Looking like the dip started yesterday

Good morning. Well the long worked out ok in the end but it was fairly hard going, I held it open over the close to collect the dividend (a useful 11 points yesterday), but with prices then dipping back closed it at 6700.  There wasn’t even that much buying from the divi hunters at the close yesterday. Overnight we have dipped below the 20 day Bianca channel for today at 6689 and have bounced up off the 10 day so far at 6676. Inflation data out yesterday came in at 2.2% for October, below the forecasted 2.5% and the lowest level for more than a year. Generally the UK is enjoying some decent data at the moment with UK growth “firming” according to the OECD. I take it all with a pinch of salt though, as these forecasters are the same ones who said that austerity in Britain was strangling it earlier this year and that the government needed to change their policies. They didn’t and now the data is improving with the UK likely to be the fastest growing G7 economy. So all good then? When the media are all uber bullish time to be a little cautious, though with the price hitting the bottom of the 10 day channel and bouncing a little there is still the possibility of a 6746 test (top of the 10 day channel).

Asia Overnight from Bloomberg

Asian stocks fell after China’s leaders failed to outline steps to curb state dominance of the economy and amid bets the Federal Reserve may start reducing U.S. stimulus next month.

Banks slumped in Hong Kong after a communique at the end of China’s four-day plenum made scant mention of financial reforms. Tencent Holdings Ltd., China’s biggest Internet company, fell 2.5 percent after a news report quoted its chairman saying the company’s valuation is “scarily” high. Noble Group Ltd. lost 5.1 percent in Singapore after Asia’s largest commodity trader by sales said profit slumped. Pioneer Corp. surged 21 percent after the Japanese maker of car stereos reported an unexpected first-half operating profit.

The MSCI Asia Pacific Index dropped 0.9 percent to 138.59 as of 1:53 p.m. in Tokyo, heading for its first decline in three days. All 10 industry groups on the measure fell.

“Quite a few people put on their positions ahead of the communique, expecting actionable moves to be made, but that’s not the case,” said Andrew Sullivan, director of sales trading at Kim Eng Securities in Hong Kong. “The market is just disappointed.”

S&P

Futures on the S&P 500 lost 0.4 percent today. The measure fell 0.2 percent yesterday as corporate earnings and an improving economy fueled speculation about the Fed’s timetable for reducing stimulus.

Fed Bank of Atlanta President Dennis Lockhart said yesterday a reduction in U.S. bond purchases “could very well take place” next month.

“Tapering is obviously back on the agenda as data in the U.S. continues to be strong,” said Donald Williams, Sydney-based chief investment officer at Platypus Asset Management Ltd., which oversees about A$1.6 billion ($1.5 billion). “Maybe that’s enough for a small correction, but I think with rates at very low levels and likely to remain low, it’s still a good environment for equity markets.”

Fed’s Outlook

Investors will scrutinize U.S. economic reports this week on jobless-benefit claims and manufacturing in the New York area. Economists forecast the central bank will delay tapering asset purchases until its March meeting. Policy makers will probably pare the monthly pace of bond buying to $70 billion from $85 billion at that time, according to the median of 32 estimates in a Bloomberg survey on Nov. 8. The Fed next meets Dec. 17-18.

FTSE Outlook

ftse 100 prediction
ftse 100 prediction

The 10 day Bianca channel bottom at 6676 has held overnight, and there is still a possibility that the bulls have a bit of a charge left in them to test that 6759 area mentioned a few times. If the bottom of the 10 day channel holds then we could quite easily get a full channel crossing today/tomorrow to hit the 6746/59 area. Support is 6650 today so watching that level closely if the 10 day channel does break as weakness targets 6610 and 6572 after that. As I mentioned above the media are being exceptionally bullish, always a bit of a worry when they are talking everything up. With the Dax looking like a dip to the 9015 area, the FTSE might test the 6676 again pre market. in fact its just dipped 5 points while I write this to 6681. Either way sentiment is starting to swing to the bears I feel based on the weakness creeping in this week, so we are swinging back to looking to short the rallies and 6744 should be a good area if seen, being the top of the 10 day channel. I have plotted the blue arrows as my preferred plan for today which is the long off the bottom of the 10 day channel, however, the pink arrows show the bounce off the 6650 level area if that Bianca channel breaks.

