Good morning. Well when I worked out that 7060 resistance area area yesterday I didn’t think it would be quite that good. It was touched very briefly before the market fell back, and then kept falling. Even 7000 didn’t put up much of a fight. Mostly the afternoon sell off was attributed to a raft of poor US data (this Telegraph article sums it up pretty well), including a 0.2% GDP figures for Q1 2015, though interestingly paints a slightly more optimistic picture towards the end – it certainly sets out a good case for the S&P to get that rise from this 2100 area to 2140 (before much larger declines). After a day of such large declines (the Dax dropped over 400 from his pivot at 11875!) I expect to see a bit of a consolidation day, especially if the S&P holds around this 2100 area (25ema support at 2098). Chris Williamson, chief economist at Markit, said: “A stalling of US economic growth at the start of the year rules out any imminent hiking of interest rates by the Fed. “The slowdown looks temporary, as a rebound from the first quarter weakness is already being signalled by forward-looking survey data, but the sustainability of any upturn is by no means convincing yet.” On the positive side, the Fed will keep interest rates low for a while longer.
US & Asia Overnight from Bloomberg
Asian stocks dropped, with the regional benchmark paring its biggest monthly gain since September 2013, as the Federal Reserve downplayed weak U.S. economic growth and kept raising interest rates on the table for later this year.
The MSCI Asia Pacific Index fell 0.5 percent to 155.69 as of 9:01 a.m. in Tokyo, heading for a 6.4 percent advance this month. The Standard & Poor’s 500 Index slipped 0.4 percent on Wednesday after data showed the U.S. economy grew just 0.2 percent in the first quarter, with Fed Chair Janet Yellen attributing part of the slowdown to “transitory factors.” E-mini futures on the S&P 500 Index fell 0.1 percent.
“The jury is still out on whether the weakness points to a more structural slowdown in the economy,” Mark Lister, head of private wealth research at Craigs Investment Partners Ltd., which manages about $7.2 billion, said by phone from Wellington. “While plenty of people are expecting the rate hike to be pushed back even to 2016, its important to watch the next piece of economic news to gauge whether the weakness we’ve seen was a one off or the beginning of a trend.”
Analysts had been expecting the U.S. economy to expand 1 percent in the first three months of the year. A run of disappointing data has cast doubt on how quickly the Fed can meet its goals for full employment and stable prices. Policy makers have said they expect to raise rates this year for the first time since 2006, and that their decision will be guided by the latest data. Economists at Bank of America Corp. cut their second-quarter growth forecast to 2.5 percent from 3.5 percent.
Topix Drops
Japan’s Topix index dropped 1.1 percent, its biggest decline in a month, as markets resumed trading after a holiday. Industrial production slid 0.3 percent in March from a month earlier, compared with estimates for a 2.3 percent decline.
South Korea’s Kospi index lost 0.4 percent. Australia’s S&P/ASX 200 Index declined 0.3 percent, New Zealand’s NZX 50 Index added 0.3 percent. Markets in China and Hong Kong have yet to open.
Chinese stocks trading in Hong Kong on Wednesday capped their first back-to-back loss in a month, with the Hang Seng China Enterprises Index sliding 0.8 percent after commodity shares slumped on lower profits and brokerage Citic Securities Co. restricted the number of shares eligible for margin lending. The move comes a day after the China Securities Regulatory Commission warned new stock investors not to overlook the risk of investment losses. [Ref]
FTSE Outlook
As mentioned above if the S&P holds the 2100 area for support then we could get a bit of FTSE support too. The ASX200 led the way pretty well yesterday with their bearish Wednesday giving the FTSE one of its own, and Thursday’s ASX action has been mostly flat, ranging between 5750 and 5800. The initial levels of interest on the FTSE today are support at 6945 where we have the bottom of the 10 day Bianca (20 day is slightly higher at 6952), and the daily pivot for resistance at 6983. As I write the Moving Averages I use are still bearish, hence why I am expecting an initial dip, though if the Dax bulls last night (rising from 11370 to 11490) are anything to go by there are still some buyers around. Below the Bianca channel the bottom of the 10 day Raff is 6923 and coincides with yesterday low, so could be a level to try for a bounce, though 6900 below this might well be stronger. However, I think we are more likely to see a bit of optimism today, and a if the pivot breaks then we are looking at resistance above that at 7023 and 7058, though I think testing these levels might see some bears appear. A lot will depend on the S&P today I think as its at a fairly crucial juncture.
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Absolutely no idea today.
Like you Nick, mildly bullish, calm after the storm and all that, but I think a silly bit of ‘news’ (Greece?) could see the DAX fall apart to 11000 and drag us with it.
Would probably short around 55 (50 now) for a drift off this morning.
short 60
Bit of a coin flip today really
small short @ 7060 how many poimt stop are you using?
