Good bull charge yesterday, build on it today, 6750 resistance

Good morning. Well, I thought it was all going to go very wrong yesterday and the 6700 call was pie in the sky. However, the bulls appeared as we hit 6644 and sure enough 6700 was hit. I was just a bit premature with the 6660 level, and I guess the market wanted to trip some stops. Also a new record for the Dow in the process yesterday, closing above 16000 for the first time ever. Overnight, prices have held steady and all being well we push a bit further up today. The slightly frustrating thing with yesterday was that with 6660 breaking I was all set to go long at 6630 where we had the bottom of the daily channels and had the SMS all set to go. But it didn’t quite reach that level. Interestingly, the S&P futures didn’t dip at all while the FTSE shed the 30 or so points at the open –  a decent sign that the move will more than likely be reversed.

I am still feeling bullish for today and expect that if the support level of 6675 holds then we will get 6735 which is mid way between the 2 Bianca channel tops. If they break then the top of the Raff channels will be in play, with a top level around 6760.

Asia Overnight from Bloomberg

Most Asian stocks rose, snapping a three-day loss on the regional benchmark index, as a gauge of mainland Chinese shares traded in Hong Kong headed for its biggest weekly advance in two years.

The MSCI Asia Pacific Index added 0.2 percent to 141.35 as of 2:12 p.m. in Hong Kong, with about three shares rising for every two that fell. The measure advanced 9 percent this year through yesterday as investors bet the Federal Reserve will continue monthly bond buying into 2014. It is down 0.3 percent this week.

U.S. stocks rose, sending the Dow Jones Industrial Average to its first close above 16,000, as data showed improvement in the job market and companies including Union Pacific Corp., Johnson Controls Inc. and Ace Ltd. said they would repurchase shares.

Investors are pouring more money into stock mutual funds in the U.S. than they have in 13 years, attracted by a market near record highs and stung by bond losses that would deepen if interest rates keep rising. Stock funds won $172 billion in the year’s first 10 months, the largest amount since they got $272 billion in all of 2000, according to Morningstar Inc. estimates.

U.S. Futures

Futures on the Standard & Poor’s 500 Index lost 0.1 percent today. The gauge gained 0.8 percent yesterday, snapping a three-day decline, and the Dow Jones Industrial Average closed above 16,000 for the first time. The S&P 500 has jumped more than 25 percent in 2013, poised for its best yearly gain in a decade.

Minutes of the Fed’s last meeting published this week showed policy makers expect ongoing improvement in the labor market to “warrant trimming the pace of purchases in coming months.” Fed Bank of St. Louis President James Bullard also told Bloomberg TV that a reduction in the Fed’s $85 billion-a-month bond buying program was “on the table” for next month.

The U.S. Senate Banking Committee yesterday voted 14-8 to approve Janet Yellen as the next chairman of the Fed, sending the nomination to the full Senate for approval.

U.S. Unemployment

U.S. jobless claims dropped by 21,000 to 323,000 last week, the fewest applications since September, the Labor Department said. The median forecast of 47 economists surveyed by Bloomberg News called for a drop to 335,000. Another report showed wholesale prices fell for a second month in October and the Philadelphia Fed’s index of manufacturing in the region dropped to 6.5 in November, trailing the median economist estimate for a reading of 15.

FTSE Outlook

ftse 100 prediction
ftse 100 prediction

One day good news means tapering is a worry and the market drops, then a speech that tapering will happen at some point and it drops further, then more good news, tapering is forgotten about and we rise. It will be nice when they finally commit to some sort of plan! As is always the case, the headlines and “reasons” for the moves is just simply matched to what happens. Anyway, today’s pivot is 6674 and I am thinking that will act as support today and as mentioned above I am still feeling a bit bullish for the moment. I still think the S&P wants that 1810 level, possibly 1814 but might run out of steam at that level. A good shorting area there I feel.

