5860ish support today, rise to 5940?

Support 5872 5870 5863 5854 5751 5747
Resistance 5906 5920 6006 6055

Good morning.
Market Summary for Friday 5th February
The FT100 traded around the 5900 level during Friday morning waiting for US job data at 1:30pm UK time.
The market then moved sharply lower after the January U.S. jobs report appeared to keep alive the prospect of a Fed rate hike this year.
Non farm payrolls increased by 151,000 jobs last month, below the 190,000 expected by economists. Despite the expected slowdown in job growth, the unemployment rate fell to 4.9 percent, the lowest since February 2008, and average hourly earnings increased 0.5 percent, suggesting the labor market recovery remains firm. The FT100 closed at 5848 with little buying into the close. The commodity sector was again strong with interest rate sensitive sectors weaker.

US & Asia Overnight from Bloomberg
The dollar rose for a second day against the euro and yen as investors looked toward Federal Reserve Chair Janet Yellen’s testimony to Congress Wednesday for signs of whether markets are underestimating the odds of a near-term interest-rate increase.

The greenback climbed after a U.S. employment report on Friday showed wage growth exceeded estimates, bolstering the case for the Fed to lift rates this year. Futures pricing for a move before year-end climbed to 53 percent Friday from 46 percent the previous day. The yen weakened versus Australia’s dollar as equities in Japan pared declines and the nation reported a current-account surplus that was smaller than economists had forecast.

“Markets are looking to Yellen’s testimony this week to see whether she will still leave an option open for a March rate increase or sound dovish,” said Ayako Sera, a Tokyo-based market strategist at Sumitomo Mitsui Trust Bank Ltd. “The dollar can easily swing one yen up and down from 117, but, after the payrolls data, 117 seems to have become a magnet.”

The dollar rose 0.3 percent to 117.20 yen as of 1 p.m. in Tokyo, following a 3.5 percent slide last week that was the most since 2009. It advanced 0.2 percent to $1.1145 per euro, after rallying Friday from a three-month low. The yen slid 0.1 percent to 130.61 per euro and fell 0.5 percent to 82.99 per Aussie dollar.

Markets closed Monday for the Lunar New Year holidays include those in China, Hong Kong, Indonesia, Singapore and South Korea.

Payrolls, Wages
U.S. employers added 151,000 to payrolls in January and the unemployment rate dropped to an almost eight-year low of 4.9 percent, a report showed last week. Hourly earnings rose more than estimated after climbing in the year to December by the most since July 2009.

“Stronger than expected U.S. wage growth has called into question last week’s accepted wisdom that the U.S. dollar would fall as moderating economic growth pressured the Fed to delay its rate hike program,” Ric Spooner, a chief analyst at CMC Markets in Sydney, wrote in an e-mailed report.

The Bloomberg Dollar Spot Index rose 0.1 percent to 1,229.37 after climbing 0.6 percent on Friday, its biggest advance this year. It was still down 0.3 percent since Dec. 31. Japan’s Topix index of shares was 0.1 percent lower after paring an earlier decline of 1.7 percent.

Japan posted an 18th consecutive current-account surplus in December. The excess in the widest measure of the nation’s trade was 960.7 billion yen ($8.2 billion), from 225.9 billion yen a year earlier, the Finance Ministry said Monday. The median estimate in a Bloomberg survey was for a surplus of 1.05 trillion yen. [Bloomberg]

FTSE100 Outlook and Prediction

FTSE 100 Prediction
FTSE 100 Prediction

Todays pivot is 5870 and the 2 hour chart is showing some support at the 5860 area. With China celebrating their New Year and their markets shut the FTSE100 has drifted upwards overnight, and I expect that we will have a bullish day today with a rise towards 5940. If we get a dip back to the pivot and also the 25ema on the 30min chart at 5870 area then I think a long here could well be a decent play. The 2 hour chart is also brewing a bullish cross with the 20Hull crossing above the 100Hull, and this is showing support at 5855 currently, if that cross takes place. So, a rise to 5940 looks possible today though at that point there is some strong resistance which may well stops the bulls for the moment. I imagine they are desperate to exceed 6000 again before too long. We had some more bearish press over the weekend (here) so another little rise first before any major sell offs would fit in. So, for today support around the 5870 area for a rise to 5940.