198 Comments

  5. How low do SE everyone expect FTSE to go today?

    I’m looking to get out, but if I can get 6600 I’ll hold on

  6. Can I ask – in your post, where does the support level of 6650 for the day come from? One of your indicators? I can’t see any line at that level on your FTSE image.

    Cheers

  8. Nikkei due to fall back to 14000 in the next few days I placed a small short on it this morning. Still above 14600 so may worth a try guys……

        1. Not really, unless DOW drops a lot, i think we will get sideways/slightly upwards movement for the day. Best to wait it out and see if there is a reasonable high.

  12. Held all three my shorts from 6720 and cashed out at 6650. Long at 6650 and will buy the dip at 6600. I think we might see it before Friday, but may start the Santa rally then…
    Just hope the FTSE holds, but the market is quiet positive atm.
    Fingers x’ed. GLA

    1. Ideally, 15600, will be where I take off 50%, then leave the rest to hit 15500, as DOW is in a very strong uptrend as opposed to the ftse which is bearish.

    1. Jack, you`re too reliant. The best tactic is if Nick`s prediction aligns with your own, guarantee 8/10 times Nick will get you money, from reading his updates. But why not just subscribe to him lol, he gives updates on his trades..pretty sure he does very well for himself.

  20. Dang it, closed too early lol…It`s that mentality that I just want to bank the money as all too often I had the money and then goes it b/e then negative lol.
    Oh well better safe than sorry!

    1. Could have always made more money in hindsight. I’m just happy we cashed in on our target. It could have been rising right now near 6700 easily. Always better safe than sorry

  23. The problem is everyone is thinking the same and I am sure everyone buying at the moment is fueling the bears :/
    Once everyone got their longs in we will see end of day relief rally with possible drop tomorrow and until Friday.
    The only problem for me is the drops are coming at an alarming rate, not steady at all….

  25. the trouble is we all knew it was going down piled on too much saw it make money b/e then lose and thought bugger this ill make some money and get out. Now we are trying to catch the fulling knife! never learn …

    1. Don’t know where you got 6610. All I am interested will it actually go up and to which level would be nice to know.

    2. You were right 😀 that 6650 worked as you told.
      But the lows of last week were 6643. And I cannot see any support at 6650 and only as a round number. Can you explain in detail ?

  28. I don’t think it will be back to 6740 this week, it started dipping already. Nick charts are not working :P.

  30. Good to see some of the longer term traders getting paid off. Those using 8 and 21 ema on the daily will have seen a cross over to the downside overnight. That made a solid argument to hold the shorts or enter in the 6700 6690 zone.

    Sorry to see knife catching, doubling up and not setting stops still being posted.

    Stops are my friend. They should be yours.

    Trade safe

  32. Nick, can you tell me if that 6650 you are talking about is a round number for the 6643 lows of last week ?

  35. this is interesting snp bump looks more than the usual pomo. also ecb hints at more QE ..all the grizzlies still holding ?

    1. 6750 is a bit optimistic isn’t it??
      Would like it, but don’t think that much. If we get 6700 we will be lucky imo

  48. guys I know not a ccy forum but dollar yen looking great on the chart about to break triangle consolidation on daily and weekly. plus look at price action today. Looks like someone may know something about GDP print tmw !

    Just a thought

  49. I had to save my skin, closed -7.5 points with total 22.3 points loss of usual stake. Upset cos it took me a whole week to get those 22.3 points in the first place.

    1. I closed 6653 cos who knows if it goes to 6660 but it may drop to 6612 again. Didn’t want to give it a chance.

      1. I made a huge mistake looking at Nick’s chart today and ignoring EMA. Annoyed a lot. I took long where I previously tried short and closed and took look as soon as I I saw the arrow. Dah.
        Not sure how to play with game with Nick’s charts. Frustrated.

