Little bit more bull?

Good morning. After the initial dip yesterday and the subsequent long at 6550, the FTSE stayed pretty flat. Even some Fed speakers later in the day and $5billion of POMO/QE money going in didn’t manage to get it above 6565. Yesterday’s pivot level held perfectly in the end at 6536, so was just a bit early with the long. I still have it open in fact and with prices holding up still think it might rise a bit this morning. It seemed to be a case of everything catching its breath after Fridays rises. The FTSE is still not that far away from the top of the various daily channels so I feel that significant upside may be a bit limited – still that 6610 area looks like resistance where the top of the Raff’s are, as well as 6617 for the 20 day Bianca channel top and a slightly lower 6575 10 day Bianca.

Asia Overnight from Bloomberg

Asian stocks swung between gains and losses after the biggest rally in three weeks. Telecommunication and retail shares led declines while energy companies rose.

The MSCI Asia Pacific Index slid 0.1 percent to 140.44 as of 2:01 p.m. in Hong Kong, having risen as much as 0.1 percent earlier. The gauge jumped 0.8 percent yesterday, the most since Nov. 18. More than $8 trillion has been added to the value of global equities this year, the most since 2009, as central banks took steps to shore up economies worldwide.

“Don’t let the bumps in the road force you out of your equities positions,” Michael Shaoul, chief executive officer of Marketfield Asset Management LLC, which oversees about $17 billion, told Bloomberg TV. “Between now and the end of the bull market, there’s a lot of upside. You need to avoid the temptation to be panicked if we have a difficult period. This is a time when you want to remain patient with equities.”

S&P Futures

Futures on the Standard & Poor’s 500 Index added 0.1 percent today. The gauge yesterday climbed 0.2 percent to a record as investors weighed the timing of any cuts to Federal Reserve monetary support amid budget negotiations in Washington.

Pimco Forecast

Pacific Investment Management Co. said global economic growth will accelerate next year. Mohamed El-Erian, chief executive officer at Pimco, whose firm has $1.97 trillion in assets under management, said the world economy is likely to expand by between 2.5 percent and 3 percent in 2014, up from 2.3 percent this year.

Federal Reserve Bank of St. Louis President James Bullard, a voter on policy this year, said the odds of tapering bond purchases have risen along with gains in the labor market, and any reduction should be modest to account for low inflation.

The Federal Open Market Committee will probably begin cutting stimulus at its Dec. 17-18 meeting, according to 34 percent of economists surveyed Dec. 6 by Bloomberg, an increase from 17 percent in a Nov. 8 survey.

FTSE Outlook

ftse 100 prediction
ftse 100 prediction

Yesterday double topped at around the 6568 area, and after the initial dip to the pivot area, didn’t really do much else. If bulls can break yesterday’s high at 6569 then I feel that the target for the 6550 long at 6610 is still valid, though would probably bank at 6600 just in case. I am being quite optimistic today across the various indices talked about above so I hope it isn’t misplaced. I don’t think the “Santa Rally” is here just yet, mainly as we are not far off the top of the various daily channels across the board, and there is still time for a dip then rise before the end of the year. That said, we could still get a little bit of a rise in the next few sessions, and it feels like the FTSE is being supported quite well at this level, and we have a ProTrend channel on the daily chart in play with rising support at 6532.

With the 10 day Bianca resistance at 6575 this level will need to be the first hurdle if the bulls have any chance of getting prices towards those resistance zones at 6600+. If it all goes pear-shaped for the bulls then movement below 6510 will see the pre Santa Rally dip really kick in with a dip to 6430. That level (6500) if broken would also break an uptrend since June 2009.

62 Comments

  1. Hashmash what’s your current view? Are you still adding shorts? I am currently holding long 6600, and 6545

    1. oh sorry i didnt see ur msg before.
      I was adding short had a entry for 6573..fking ftse reached 6572.3 and dropped lol
      now im just waiting..
      I still have a short open from 6696

  2. No real direction on ftse imo although closing few points up yesterday looks somewhat +ve. Im still long but not added to my position since opening on Friday. Currently +33 pts with a trailing stop now b-e minus 10 pts. Another +ve close and I’ll add.