147 Comments

  4. Morning all,
    So I think Nick has it right for today, but I think we may dip a bit lower to visit the lows of last week.
    I will be buying the dips until we get that low.
    If this breaks, then I will change full on bear.

  6. Morning all,Germany seems to have changed the tone a bit.Kind of suspect the U.S might want to go up later though.

  11. Might be a very good time to go long. Cheap as chips if it rebounds back which it will during the day

  12. Hello chaps, just a flying visit.
    I’ve been losing concentration recently which is bad in these hairy markets, so I’m going into isolation for a while to hopefully sort that out.
    All the best, keep your stops tight and your fingers intact 🙂

  14. All crucial levels now…..5750 in Ftse, testing a break of 16000 in dow, 9000 in Dax, $30 in Oil…….I am very bearish and think we will see sub 5600 this month but till this afternoon it all looks oversold. Long Ftse @ 5940 for 10 target 70 stop 5930 & 9080 in Dax for 6 target 9125. Still holding my 50 lots of ftse feb 5500 puts which I bought around 15….currently trading 36! Like I said , Gold is telling us all something. GL GG33

  16. Panic Jack, let’s see how many people follow the advice of be greedy when others are fearful! Might not be many

  17. Problem is, everyone harbours thoughts of the Dow dropping 1000 points like it did in August last year and it makes it difficult to buy with conviction. I’ve just been stopped out in Ftse at 5730 for -100 & Dax at 9050 for -180, it’s a tough one to buy even when everything is showing oversold!

  19. Such drops normally result in some sort of long, but will it this time? And what the heck Nick’s long arrow? Will it work in the end? I reckon many people long. I also have one.

  20. Agree with you Paul that it is oversold but will be surprised if we don’t have a look at 5700 and 9000 first before a proper bounce. Would like to see it break and hold 5950 before going long.

    1. yes you are correct
      but hedge funds / pension funds see this sort of a drop to buy
      closed at 60 for 26
      but will actively look for further longs at break-outs

  22. Paul, still looking at this 5750 level as the neckline of a possible Head & Shoulders forming on the daily…..if broken I have the Ftse down to 5300 quite quickly, i.e my call for sub 5600 by end of Feb.

    1. Hi GG
      Patterns work only one way.
      A failure is just a failure, but you cannot deduce anything from a failure except just that.
      i tend not to look at daily for patterns
      i go from 2 hours

      1. Not true. Mass psychological behaviour ensues from patterns which can move markets significantly. Take them with a pinch of salt, sure, but don’t deny what they can suggest.

  23. Good Morning All,

    The 1000 point run might actually happen in the south direction I guess 🙂

    I’m long 9025 with a 20 point stop, still leaving the stop at 9005. I’m going into a meeting and watching it which is best thing to do either way. Will check around 1.

    GL All.

  24. Gone in on a long again – same price 5734
    this time looking for a breakout of 5760 to probably 5780 area

      1. well lets see then Argyle 🙂 . you been posting some good strategies here!
        we all miss tmpf when he is not here .

  27. The carnage is over for a while, all depends on the US now. If they want to sell a bit more then 5700 could be on the cards. Otherwise 5800 could be a realistic figure later.

    1. Depends what Brent does, no? If it hangs on to support at 32.70 area I agree. If it doesn’t, I don’t!

  29. tmfp
    .
    know what you are going through
    but….https://www.youtube.com/watch?v=1tGO1Y4FGpI
    .
    as a kid ….. I always tried to see the deeper hidden meanings in my favorite band lyrics………. until i saw an interview where they said ….. it was the magic mushroom or words just picked from thin air
    .
    just chill out……. the market is not going anywhere
    it’s just on magic mushroom or prices just picked from thin air

  30. Should have done like tmfp and had a few days off. Anyway, long at 5850,5800 and 5750, limit in at 5700, might get hit at that on the Dow open! Looking pretty sick at the moment but we’ll see.