    1. I missed the boat when DOW was at 740 to short. DOW is bit strong, made a nice recovery. Ahwab, what do you reckon? Good to short.

  57. Nick, can you tell me if that 6650 you are talking about is a round number for the 6643 lows of last week?

  58. lool…seems like most people had a good day- i thought id miss the bus going down and i had uni all day today-my short got triggered at 6694.5 but i only set the limit profit a 6675 :(( remind me to use trailing stops next time

  59. ANYONE can you explain if that 6650 Nick is talking about is a round number for the 6643 lows of last week

      1. THanks. Its the IT Finance alghorithm. I never used it. I use my own formulas. But sometimes it works like my own 😀

  65. The T-Line close below from Nov.6th doing it’s damage. Until a close above this FTSE is doomed. Small targets and out

  67. Lol……Nick says his prediction just missed his call of 6610. Am I the only one confused?

    Nick’s preferred plan in blue was from 6675 to around the 6744 area, then short the rally. Failing that, the pink diagram plan was from the absolute support level of 6650 to 6710. Neither worked out by a long shot!

    FTSE touched a low of about 6611……so neither the 10 bianca or 20 day bianca channels held at 6676 or 6689….Nick did say that if 6650 went then there is a possible target of 6610 and 6572. But the problem with this analysis is that it covers every angle, so if the market drops, the analysis is accurate and if it rises it is also accurate, i.e. it is not really accurate or helpful, but simply attempts to cover both possibilities in a vain attempt. Remember, Nick’s main theme today and for the last few days has been to reiterate the bullish theme-i.e. target 6746+ area, top of 10 day bianca channel.

    Sorry if I sound harsh Nick, I know you try your best, but hedging it ‘both ways’ and saying the analysis was correct is not helpful. That then sort of puts you with the CNCBC lot….lol…just make your call, one way and stick with it, it will be more useful than the current approach adopted by you. Just constructive criticism to help you improve your forum, and help those following it.

    I don’t trade indices much, more forex and equities and occasionally FTSE now, and I find that following religiously other people’s ideas on forums, twitter etc, is more of a hindrance, as there are too many cross channels at work, and these pollute your analysis and trading strategy as you are handicapped, at least subliminally, by other people’s trading ideas, usually just random number calling like in bingo. Since ignoring other people’s trading tips for some 2 months now, I have found that my head is more clear and I can make my own judgement call more accurately because there are no signposts in my head with people’s names corresponding to their call…i.e. short 6750 £10ppp etc….GLA!!

      1. And he also said we will rally from 6650 or 6675 to 6710 and 6746 respectively (see diagrams), that is my point…hedging it both ways…you are covered both ways, the analysis is 100% accurate because you have covered both eventualities!

        1. I do tend to agree Nick’s charts are generally a couple of zig-zags, which in general if your “blur” your eyes fits most days price action !

          1. Well thanks for that! I see what your saying though. I do my analysis at 06:30. I had support at 6676 so went logn there, stopped at breakeven, had support at 6650, went long there, got stopped at 6640. After that i had support at 6610, didnt quite reach it, though went long at 6620 instead. The problem with trending days, just trade off each support and then possibly one will hold. None of the upper targets on the original trades were reached obviously. I have been saying for a few weeks though i expected a dip to 6600 before the Santa Rally kicked in. You just saw it.

          2. I hope to come back in say 6 months and post up my profit/loss statement for the period…so hopefully end of April….that’s done it…tons of pressure now!!!

            Have found that trading back to what I used to do when I first started is profitable for me. A bit like fishing…patience…and hunting out 1 or 2 good trades a day in equities primarily, a little forex/indices.

            No dow!! Had enough of the huge range potential. Only got into FTSE this morning because I saw it down some 100 otherwise was watching to go long Barclays for 10p in next few days. Range for year just £2.45-£3.30 approx…so better odds if you lose your trade, because in this narrow range you can average down and still make money. Try that with FTSE, 6000 to 6900…900 points to average down if it goes against you…it did in May, in just 3 weeks!!