12 mate, manual with 3 x 1 min candle confirmations of break.
taken 15 points. out for bit
Nice one rog, slowly slowly catchee monkey 😉
I’m still hanging in there, just.
That 3 o/c 1 min confirms can cost a bit of money, but I treat it as insurance.
Have you survived yesterday, rog85? I remember you were losing on long and couldn’t get out.
It got a bit emotional all round yesterday Jack. How you doing, ready to take on the world today?
i got out last night after the FOMC news around the 7080 mark. wiped my profit for week but ill learn from it. Staying small for next week or so till the elections over. Good luck mate
Stop to break even
Yesterday’s arrows were brilliant, Nick. Thank you.
No problem.
Autochartist have just come up with a Sell, target 6887.4442!
Time to cover my short then lol.
Ha ha, I don’t think I have seen one be right yet. The PIA one seems a little better?
Yes, maybe a bit, useful to look at to just see their logic sometimes.
Should have longed as well at 42, but feel rather lethargic, like the markets.
Short again 65 stop 72.
Here we are again. Out and long at 43, stop 36.
Stop at 50.
Out and short at 65
Out at 47, let’s see what the Yanks do.
Gold broke down 1200, indices to go up?
Personally Sam, I think the gold futures market is broken and irrelevant these days.
As always, I love FTSE market commentary provided on this site.
Are there any similar resources for DAX and U.S. Markets?
Not sure if you are being serious or not, but this was my Dax commentary that I put in the members email:
I thought 11400 was going to hold a little bit better than it did last night, and had 11370 as a stop area, however, the bears had other ideas, at least initially. The bulls fought back from the 11360 area though to add over 100 points, and its stayed that way overnight so the bears haven’t got it all their own way. The short off the pivot at 11875 yesterday was rather good, though I (and I doubt many others) held for a full 500 point drop. Unfortunately! Todays pivot is 11571 so initial resistance there, and as per the others has a bearish picture to start the day. Support is 11360, 11344 (10 day Raff), 11300, 11288 (20 day Raff). Resistance above the pivot is at 11740, 11780 and then 11860 (25ema on daily).
S&P I maybe was a bit too optimistic:
Well, if you have read the above you probably have worked out that I have a bit of a gut feel that this 2098/2100 area is going to hold and we are going to get a final bit of bullishness towards 2140 before a much larger decline. The daily EMAs are still bullish, and the 25 is offering support at 2098.5, which is where we also have the 10 day Raff channel. Might be worth a long here, but with a tight stop, say 2 points. Todays pivot is 2106.5 so there is initial resistance there for an early dip down to 2098, then maybe some bullishness creeping in. There are a cluster of resistance levels around the 2115/2120 area which the bulls will need to break. Looking at the 30min chart, the EMAs are still bearish, so don’t go full bull until the 10ema crosses back above the 25ema. So, short off pivot at 2106 > 2098 > 2115+ is the path I am thinking.
Yes I was being serious, it’s a great resource. Thanks for the info, I didn’t realise you also done analysis for other markets as well.
Will look into membership 🙂
Thats great, I am glad that you find it useful. Sorry for the delay in replying, have been out all day today.
Yes I started doing Dax, Gold and S&P in the members email. Will update that page, thanks for the prompt! This is a sample of what the members email looks like – http://us8.campaign-archive2.com/?u=4c371ed414543182c43fe1d57&id=bd7f929da1&e=b2b43b7d5d
Hi Nick, yes I was being serious, it’s a great resource. I didn’t realise you send analysis of other markets to your members, it doesn’t say so on this page: https://www.hilsdentrading.com/ftse-alert-service. Is analysis of other markets included in that membership? Cheers.
For some reason your 2 posts were marked as spam, not sure why!
in and out shake it all about day. got back 30% of yesterdays losses.
Risky 26 long stop 18
Out for 5, don’t like it rsi going up, price going sideways, bad sign for me
tmpf short at 60 worked today thank you very much mate!!!!
My pleasure mate, just don’t ask for your money back if they go wrong 🙂
hahahaha we all dont know mate. we all try help each other. scrapped back 70 % of yesterdays losses so happy at moment
long at 7030 stop @ 22
I should have followed you this time lol What you looking for 48/50?
out @ 38. 8 points. not sure right now
where we going next tmpf??
if we see 7060 small short??
I’m just trading a stock 5 minute 10 period rsi day rog, no magic.
Looking at buy around 20, sell around 75, ideally with resistance confirms and dependent on the action.
Neutral/bearish at the mo 48, keep an eye on the DOW it looks very uninspiring to me, and may test <17900 soon.
Good luck, stay small and keep realistic stops in.
small short @ 6952
Beware the mad half hour 4 till 4.30
Well, on that bum note of bottling out on a classic closing rally, I shall say cheerio till Tuesday, off for a long weekend.