    1. Thanks mate, I think I may have to be patient with this one though. Went a bit early on Friday with opener at 5850!

      1. Patience is the key. This will be back at 5850 during the week but maybe a few worries along the way.

  36. Personally Nick,I found it much easier to use how it was before.just in case you want any feedback?

      1. I think his arrows hide the fact he was hundreds of points out. If you followed his arrows today, you would have an empty account

  38. These market conditions are the hardest I think I have seen up to now……I’m finding it extremely difficult to form an opinion of any market direction at all………..!

    2. To be completely fair to Nick though Argyle,.how on earth can you predict a markets daily movements from first thing in the morning. I havn’t got a clue what it’s going to do in the next 10 mins.it must be very difficult to post a prediction early on sometimes.

    3. I’m short of confidence today Argyle,as much as I don’t mind jumping in I think today I’m going to take a back seat………I don’t like it at all…..yes It does look like a long is a good play……..but after a 500 pt drop on Dow it’s all abit too unstable for my liking ATM.

  39. Indeed Anstel. No sign from Asian markets of any major fall. Probably a good point to go long for the week.

          3. still holding – will probably regret it – but b/e
            5700 round number. If ( IF ) it breaks – we could see a good 30-40 move ( hope )

  43. Got out of that stupid loss at 9040 with a loss of 100, which is good cos I won 100 in the process so got b/e today. Next time I will not trust Nick’s arrows. And how many times I told myself this. I was holding what supposed to be a short winning trade, but no, we got a long arrow, it can’t be short so I went long.
    Now it may go up or down, honestly I don’t care. For the amount of time I was HOLDING sh..te the risk is not worth it. Jeses, forgot stops in the morning for the long 9192.
    Gosh, so much things to do.
    Conclusion: Firstly: weekend weakens your brain. Secondly: you need to put any SL even if you are taking a punt.

      1. No Nick. I had no stop. I was winning on longs at the bottoms of falls, and got quite a lot, but my first loss was still -160 to -180 or so, so when I closed the whole lot at 9040 I had won enough so that my loss covered it. I think I won 150 and lost 150 (calculated). It’s hard to explain. I should have had stop because it went to -200 at some point.
        Don’t take personal about arrows, I know I should have looked at it from my point of view. It’s me again with my lovely SLs. Groundhog day.

        1. Why I thought it was 100? Because I didn’t take into account the last win from 8990 area (it was added into account at the same time when the loss was added so I’ve never seen a higher number of my account at that point)

        2. Yep, they are just there for a guide, not a trading plan. This site, the arrows and the text are my thoughts, not sure why you always trade off them exactly. If you want trade plans you need to join as I have told you a million times. Sometimes the arrows are bang on, sometimes they are not. Its just an opinion, If you agree, trade it, if you don’t agree, don’t trade it. At 6 am we were bullish. Then it changed. Thats the beauty of the markets. You then change your plan.

          1. Most of the time they are spot on and I know that and I appreciate you are trying to help. I may complain emotionally on the spot sometimes so sorry about that, but later understand it was my fault, I made some mistakes today but also wanted to share my experience. It’s my SL problem. Nothing else. And going against my strategy 100%.

          2. I would have joined if I was trading consistently. Plus I don’t trade FTSE only Dax. That’s a problem.

      1. Hi Nick
        i longed as well 5716
        stop 06 – no conviction of this working till 5729 crossed
        opps and out

          2. yep – why indeed
            stupid me
            changed my charts to 15-5-1 – from my
            4-1-15 & 30-15-5
            i just do not like that 1 min chart. should never
            have changed.

          3. my 15-5-1 – crying out – go long.
            while my usual 30-15-5 – is saying – sit tight buddy.
            so 15-5-1 – I say R.I.P

          4. That’s probably fair enough this is the Dow Jan Support area,so up and down a bit for a bit before it picks a direction is reasonable.

          5. Counter trading – scary stuff! I thought the trend was your friend, and all that?

            That said, DOW bouncing off long-term support at 15,860 right now :O 😀 :O

          7. Trend.
            The seminars / the books / the maestros – follow the trend.
            But – the 4 hour trade or the 2 hour or the 30 mins or the 15 mins or the 5 or maybe the 1 min or why not the 30 sec
            Benjiw.
            Show me a trend. & i will show you an opposite trend.