Initial resistance as I write this is at 6700, and if that breaks then the  FTSE “should” get 6730ish. We have the top of the Bianca channels there, both the 10 and 20 day, so we may stutter there, but with the Raff channel tops around 6760ish then there are some fairly key resistance levels coming up.

With the arrows below I have put in a dip to the pivot though it feel a bit 50/50 as to whether it will do that, possibly a dip from that initial 6713 area where there is a fib pivot and ProTrend resistance line.  As per the trade plan below I have shorts at the resistances, and the long off the pivot, however if it looks like 6700 is turning to support then longs up to at least 6730 should be ok. Usual Friday caveat though!

230 Comments

  2. Seems to have ranged pretty neatly within the one and a half day channel this morning – peaking and now hovering at the bottom but still above yesterday’s opening and Nick’s ~ 6680 level. So the question is? Can we expect further drops or is it going to shoot up? Always hard to tell 🙂 It’s a (calculated) gamble! 🙂

      1. It has been sitting at the bottom of this channel for what seems like ages… their is a big break on the horizon… 🙂

        1. Are you positioned at all atm? I have a FTSE Short at 6702 and a DAX short at 9225… Both stops to b/e now.

          2. 6702 is at the top end of the one and a half day channel (6705). I can see why traders are shorting at that level .. 🙂

          3. Ideally i’d like to close my short before US markets open as they can be rather bullish as we know lol… I agree with Nick that SPX wants 1805-10 level

  7. I closed all FTSE Shorts at 6676 and DAX from 9225 closed at 9188 🙂 Good mornings work. Not looking to go Long, but will watch closely for highs to sell

  9. Ive got my full short from 6700 in….havw a big sell signal on my side..dnt have time to explain now but will give full view later…

    1. Still holding are you? Could well drop further, however with US Markets this afternoon pushing for double top or new highs, and it being a Friday. Im happy to have closed my FTSE & Dax shorts for a nice weekend profit. Will watch closely this afternoon all the same 🙂

      1. Sam at this rate i believe santa rally will start wen we cross above 6600.. meaning we may dip below jus a bit. And its going to be very very very choppy.

      1. Careful of US markets this afternoon, could be wrong but suspect a bit of a rally seeing as they love it so much. If FTSE gets back to 6700 and SPX hits 1805 then im shorting HARD!!!

        1. I know, that’s why I was annoyed. You were right. But it still was a gamble. Other prediction sites where saying about longs. Nick also.

      1. why are u trading every week? why not spreadbet 100k every year on 25th and make a killing with santa rally?

    1. In the long term sense yes…from when ftse boucned from around 6400 i believe he were in the long bull scenario…however i dont think any of us trades £100 a point and be willing to take a 400 point loss lol.
      I DO trade £100 a point but thats risking 20-30 points at most.
      But now all my indicators showing bears are here (but going to be choppy).
      BUT dont get too carried away with the down trend because it will bounce faster than u can blink.

    1. not being an ass but most liekly gon hit 6650 today..and the way it is right now..we might be seeing 6600 next week

        2. scotty.. thats fine..im not trading Dow. and before u say when dow goes up ftse will as well….not likely..at least not in the same ratio..which can be seen over last several days..like yesterday snp up 0.8% but ftse…up 0.0%
          and in my view im quiet certain dow/snp/dax wont be falling MUCH, they are total bull markets, making ftse much harder than usual to trade. Hence a drop in ftse is to not be taken too lightly as it will bounce very very quickly. but the way its trading right now.. a very choppy drop is coming

  28. Well im LONG FTSE 6664 and LONG DOW 15995… Im on the bull side for this afternoon. But Hash i agree that we’ll see sub 6600 soon, maybe even next week. As soon as SPX hits that 1805 i think we could see a rapid drop.

      1. No stop as im watching it carefully. I only put stops on when i leave it overnight, will put stop at b/e though when got a bit of a gap.

