FTSE support 6668 & 6682. Run to 6805?

Good morning. A fairly quiet weekend on the financial news front overall. Still some simmering tensions over the Ukraine and a plane crash (some say a bearish sign!?). Fridays NFP results came in better than expected, creating a sell off – an improvement stoking tapering fears again. Overnight last night we had slightly weaker Chinese inflation data as prices decline.

Asia Overnight from Bloomberg
Asian stocks tumbled, led by shares in Hong Kong and Shanghai, copper headed for its biggest two-day retreat since May and emerging-market currencies fell as weaker-than-estimated Chinese trade and inflation data stoked concern over the outlook for the world’s second-largest economy.

The MSCI Asia Pacific Index dropped 1 percent by 1:16 p.m. in Tokyo, as the Hang Seng Index fell 1.6 percent. Copper slid 1 percent, heading for its lowest close since June and leading industrial metals lower.

Standard & Poor’s 500 Index futures lost 0.3 percent. China’s yuan weakened as the central bank lowered its fixing by the most since July 2012 versus the dollar. Malaysia’s ringgit snapped a four-day gain and Australia’s currency declined. Gold decreased 0.5 percent.

Industrial metals are falling as expanding stockpiles in China, the biggest consumer, add to a raft of data that signify a broad slowdown. The country’s lawmakers are meeting to set economic policy amid growing credit risks that saw the country’s first onshore bond default last week. Better-than-estimated U.S. payrolls figures on March 7 bolstered the case for continued reductions in Federal Reserve stimulus. In Crimea, Russian troops detained Ukrainian border guards amid the ongoing standoff.

“China is moderating but only very modestly,” said Donna Kwok, Hong Kong-based senior China economist at UBS AG., in a Bloomberg TV interview. “Ultimately you need to wait for March data to really get a true sense of the underlying outlook. The PBOC is very consciously guiding the recent volatility. We see the default as a risk, as a shift in investors’ mindset.”

Inflation Report
Producer prices slid 2 percent, the most since July, while the inflation rate was 2 percent for February, reports at the weekend showed. The National People’s Congress, an annual meeting of China’s lawmakers, continues this week, with People’s Bank of China Governor Zhou Xiaochuanspeaking tomorrow.

USA
U.S. 10-year Treasuries climbed, snapping a four-day losing streak, with the yield dropping to 2.77 percent today. Economists projected U.S. payrolls would rise by 149,000 last month, with the bigger-than-expected 175,000-worker increase indicating the economy is starting to bounce back from frigid winter weather.
“The fact employment rebounded in February despite the harsh weather pretty much guarantees the Fed will continue with its steady process of tapering by $10 billion at its next meeting,” Kymberly Martin, a markets strategist in Wellington at Bank of New Zealand Ltd., wrote in an e-mail to clients today, referring to the Federal Reserve and its bond-buying program.

FTSE 100 Prediction
FTSE 100 Prediction

FTSE Outlook
I am thinking a dip and rise today and we have both the 10 and 20 day Bianca channels nearly in play – the 20 day at 6707 and the 10 day at 6668. Today’s pivot is 6739 so likely to act as initial resistance for any rises. To regain any sort of strength for the foreseeable future the price will; need to exceed 6805 which is the top of the 10 day Bianca channel.

In addition to the bottom of the 10 day Bianca at 6668 we also have the bottom of the 20 day Raff at 6670’ish and therefore I think if 6705 breaks this morning, we will dip to that sort of level before a decent bounce, though how long that bounce might last remains to be seen!

I have plotted an initial small bounce from the 6705 area, really only because we have the 20 day Bianca channel there, but I don’t think it will be the bottom for today. If we do hold support at the 6670 though then the bulls will be aiming for the pivot and possibly higher at 6765.

If these supports start to break then we could well be petty bearish for a while, so start shorting on any breaks below 6670.

131 Comments

    1. i had a long @6720 that i closed at 6745 – was tempted to do a risky short from there, but resisted.

  4. Looks like Nick’s target has been reached, so what now for the rest of the day? Some mild pull back happening, is it the end of the long?

    1. Dow touched Pivot 16452 so at 9.54 I was thinking about short off 16446 but didn’t take it, that’s all.

    1. Agree, closed mine at 6735 for a cheeky 5-6 pointer, will watch from the sideline until we see some movement I think.

  8. Little movement, but tending down I think. Negative tilt since last Tuesday 4th (FTSE 30 mins.)

    1. Yeah I couldnt help myself, took another short position at 6736…looking like a downward trend. Stop at 6743.

  13. looking at the dow – id say resistance at 16470, break at 16505 then to 16525. support would be at 16360 then 16325.. could go either way in all honesty.

