If 6692 holds then bulls still in the game, if not…..

Good morning. Well the long side was definitely the side to play for most of yesterday, with the FTSE just failing to reach the 6738 target before some profit taking kicked in with a  dip to 6690. That is now a fairly key level and could act as fairly decent support for another push up towards 6738 (top of the 10 day Bianca) or more, possibly 6771 where we have the top of the Bianca 20 day channel and both Raff’s. Between them I also have 6756 as resistance. If we did get 6770ish then that would be a decent shorting area. We had 2 tests of the 6775 yesterday, the first one which I went long on for the run back to 6700, but it was the second one that really went for it. Unfortunately I didn’t go long a second time! Once again the rises are all based on the market believing that the Fed will be continuing QE, a believe that saw yet more records – 16000 Dow and 1800 S&P. Its worth noting that the bears didn’t short the hell out of those levels (the adage “Never fight the Fed” holding them back most likely), so even higher level might be on the horizon. 1810 is possible on the S&P, which would be around 16200 on the Dow at a rough approximation. Despite dipping to end negative I expect the S&P will regain that 1800 level. I also still think we will see a tapering plan mentioned at end of Q1 2014, starting April 2014.

Asia Overnight from Bloomberg

Asian stocks outside Japan rose, with a regional benchmark index heading for a four-day rally, as Hong Kong stocks extended yesterday’s gains amid optimism China’s economic reforms will boost growth.

The MSCI Asia Pacific excluding Japan Index added 0.1 percent to 478.23 as of 2:03 p.m. in Hong Kong. The MSCI Asia Pacific Index, which includes Japan, was little changed near the highest level since Oct. 30 after rising 3.2 percent over the past three trading days as China pledged to execute economic reforms and Federal Reserve chairman nominee Janet Yellen said she would continue U.S. stimulus.

“The market is still optimistic about the detailed reform plan announced” by China, said Teresa Chow, a fund manager at RBC Investment (Asia) Ltd., which oversees $1.5 billion. “Since Hong Kong and China markets are underweighted by many fund managers, some of them might want to increase their weighting.”

U.S. Futures

Futures on the Standard & Poor’s 500 Index gained 0.1 percent today. The measure dropped 0.4 percent from a record yesterday. U.S. stocks have risen for the past six weeks as Yellen signaled she will continue stimulus efforts. New York Federal Reserve Bank President William C. Dudley yesterday said he’s “getting more hopeful” the U.S. economy is gaining strength as the drag from fiscal policy wanes. The central bank’s monetary policy is likely to be accommodative for a long time, he said.

The Federal Open Market Committee won’t taper its purchases until its March 18-19 meeting, according to the median estimate of 32 economists surveyed by Bloomberg News Nov. 8.

“The direction is up for everybody,” said Mikio Kumada, a Hong Kong-based global strategist for LGT Capital Partners. “We are in a positive bull-market environment. The global economy is growing, Asia has been underperforming for many years and valuations are not expensive.”

FTSE Outlook

ftse 100 prediction
ftse 100 prediction

As with the Dax and also yesterday’s movement I think it makes sense to buy any dip to 6692 today for another bounce today. However, with the 20 day Bianca channel coming down to 6771, and in fact turning down as well, I think that the upside won’t keep going till Christmas just yet. I am thinking that we might get another dip and then a rally to kick in mid December. The Raff channels are a little bit more optimistic for today, with the tops for both the10 and 20 at 6773. Therefore, if that level is seen I am shorting there as 3 daily channels all flagging 6770 is worth sitting up for.  We have a pretty decent 30 minute ProTrend channel in play, with support at 6685ish and resistance at 6750, so I expect that we will stay within that channel for today, barring any adverse news. The blue arrows are therefore my main focus, though if we exceed the top of that channel to 6770 then that’s a decent shorting area. If its all going pear shaped for the bulls today then if prices break below 6670 we could be looking at the bottom of the 10 day Bianca at 6617 or the bottom of the Raff’s at 6600.

130 Comments

  1. hey guys & gals, WE HAVE A WINNER!
    Didn’t Dave and ?? have a £500 bet for which would come first Dow 14500 or 16000 ? and we hit 16k this week!!!
    So who owe’s who???

  2. Al …. It was Nelly.R and myself . I emailed him on 8th Oct when we were going down to ask if he was good for his £500 bet … And heard nothing . He has disappeared so I took that as a vote of no confidence . No doubt he will appear now and claim … But the bet was off from 8th !!

