impressive bounce this morning, resisted the temptation to sell into it after getting out of a small long far too early. Limited risk for some light shorting from 40 to 50 for maybe a pullback to 7000 before more upside.
Shorted 25 might be early ! Let’s see
does anyone know why the pound jumped by so much last night?
against the dollar
Just a technical bounce I’d say, after prolonged weakness and strength there’s bound to be corrections. It could get back to 1.26 and still be a dead cat.
I’m going to open a pub called The Rampers Return.
One pint free for Members for limited time Si!
Doesn’t want to drop ! Hmm
Oh woh, the arrow down is not needed today. EMA are in rally. Just the arrow up is enough, thanks 🙂
It may work to FTSE though :). Never for Dax.
If Dax decides to go somewhere, it goes straight line.
Out for 20
Good call, lets see how much this bounce has got in it for a reshort maybe.
7005 ~50% retrace of this morning’s rise, just saying…
Making a few small gains scalping cable this morning…..
I have a short order at 6695. Had a long from 6905 earlier but closed for 5 as was coming down. I think it’s likely to drop a lot if 6690 breaks
Fib dolls, previous previous low and probable ++1min rsi make 15ish a poss reshort for me.
cheers tmfp took +7 on 15 short just now
With the smaller and smaller dolls I squeezed +6, thinking about shorting it again but hanging fire being noon
Longed the break of 16 in the end, getting a bit o/b to challenge prev highs this time so coming out for a handful soon, but will prob replace on a pull back to 16ish
I’m going to sit on my hands till the DOW I think, unless anything crazy happens (>40 or <00).
Don't trust these low volume mark up rallies, seen too many recently.
Already asking ~+100 from the DOW, which was hardly impressive yesterday.
I know am waiting for DOW as well or I might just trade around 3.30-04.30 that’s it for today.
Okay maybe a risk/reward short at 30s now and will hold this until end of play today or tomorrow. Target 6950/6960
Hi rick. Why 3.30 to 4.30 to trade? Thanks.
Hello Mr B, I just like the movements around this time.
As I do not have patience and the movement is usually good around 3.30-4.30 then I look to come out from my positions by 04.30 or 5pm and that’s it.
Another thing I like is shorting the rallies until around 16:00 and close the positions by 16.25-16.30 and this usually works around 70%/80% of the time.
Ok rick, understood, thanks for reply.
ROC Total Price seems to be picking up again – maybe 7030? 😀
https://td.md.it-finance.com/ProRealTime_V10_2/display_chartimage.phtml?name=1liaehinxcz8yhup3xeeb7yy9&type=png&purpose=file
You’re a genius Jim 😉
nice one Jim. I hope this is the top today or maybe another push to 7050?
Thanks Rick – I think on balance it might push up a bit more – e.g., 30mins ROC pretty solid.
Ha ha tmfp – just now and again! I like this ROC mechanism though – developing it a bit.
Hi all. So it seems the FTSE has a potential to rise to 7048 before it has a brutal crash down to 6960, according to my bollinger bands. I think i will short from 7030 just so i can be in the trade incase it doesn’t go to 7050.
Short @ 7031…all media bullish…Barclays telling people 2016 time to buy….
Barclays saying to buy now…never heard them telling people to buy at the 5500 level….
OK, gently having another go, although I promised myself I wouldn’t. Tiny short at 32.
Should have said, stop at 45, looking for 00, will bottle it before then if it happens!
Said I’d bottle it, took +10. Back to real work
where do you see the Dow going? Up from 18,205?
I’ve just gone large short dow and ftse. #crystalball
I’m following you
looks like a great call
Closed FTSE and added to DOW short.
you think ftse is going higher?
i am still holding ftse and dow
No, it’s just that I prefer looking at the dow chart because it moves more often 🙂 Stupid reason!
ok – makes sence.
Another down leg coming
I’m short FTSE again 7005
Out of FTSE again, added to DOW. 18301 stop.
Reduced DOW to 50pp. Letting it run now.
nice work Si!
A cautious long at 7000 maybe a bounce to around 14, might get helped by the DOW breaking up thru 180
err dumped pdq
I wouldn’t long this bull trap, still running my short from 30s and just added at 7005, I think we will see 6960 shortly
hope you are correct
followed you with more short on ftse 6996
already have a 30/pp from 7011
I am on £200/pp now will add more if get to 7020.
I am fairly sure, it will drop. if it doesn’t then never mind another day :0)
Yeah, it’s a tricky one alright, I’m just trying to get the perfect entry for some protection. Longed it again at 95, but don’t like those DOW mini candles.
160, 180 and 7007, 12 short term resistance, then pullbacks and maybe more up into the close, but no house on it.
Making really hard work of it, but not quite broke yet. Down to a skeleton long, will add into the close if 012/180 break.
all out at 90, have a good evening all!
My short kicked in @6995 lets see how it plays out
Added to dow short at 18165 for another dip, hopefully
would be nice to see 18000
hope you are right . added to my dow short
Si
Make sure you have a overnight stop on Gold, heard something, that they could flash crash Gold next…
Added to my 7031 short at 7010… A close below 7000 would be good for the bears..
added to my short again – large short
Long gold very large again for my long term christmas pos @ 1260.
with you putting my 1st long for long term
gold looking like a good bet to go to 1800 +by year end
Gold looking good already!
Si
Make sure you have a overnight stop on Gold, heard something, that they could flash crash Gold next…
Ahh ok cheers! Sold it. One day I’ll get my xmas long going!
P.S. Dow looking good!
could of been better at 18000 lol