  5. Adding to short at 6573..in my view ftse out of steam, if bulls were here then we wouldve been quiet a bit higher than the close of friday where the jump happened.
    I think we will swindle between 6500 and 6600 till at least 17-18th

  6. Hashmash – traders have to eat you know…just getting their strength back for the next push up Haha.
    Seriously tho, we are in no mans land and it can go either way from here imo. Did your system give you a signal to enter a new trade? Or is it that the signal hasn’t reversed so you’re just adding to your existing position. Interested to know….

    1. Same signal as before that hasnt reversed.
      man it was 0.3 points away from mt entry of adding more short n ftse moves away 🙁
      I have to say that my signal has become weaker since yesterday

  7. I personally can’t see it falling below 6500 again before the year ends. Data is strong and the long term trend is up. In saying this, you are right that the FTSE has lagged other indices and is still not shooting dramatically upwards. This could easily change though, as we saw with how fast it dropped last week.

  8. we are still in bear territory. Give one more day and we should starting to see the emas crossover in 1 hourly chart and then things will go like a dominó effect

  11. The next week or so Senu, should see you picking up points both ways this is your kind of market, personally I don`t think we will get sub 6500, rather just a slow rise punctuated with dips. Also confident we will get 6800 by year end, be a nice 12%(ish) increase from last years` end.

    Gl all.

    1. Truely, in the way people trade goes slowly rather in opposite way goes faster. Bloody ftse in fall!!!

    1. Not sure what’s going on. Is it long or just DCB. I just don’t like longs which broke previous support, but I may be wrong? So I cashed on that DCB 7 points, ok

  15. FTSE @ support 6530, its been very weak for the last month. The US market was flying up and this never got fed onto the FTSE….

  17. Anyone any idea what triggered the change of sentiment at midday ? Cant see anyone having said anything. Just when I though the FTSE was showing a bit more strength !

  18. Maybe a breath, who knows. Commodities higher so it does not make any sense going down

  19. closed my short at 6525, now gone long stop 6453. Market breadth is showing some good bullish divergence

  20. FTSE gaining a bit of strength again relative to previous weeks, so maybe it was a ruthless stop hunt…

  21. Hmm, stopped out for a 10 pts loss. Still in no man’s land tho as far as I can see. No reason to take a new position until we see some direction.
    PS. not good from the BOE this morning….second time Carney’s commented on housing market in the last month. Interest rates are going up.

  26. You might all disagree 🙁 but I have to report ‘sell’ signals for S&P 500, Dow and FTSE – all on the 1-hr. view. At this point I’m assuming minor corrections rather than the start of major falls.

  27. I bottled it…didn’t have the long term nerve. Saw 20 points rise and booked it. Along with a short at the same place (6540), which I booked for 10 points.

    I am no good at holding positions…need to try though 🙁

  28. Never take for granted that bottom you bought. The Devil will come and visit you again.

  30. Still long. Added a tiny but more for a 6544 average. If we move higher I will add a trailing stop from 6650. Will hold on the wrong side until 6450.

  31. Two (2!) ‘flags’ on the daily today to SHORT the DAX… hmm 🙂 Kind of squares with the downward pressure on the DAX. The 7 day SMA on the DAX is also about to cross below the 30 day SMA (the 5 day SMA already has). There also appears to be quite steep downward pressure on the CAC and S&P 500. There does, however, seems to be up upward pressure for the past couple of days, pulling back yesterday but back on track for today… hmm 🙂 Santa on his way? lol 🙂

    Disclaimer: ‘flags’ are for entertainment purposes only – DO NOT bet your life savings on them… 🙂

    1. * … There does, however, seems to be up upward pressure on the FTSE for the past couple of days…

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