  30. We have 16030 as key level for today. We may see 6730 area if that level in DOW breaks.
    and 6730 is the neckline of that monster IHS

    let’s see

        1. miners, miners, miners is what I remember from Brenda Kelly 😀
          f***gold miners in Britain

  42. me too senu im long from a few days ago as 80’s; but unlike the guru ahwab I thought id be clever and hold on.. so far not paying !!

  46. Retail 60% long at 6686… compared to last couple days it was roughly 50 50.
    showing more direction that ftse headed down .. but i cannot stress enough this will be very choppy..u maybe seeing 6700 again n then spike down.

  48. Hash – closed all longs for nice profit. Order to Short FTSE at 6695 & 6705… Let’s see what happens

    1. good good. im still holding. was gonna add at 6688 then realized if i do that then im just being stupid..gotta have patience!

      1. no not more closed my long earlier at 6686 … and then considering a 6667 may not retreat shorted at 6686 closed the earlier short at 6676 .. nearly took a call for long but impulse said don’t bet if u r 50% sure 🙂

  51. Lonnnnñnnnng this one closing just below 6700 will book 22pt profit and head to pub have good weekend all

  54. Well, not much happened with Dow, may be this hour will be crucial, if it pushes forward FTSE around 6700 mark, will put short on then 🙂

      1. Yes thats true, at all time we can see some bullish when market opens, but today it looks a bit bearish!

  57. So FTSE leave me with 2 choices :
    Or it breaks one of this IHS I see and we go up or we go visit the bottom of descending falling wedge (bullish pattern) at 6540

  58. I think we visit sub 6600 prices next week… May see a sharp sell off once US markets play with new highs for a bit

  59. Had two great positions this week yet failed to make the most of either. First had a long from 6670 which I closed far too early at 6675, and then a short position today from 6695 which I closed far too early again at 6685. I guess I need to stick to a certain bias, just this market is so hard to trade at the minute. Ohwel atleast I didn’t lose money. Hope for a better week next week. Have a good weekend everyone, GL.

    1. And will not stopped until I see that IHS. If it goes 6500 I will not closed it. Maybe I add in those levels

      1. And now I believe we may go down sharp, as FTSE is just not interested in more highs as the yankees are.

    1. yes i am holding short till atleast monday (maybe whole week, hope the short interest dont kill me as its a big position LOL).
      Right now still got a sell signal (not as strong as the one before).
      probably see around -2% correction in ftse in coming week or 2…
      Dow n SnP prob not more than -1%.

  71. Still think ftse is trying to get to somewhere between 6550 -6580 before takes off again , taken short from 6700 should at least hit 100 day ma on daily chart

    1. thats exactly my view…close shorts at 6600 and build tiny longs from there
      6600 in steps of 20 points down add more to longs,

  73. With dow in bull run, always good to buy ftse on dips. Hope they don’t take any decisions in US at Sunday night.

  74. .. Listen up, anyone looking for an implausible excuse for the market to drop on Monday, it’s going to be a non event like, Iran, Saudi, or the China no fly zone, buy the dips 🙂

  75. Personally believe monday will be similar to last week..maybe a small upside on ftse…and then rest of the week ftse dropping 1-2%

  78. Not sure Assad the only thing that the markets may not like about this deal is that Israel feel that America has betrayed them… And as we all know there is a lot of there money in America.

  79. Review

    S&P 500 continues to surge and remains on course to meet last week’s target of 1810-20 by next Friday 29 November. Upward momentum is expected to increase in the short term unless the Fed moves to reduce QE, so withdrawing market support. Janet Yellen considers the market not to be overheated at this time and this view has been well publicised.

    Last Friday the Dow cycled above 16000, confirming the prediction of 11 November. It is already in the range 16050-100 expected last week by next Friday 29 November. As above, the outlook is expected to remain bullish while QE routines stay unthreatened.

    In contrast, the FTSE has lagged the US indices, declining from its last high of 30 October. However, there is some evidence now that the FTSE is pulling out of its negative incline. Last week’s expectation remains unchanged; a modest 6750-75 by the end of this week, which sees the end of the month.