    2. Dave never had an email of you a bet is a bet dont welsh out now. i dont want the money give to a charity picked by nick

    1. My view Luke, don’t know if Nick agrees, Carl Icanh didn’t cause the 70 point drop in the DOW last night from about 16010 to 15940. My opinion? It was the usual last hour close/adjustment of positions, mostly shorts booking profits from the 100 or so point ‘manufactured’ rise.

      CNBC as usual talking ‘BS’!!

  6. So what are we supposed to do here? It has already broken through 6691; are we supposed to wait to see if if tests/’bounces off’/floors through Support 1 @ 6686.36. It is tempting to take a long if this baby is about to take off. Or is it just going to be a ‘drift down’ day?

      1. No, I am sure, so not trading… no point in trading just for trading’s sake (and losing) … I’ve been there before… the FTSE will be back tomorrow… and the day after…

  7. I recall it ‘bounced off’ Support 1 yesterday before it took off, because that is where I put my initial long… but that’s another story… 🙂

  9. I’m not going long at the mo; as I type the 5min, 15, 30 and hourly indicators are all saying ‘Strong Sell’, only the 1 min is saying “Strong By”.

  10. Moving more towards “Neutral” now, just waiting to see if there is a sea-change at work before a position. I want to know what way this is heading…. don’t we all… 🙂

  11. The technical indicators for the daily are saying “Neutral”, looks like to good go either way, and with no clear indication – I’m out! No trade!

  14. 1 min, 5 min at Sell now, 15 and 30 at Strong Sell…… don’t fancy going long… or short either 🙂

  16. Now we have moved to a Buy on the 1 min, going to watch this a while to see if it goes a bit further North towards Nick’s 6691 ‘buy the dip area’, looks like it hovering in ‘No Man’s Land’ at the mo priming for a move either way.

  18. come on dave show us the money
    Dave never had an email of you a bet is a bet dont welsh out now. i dont want the money give to a charity picked by nick

    1. Dave you sound like a politician trying to get out of a sticky one
      Show us the money. Its xmas almost give the £500 to a charity picked
      By Nick..

  21. Current view of mine is quiet different to that of Nick (hope hes wrong…lolol).
    With the way markets are going I believe the market is to drop from 6690 level to atleast 6650. I have a short from 6686.8 right now. holding till market close

  22. Nelly …. If you can explain why you have a different email when you suggested setting up the bet, then we will progress with this discussion ? Anyone can see the dialogue at the time and you clearly gave me the email add I posted earlier .
    There’s only one sticky one here pal ….

    1. Dave stop nit picking the 8th oct the price was 14776
      end of story. if you dont and wont pay thats up to you.

  26. I went long at 6694.3 – F!”£ it :-), if it drops to 6680 – position closed! Desperately want to make up for yesterday’s loses – I know! lol 🙂

  27. Still long at 6680 since half 8, don’t know why people are shorting atm. To those who are please indicate signals?

    1. ahwab lets discuss because im short!, top for ftse before 6780, then 6770 then 6730. to me 6690 looks like a turning point either up or down.
      59% of retail traders now holding long positions (last nite it was 52% holding short).
      Its a bit of a risky short i admit, but thats where im leaning towards.
      Also tomorrow reports are to miss their estimates (DE and US, not really relying on that) but can cause the markets to slip.
      Please tell me why i can be wrong!!!

  28. Check posts on 22nd May …. Little boys shouldn’t cry wolf Nelly … If you are actually Nelly.R or Nelly. R ( the space is a little but if a giveaway) .
    Ill pass on the payment as you have false contact details ….

  29. I’m still Long as per reasons outlined earlier. If we break the 6696 and 6702 levels we could really see it move this afternoon. Especially if US markets recapture highs

  33. Retreating from 16000+, the Dow met good support around 15950. It shows no sign of tanking! Currently on course to traverse 16000 again and make for 16050. Strong 1 hourly growth channel holds good. Might energise the FTSE on open.

  34. im ashamed that i entered the short too early, I’d now re-short at 6709 (if the market stays this way!

  35. We’ll I don’t wholly disagree with your short but just sceptical as why short now, as I consider today to be a rise to ready itself for tomorrow’s fall. DOW still looks strong and with nothing happening today I can’t really see anything worth shorting. Personally looking to short @ 6720, though I understand you jumped in early as you saw it drop a bit…

    1. I was placing my short for tomorrows fall…didnt think it would rise much today. i mean not like it was a big rise for me to close a short from 6686.8 at 6700..But i think it might be able to go a bit higher.. as writing this now its dropped back to 6692.