          8. I think by “trend”, people tend to mean longer term, Paul. Measuring things on a nanoscopic level isn’t indicative of anything. It’s like measuring things in the quantum world.

    1. got to give it to you Argyle
      you do come out with these fantastic targets
      love them – 152 points away

      1. Not looking good at the mo but never give up hope. Had 3 trades over 200 points in the last fortnight, not sure I’m going to make it 4 though. I shall wait. Might be a mad rally in last 10 minutes to set the tone.

        2. With you Argyle, I’m getting close to running out of ammo! Seriously though, I’m surprised it managed to get through 5700 and last time it got to 5600 (or just under) it rallied extremely hard – as anstel will remember with glee! Anyway, am sitting tight and patiently waiting, but have got another limit in at 5650, if we see it.
          I reckon I’ll be watching the last 15 minutes of the DOW, they always seem to run it up hard after a lacklustre day!

  48. Is anybody aware of any positive news that could help this recover…..other than it being really well sold?

      2. I think when it does break to the upside it will break hard and anyone who is in should do well.i always found that often the Dow would rally after the Ftse shuts at 4.30…..see what happens…..but there’s loads of upside potential when you think the Dow was at 16450 ish on Friday.

      1. Thats a crazy decline from Friday on the Dow…… 600 + points. You would think people would buy stocks at these levels compared to Friday?i suppose we may get a surprise rally,that’s always a possibility! /

        1. Hi anstel,You were asking about Bianca earlier,well she is just trend channeling over 10,20 and 50 days,so you can trade within the channels when there is a clear trend i,e works best when all 3 channels basically align.Really simple system that works along with trade and risk management.
          http://www.biancatrends.com/

          1. Thanks WSF yes I think it was Havies said earlier he expected it to drop to the bottom of the 10 day bianca channel before bouncing……..I will have a look at it thanks for posting the link. We could just be setting up for one of those surprise rally’s by the look of it……I just want to get a good nights sleep though and have a break really though…….better not press any buttons! Good Luck.

    1. argyle
      one thing supporting your ideas, is that over 50% of the trades are placed at close or after close in the US or pre-market open

  50. I fail to see why anyone would buy this, I haven’t seen anyone give a decent explanation for why it’s down so much-I hope it does bounce for you but seems like you’re trying to pin the tail on a donkey’s arse with a blindfold on, in the dark!

    2. GG33
      probably better for you to take a couple of whiskies and for gods sake tie the blindfold…lol

    3. GG33, that is pretty much exactly what I’m trying to do. Simply, I don’t particularly watch it so am never going to be able to hit the tops or pick the bottoms so if I graduate what I want to do I should be there or thereabouts. As I said to tmfp the other day, I’m happy (if a bit sweaty!) to wear it a long way down. Let’s face it, it can only go down another 5700 odd points!

  51. benjiw
    i don’t mean to contradict anything you are saying about a trend.
    but the question is which trend do you trade
    I am sure Argyle will be proven correct, with his trend move, eventually.

    1. If you believe in what you are doing then more often than not it comes off. Currently 12 points to the good.

    1. Argyle
      so how long are you going to keep it for ?
      and on what basis was your trade ?
      so you are keeping your stop at 5650 ?
      Just gone short 5694 with a 10 point stop – which i will move to b/e
      just want to make sure I have not missed something and am in the wrong trade !

  55. Well as you’re that bullish and the options expire at the end of next week, just sold my 5500 puts back 50 @ 54.

    1. lol
      well insider info gives one an unfair advantage
      & sure don’t want to miss a 152 point move

  57. IG & Finspreads Paul, have to be honest, I am naturally bearish by nature but I have to side with Argyle-I think there is a small pull back to see if this 5830 level proves resistance, if it does I’ll be short with you. 152 point move, am I missing something?

    1. yes I was with finspreads then moved to worldspread which went bankcrupt, fortunately i was so bad trading that i lost only a couple of hundread.
      I am sure Argyle is correct, but am never sure if he means in the next few hours or days or weeks.
      also he never really gives any reasons for his trades
      never know whether to take him seriously
      that 152 points – his entry long was 5682 target 5850
      I went in short – 5694 – simple breakout trade and now b/e stop

Comments are closed.