    The DAX had a quiet week in terms of directional movement, but still seems game to clock new highs around 9300 during this week as anticipated last week.

  80. QE is the only thing keeping the market up…. Breadth indicators looking more bearish now, so still short on Dax and sideline for the rest

    1. I wish you all the best with your short Luke, but I think you might be against the trend next week. Re QE, I wonder if the law of diminishing returns is setting in.

  81. Thanks Jim yeh the trend is still up thanks to QE but my Dax is longer term trading, only have day trade when I have the time longer time frames sort my life better when I trade on shorter time frames I make to many mistake.

  82. DAX S&P and DOW are VERY STRONG bull markets.
    FTSE on the hand not soo much.
    my view is monday ftse has a small upside…rest of the week will be either drop or sideways movement as we experienced last week.
    But most likely we end up 1-2% down on ftse next week

    1. Absolutely agree about S&P 500, Dow and DAX. Storming! We’ll have to see about the FTSE – I’m guessing small gains next week – nothing earth-shattering.

  85. Have similar views to all although at these levels and everyone super bullish i start to expect the unexpected. It may come from US treasuries at 3%. Equities always behind the curve of the bond traders. Starting to lay long term bets myself to the short side although no doubt will see 16200 in the dow IMO which is now only a stones throw away even as high as 16400. It would be quite unbelievable if the dow and snp continued like this for another 4 weeks..

  86. Dom imho when there is 9 bulls to every 1 bear or 90% of trader are bullish then I believe that following the herd is double dangerous, another thing that currently worries me is that private investor always tend to start buying share late into bull runs with current data showing that a lot of money has come into the market from private investor in the last 4 weeks worries me the last time that amount of money enter the market was in 2007 just before it all went wrong.
    I am not saying this will be the case this time but history does have a habit of repeating itself.

    1. after reviewing forecasts for next week (which have changed)…im staying on the sidelines..if necessary small long.

        2. honestly..my indicators still showing short..if not short then a very very big upside on ftse.
          But most of the time when it shows short then its short…END OF TOMORROW will def change the indicator..so lets see.

  88. Don’t be so quick.. Has a short squeeze feel to it… I had a nibble of a short at 6700 as feel minimum will attempt a gap fill tomorrow

  91. im long as you guys know. ftse trading like turd as banks and miners not really playing. however senu sam might want to keep and eye on barc and rio. barc may test 260 and break (bon chance.) . Buth othw my bull patience will run thin by eod today !!!

      2. may be on a campaign for “International day of elimination of violence against women” … just kidding lols…

  95. im long as you guys know. ftse trading like t*rd as banks and miners not really playing. however senu sam might want to keep and eye on barc and rio. barc may test 260 and break (bon chance.) . Buth othw my bull patience will run thin by eod today !!!

  98. Good morning and another frustrating morning.
    The party as always is elesewhere.
    Why the f**** I still hold and invest in FTSE ?
    I need to re-think my investment strategies.
    But DAX is unstoppable and it’s so hard to buy at those levels. I’ve been saying since it was at 8000 😀
    Maybe DOW or SPX 😀
    It’s really hard and harder is getting …

    2. Been looking at the DAX too, just broke resistance 3 today. Maybe time to start day-trading the DAX… 🙂 Anyway, scooped 10 points today on the FTSE from 6702 🙂 But the FTSE is waaaaaaaayyyyyyyy too difficult!

    1. He closed his longs on THursday, and took off until today. He looked to be a bear at this range. Ahwab, your comments pls.

  100. Morning guys, hope you all had a good weekend. Very boring morning on the FTSE so far….

    On another note, I have picked up some pdf copies of 3 great books if any of you guys are interested.
    • John J Murphy – inter-market technical analysis
    • Marcel Link – High Probability trading
    • John L Pearson – A complete guide to technical trading tactics

    My favourite is definitely John J Murphy, great analysis. Let me know if any of you guys are interested, I’m selling all 3 as a bundle for just £40.

    Just reply with your email if your interested and i’ll get at you 🙂
    Thanks

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