      1. What’s the point taking trades from supports, why not encourage people to enter the current short trend instead?

  68. Look at the Dow climbing, maybe we had our dip and would start end of year rally?
    Have my long still going, so let’s see what happens…

      1. Take todays news for example – all great positive stuff, FTSE drops out of its arse. Pity the poor fools reading the news headlines and stories and thinking oh thats good news, i think i might dip back into some shares as companies should start to do well.

    1. And he also said we would rally from 6650 or 6675 to 6710 and 6746 respectively (see diagram). That is precisely my point, hedging the prediction/analysis both ways, thus the analysis is 100% accurate because you have covered both eventualities! Which anyone can do….

      1. But you do trades, based in others people analysis ? Huge mistake.
        It only serves as reference, nothing more

        1. I never trade on other people’s analysis, just use as reference only, but find that subliminally your mind processes other people’s calls, irrespective of your attempt to be objective and to discard them !

          That’s what I mean by cross currents, half pulling you one way, the other half the other way, and a few just attempting to piggy back on the coattails of a few!

          For example your constant call of the 6840 area was amusing together with the then complete volte- face and calling for the 6600 area then back to the 6800 area….lol…

          1. All i do is say my support and resistance levels, if they hold then i give the targets. if they dont hold then forget the targets.

      2. Nick’s not stupid though he’s making a nice £30 from every member, so if he has 100 members, that’s a cool £3k a month with no risk! beats my trading performance any month 🙂

          1. Except that I do have to deliver? That 100 would soon disappear with a few shit calls and no help! Its still stressful putting your neck on the line saying what you think its going to do…. almost worse than the actual trades themselves

          2. No hard feelings Nick, I still respect you for putting out your daily call, it’s not easy as you know, you do your best, that’s all that matters my friend 😉

            But, even if you are wrong, that is fine, it’s markets, they are volatile some days more than other days-jumping around like Kangaroos on steriods-but, it is better to stick with 1 call and 1 direction as hedging it both ways confuses the whole analysis that you post.

            Also, your task is even more difficult regards non-subscribers, because you make your call before US data comes out in the afternoon and more often than not it is used as a ‘pretext’ to move the market in a particular direction, with no correlation to the actual data. Example, last week, GDP/US on Thurs, better than expected…interpreted as ‘good news is bad’ news..sell off…next day…good NFP….interpreted as ‘good news is good news’ …rally….instead of the rational ‘good news is bad news’ and a sell off….CNCB said good news is good news…but omitted to mention Fed POMO of $5bn!!

  71. Look at those idiots over the pond!!they think its buying opportunity at those levels!!..lol…they are creating bust bigger then we can imagine!

    1. Adam’s obviously taking the same medicine as me…as bloody cynical as ever!!! 🙂 Good on you ….;-)

  72. Good day today, I think we will see sustained bullish albeit a slow one/sideways movement until tomorrows open. Should be interesting…not really a time to commit to a trade of any direction as DOW looks so strong. Looking for 6575 for another sell point. P.S. It touched 6750, for those who were so insistent we wouldn`t get there we did, eh Adam?

  73. We are definitely getting a rise in the morning, 6675-6700 as a target, with the bs that the DOW is pulling

  74. Heads up everyone…DON’T SHORT on 21 NOV….FED POMO …big one…..2nd biggest of month…$4.25-$5.25 bn….you will be fighting Ben Bernanke who will conduct Fed POMO-permanent open market operations…via Federal Reserve Bank of New York….on Friday just gone, NFP day, dow rally was NOT because of good news is good news, but because we had a BIG POMO…$5bn…Fed (Ben Bernanke) conducted POMO between 10.15-11am (3.15pm/4pm GMT). Same time every month.

    Don’t let anyone fool you otherwise, especially CNBC, the day before it was good news is bad news regards fed tapering re US GDP coming in better than expected!!