  37. We’ll we haven’t really seen any new territory yet, I had long @6680, still holding until it breaks 6670

    1. Mine got hunted to at 6880, but I just let it go, it will be interesting to see if the FTSE ‘re-gains’ ground after that tanking which will have wiped out a lot of stop losses. If you go long again, it will probably end up tanking again. I am beginning to think that this is one big scam to suck the money out of the punters.

      2. Yes, it always happens to me when my stakes are higher. At minimum stakes it doesnt seem to happen that often.

          1. I have gone long again splitting my stakes into 3 trades all at around 80ish with different stops levels. Lets see if all stops get hunted.

    1. ok lets see. if we do manage to close below 6686 then im holding my position till tomororw (may even double it..but lets see)

    2. if this happens, than price closes again above T-Line (its starts to slope positive) for 2nd day straight. 3 more days above and we are clear for a renewed FTSE

  42. I can just imagine people losing money during these situations 20 point swings…

    Ps Hashmash, just a note I plan to sell 6710-6720ish.

    1. Truely Ahwab, I agree with you.
      Incase I lost 400 bucks this morning bcoz of that swing. lessons are costly in trading.

  44. The dividend is 7.4 points today. So if you have bought the market at £10 per point, then you will receive £74 in dividend as of 4.30pm today. The FTSE is struggling to get past 6700 so beware. With the DOW at all time highs, you would expect the FTSE to pushing through 6700. Usually, the FTSE continues to rally after hours on dividend days, but there are always exceptions. A tidy profit can be made on trading the FTSE dividend. So if you are £100 per point from a good position, then you will pocked £740 plus whatever gains you might make with the upward trend. Of course, it could go horribly wrong!

      1. If you can afford it. Personally, I am long from 6684 at £20 per point. So at 6694 I am £200 up on the day and expecting £148 from the dividend. That’s £348. Maybe not alot to the high flyer but a tidy profit all the same.

      1. Yep looks like US markets going for new highs again… I got Long at 6703. Hard market to trade this, the bias keeps changing.

  48. I have to say in this market contract size has to be the opposite of ala dave ($0.5m notional) ..as stop losses are pointless 20- point moves in like 10 mins

  49. anyone backtested the success of big dividend days. trade ? I have to admit I was sceptical but I have tried it about 8 times and only didn’t work once . PMS the mechanics of the dividend I think most understand.

  50. For daytraders this market is a nightmare. Now again below 6700. No direction what soever

  51. Living proof…after 3 months i deviated away from my risk plan (instead of shorting at 6709..shorted at Pivot 6686….i lose 14 points n then in state of hurry lose another 14)..well at least i had a good revision on how to not deviate from a plan!!!. More pissed that its going to be my first down month in 6 months!!! Lets see if i can catch 50 points with a decent size before month end to bring it back in profit!

  53. After all of that effort, lets see if 1600/6700 will act as support now. Crucial to the medium term direction of the market.

  55. Hashmash….I feel your pain. Having been in the money most of the day…I now see red, from changing my view at a given point. Crazy ups and downs. I honestly don’t think anybody has a clue at the moment.

    Might as well play red & black at the casino.

  56. FTSE in a nicely rising 1 hr channel since Nov. 13. The lower bound provided support today. Series now aiming for 6720. Progress to the upper bound will take it to about 6740.

  64. Well that Divi worked out well… Loaded up with 4 x Contracts at 6695, sold them after the divi at 6694 with a nice pay packet in the account :), works a treat 9 times out of ten. Still holding 1 contract long but direction doesn’t inspire me.

  66. If 6698 is the FTSE close, then 2nd day straight with a close above T-Line, this time, above by a fraction. SO things seem to be inspiring again in FTSE. Let’s see…too early for fireworks

  68. THe last 3 hourly candles, shows how indecisive was the market… cannot figure out why such amount of volatility. No special news…maybe to see what direction DOW take… who knows

  70. Just boring market noise today….no real catalyst to push in either direction. Probably tmrw….Fed minutes released…also BB speaking later in evening. Thurs…big POMO day….2nd biggest of month…anyone shorting on Thurs?? Maybe a dip tmrw and rise on Thurs POMO/PONZI day…lol…

  76. Fed Evan ” not in a hurry to taper ” thought the markets would be buying or maybe investor are starting to think stocks high but data is poor.

  86. Senu I don’t think we will get a dip till the meeting tonight, with data out news is good, spike up before down IMO. Gl though.

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