      1. Thanks GM, I do hold occasionally overnight, it just means I dont sleep as well ha!

        Short order opened @ 6702…

    1. Be careful, its dividend on Wednesday and its almost 22point so there is plenty of dividend hunters out there and that’s why FTSE is not dropping much….they don’t care what the data is and there is still political risk out there, the name of the game is GREED..:-)

      1. Thanks Adam, closed my short @6690 gained about 40 points today, thinking this is a good point to stop for the day.

    2. not yet -i’d be tempted to go long at the support on the dow which is 16360 and 6680 on the ftse.

  27. Agree with Cumberland, last divi saw a 30 point spike up in this environment, just paid 94 for 40

    1. hmmm tough one still looking bearish in my view, also Nick said if 6670 breaks (which is looking close) then we should be looking to go short …

  32. If this does not work out – there will be some serious damage to my account – Down 4 K . But I think it should be ok – by 3.30

      1. Gosh I used to think like this: less loss is better than a bigger one. Where’s your stop loss and are you willing to close on it?

        1. the (-) 4 K was painful now (-) 1.3 is ok – will hold this but stop al the lows on ftse / dow / s&P – but not on dax

        1. Cant see that – a break up of another 20-30 points should seal the downside risk for today

          1. Jules, he could be lucky this time. Dow looks nicer now at 21.30 but there’s no guarantee it will not drop back again for more test.

  41. That’s 80 points taken today ( down and up )

    Have booked a cheeky buy at 6700 with a close at 6680 aiming for 6745.

    Who knows?

  43. Cumberland… Warren buffet meant when the markets are down not near there all time highs.

    1. Yes I agree with how he meant it – his style. But most of his thoughts and practices also apply to a day trade – with a few modifications –

    2. When you have a break-up set up – it originates from a nasty looking market – ” this market can never go up…..sort of scenerio “

    1. look at Nicks 6680 – buy – When things could not be so worse !! refer Warren Buffet

    1. Yes – Mine will work out – All things are pointing to a move higher. Down (-) 1500 as I speak – US looks like it is going to break-upwards – so >50% i am certain !!

      1. at least the rise gave you an opportunity to break even. lucky guy, unless youre still long?

  51. Downside all the way to the FED meeting, only then will I consider buying.

    Still heavily short 🙂

  54. With a 22 div point adjustment tomorrow on the ftse I can’t see it moving down very much if any.

    1. just before close – not sure how it will go overnight personally, id expect positivity tomorrow.

  57. Havies i am completely with you.
    Expecting a drop up to or after the fed meeting.
    Was heavy short, closed it at 6688, and will heavy short again. Btw nick your 6682 long this morning was ace!

  59. Staying long and keeping stop at 6658-expecting a grind towards 6638 level then s&p dow followed by ftse all rolling over late Tuesday afternoon

  61. Cut my long at 6708, feels heavy and a move below 6668 looks imminent down to 6635-40 area where I will be going long

  62. i took a small short @6698 – was about to trade short at 6713 – took a call – come back – 15 points missed. booo

  64. Short is okay but I think only very short term. One more flush out of the longs and I think you buy it around 6630-40 level.

  67. my initial exit plan was 6676, which has just been hit – now im holding as i believe if 6670 breaks we see a big sell off

  68. Looking to get to support level 1 at around the 6660, sell around that level to see what happens and then if we see a further drop to around SL2 at c6620 start looking to go long.

    1. Nicks chart looks like a similar story too with a bounce at that 6640 level. Getting closer to my 6660 target …

  70. just looking at the 2/3/5/10 minute chart.. having some trouble breaking past this 6668 region,

    1. It is looking a bit bearish, Im going to let it keep running, moved my stop so I still come out with a 10 point profit if the tables unexpectedly turn.

  74. Still think we will see 6640-if not I’ve put a buy stop in at 6690 to go long as this area holding twice with the s&p holding at these levels could be significant
    G

  75. Yeah I also had a long order setup at 6690 which has now triggered and live. I’m always weary to hold over the lunch period though due to the occasional impact of the U.S …whats your target G?

  76. Long too now at the same level. Looking st for 6730+ and if we have a close today above that I’m happy to hold it and see if we can break 6900 medium term. My stop is at 6670 but I feel the way the s&p is supported above 1870, I can only see the market trying 1900 very soon. I don’t like the market to be honest and I feel once 1900 has been tested we could see a big retracement to test the lows of 4 weeks ago
    G

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