    This calendar is published every month….google…newyorkfed.org…..or type in google FED POMO SCHEDULE…usually 2/3 big $5bn pcm…anticipate this move a day or two before or on the actual day….fed basically providing tons of liquidity for all the proprietary desks at investment banks/hedge funds then to buy asset classes…just one primarily..EQUITIES!! If I hear another person say valuations are cheap regards stocks I am going to shoot myself!! lol..Ron Baron on CNCB last week…

  76. oh too prove a point Ray in 2013 87% of POMO days (which is today by the way but only a small 1 yard) market was up ….

  77. Thanks Dom….never realised you had also found out about the POMO scam days!! Sorry, don’t read the posts much now, only when I (rarely) trade the FTSE. Today being one of those days because it was down some 100!! Anyway, closed my FTSE, so back to a fresh hand with equities/forex tmrw. You are bang on about the positive correlation, I think I read it in Zerohedge.

  78. Just a wild guess, headline 16000 on dow may be hit by Xmas just to get the small retail guys in (not me), then it’s pump and dump in the new year. 😉

  80. as for 16000 and jan my sentiments exactly don’t forget we have the debt ceiling limit shenanigans again in jan and of course tapering will she … will she not plus the come down from whats going on now.

  81. If someone don’t like Nick’s post then don’t read them. Personally I am grateful to him and everybody else for sharing their opinions here. To the critics:come up with something better or “jog on”!!!

  82. That Ray is amusing. I sense he has been loosing a lot of money with other+s people analysis 😀 😀

  83. I have jogged on..literally…:-) As I mentioned, it keeps the trading head clear, well for me anyway. Regards constructive criticism, there is nothing wrong with that, in fact, if you read my criticism correctly you will find that it is perfectly valid. I challenge you to find it as being inaccurate ! In fact, I hope Nick takes it on board as it will help his site. I am not in the habit of pretending that all is kosher when sometimes it isn’t.

    1. I agree. Maybe it wasnt clear but I was bullish for today from likely support as mentioned. My caveat was that if 6650 broke then we would likely see 6610. So, go long off the supports, if they dont hold, then thats why we have stops. If they do hold then ride them to the targets 🙂

      1. Magnanimous as well! :-)….Nick you are truly a remarkable person! 😉 Why can’t the CNBC lot be like you when they get it wrong??

  84. This strength move to the upside, after a weak close with a dark candle and T-line in a very negative slope…cannot figure out, what’s the market stance for tomorrow.
    Maybe we could see a relief from today’s close. It was pretty negative. Maybe we cannot see any follow trough for tomorrow. What do you think ?

  85. that 6657 is being a strong resistance, even after the markets closed. This morning I marked as an intraday resistance before I bought FTSE, but my stubbornness, thinking that it could be broken easily, as we were at the lows, made me be stopped at b/e in 6649,6 (where I bought it), without booking any profit (my target was 6659,6).
    Today another day with flat money. No… let´s see 2 Eur I won today 😀 :D. It’s an impossible market.

  88. ANd with all that cheap money into the market, how can I not be already rich ?
    I sense I’m loosing one time opportunity

  89. And everyone in CNBC… Another all time high and so on. And what about me ? I’m always in the market, but I do not see that 😀 😀

    1. I do not short 🙁
      But I surely need to change this. It’s taking the opposite sentiment.
      But I have difficulty on doing so.
      We maybe be going to test that trend line at 6572 area. We close below the 6663 level

  92. Ray the tazmanian devil leaving now…over and out….until I trade FTSE index again anyway…GLA! 🙂 Watch out on 21 Nov….big POMO day!

    1. Im hoping as Japan also has a huge gap up, that we’ll see some downside overnight, at least initially. Will be watching as may close out positions and reassess.

  102. You seem very calm, shorting this market, that knows only one way.
    With a f*** close like todayin DOW, I really expect the f***FTSE to go again up, unless it respects that bear flag in 60 minute chart and opens inside it, and breaks below

  107. So good morning… I see that the bear flag was not respected and a gap up leaving a hole, which I hate – 2 holes at the moment. One when it was going down and now today which is in opposite direction. THe candle yestaerday continues to respecte the downtrend channel where it is

  108. If the tradding range today is tight as this, we will have for tomorrom a huge bounce, if the BULLISH HARAMI is confirmed

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