Looks bearish 6247 6277 resistance 6195 6180 support

Support 6198 6194 6185 6169
Resistance 6247 6278 6336
Good morning. Well the bears certainly appeared yesterday with a fairly slow and steady decline form the 6284 level at 6am, with a 6220 low being recorded. All certainly helped the gold long and that looks like a good move banking at 1270 now as its dropped back overnight. Unfortunately the FTSE short order didn’t trigger as we never got the pop up to 6295, however judging by the emails a lot of you stayed short all day. The 2 hour chart is looking more bearish now with resistance at 6279 and a good short entry here.

US & Asia Overnight from Bloomberg

  • Investors wary of events from Brexit vote to Fed meeting
  • Hong Kong markets resume with mainland China still on holiday

Caution prevailed in Asia on Friday, with stocks slumping and the dollar climbing, as investors girded themselves for potentially seismic events this month including Britain’s referendum on European Union membership and the Federal Reserve meeting.

The MSCI Asia Pacific Index headed for its steepest loss since May 13 and paring a third weekly gain. Commodity producers led losses after industrial metals sold off on Thursday, while gold fell for the first time in three days and U.S. crude oil held below $51 a barrel. A gauge of the greenback’s strength advanced for a second day, while demand for havens boosted debt, with 10-year Japanese yields falling to a record low.

“In the next two weeks there is the Fed and Bank of Japan meetings, the U.K. Brexit referendum, Yellen testifying to Congress, U.S. May retail sales and CPI,” David Croy, a senior rates strategist in Wellington at ANZ Bank New Zealand Ltd., said in a note to clients. “The market is very dovish on the Fed, and the risk to current positioning is that the Fed Open Market Committee comes out more balanced with two rate hikes as a central case for the second half. That thinking may have been behind the less gung-ho risk appetite.”

Recent optimism that a combination of loose monetary policy and moderate global growth would bolster risk assets seems to have peaked, with the Fed meeting, followed by the ‘Brexit’ vote, as well as U.S. political conventions rife with the potential to roil markets. With equities trading around multi-month highs, investors are also speculating there is little reason to push prices higher. Billionaire investor George Sorosis said to have recently overseen a series of large, bearish investments, which has also tempered the market mood.

Stocks
The MSCI Asia Pacific Index lost 1.1 percent as of 2:07 p.m. Tokyo time, reducing its climb in the week to 0.2 percent. Japan’s Topix index fell 0.8 percent, while the Kospi index in Seoul declined 0.3 percent.

“Ahead of the Fed and BOJ next week, and the vote on Brexit the week after, no one wants to take risk today,” said Juichi Wako, a senior strategist at Nomura Holdings Inc. in Tokyo, referring to the Bank of Japan meeting June 16.

Mining companies and energy producers led Australia’s S&P/ASX 200 Index down 1 percent, after the Bloomberg Commodity Index snapped a six-day advance, slipping from its highest level since October last session. The Hang Seng China Enterprises Index fell for the first time in 10 days in Hong Kong to end its longest winning streak since 2007. Markets in Mainland China and Taiwan are closed for a holiday.Futures on the S&P 500 Index slipped 0.1 percent to 2,104.20 early Friday, following a 0.2 percent retreat in the U.S. benchmark. The index — which remains about 1 percent away from its record high — clawed back declines of as much as 0.5 percent Thursday as gains in utilities and telephone companies countered losses among banks and mining shares.

“With the market being priced where it’s at, there’s not a lot of room for air,” said Jim Davis, regional investment manager at the Private Client Reserve of US Bank, which oversees $128 billion. “I would not be surprised to see it back off a little more in the next week. The market has to navigate some choppy waters between now and mid-July.”

The Philippines reports on trade and Malaysian data on factory output is scheduled, along with a foreign reserves update from Thailand.

Currencies
The Bloomberg Dollar Spot Index, which tracks the greenback against 10 major peers, rose a second day, adding 0.2 percent after rallying 0.4 percent on Thursday. The gauge is headed for a second straight weekly decline, down 0.3 percent.

The yen was little changed at 107.08 per dollar. Australia’s dollar joined the Korean won and Malaysian ringgit in declines, falling 0.2 percent to trim its advance in the week to 0.6 percent. The won slid 0.8 percent, snapping a six-day climb after the Bank of Korea unexpectedly cut interest rates on Thursday. [Bloomberg]

FTSE 100 Outlook and Prediction

FTSE 100 Prediction
FTSE 100 Prediction

Despite yesterdays declines, there is a chance that we see some bullishness today, IF the 6195 area holds as support. If it does then we could well be on for a climb to 6247 where we have the daily pivot, and possibly 6277 – which is resistance on the 2hour chart, and actually looks like a very good short entry if we get there. On the 2 hour chart we have moving average resistance but also a red coral showing a downtrend. Often trading in the direction of the trend when the price touches this coral line after a colour change works well. Of course that all depends on the bulls holding the 6194/6185 area where we have the bottom of the Bianca channels. Feels a bit counter trend trade when it hits a channel but the 6323 short the other day off the 10 day worked well. So, thats the plan for today, long around the 6195 area, short at the 6277 area, possibly try a short at the daily pivot as well at 6247.

85 Comments

  1. Now the “Oh it can’t go down” bull camp have had a bit of a reality check, the rest of this morning depends on whether there is another wave of selling to come.
    The break of 190/9980 looked like stop loss, so that will be the first level to recover and form a base off.
    I guess bull bargain hunters might want to start light scale down buying around here but will probably not want to rush in before the weekend, which should restrict any rallies to 6230 previous support.
    Downside 6160 maybe before the DOW, not much less I shouldn’t think.

    1. hi tmfp, DAX was looking very promising near 10300, didn’t look like it will go to 10100 and below, now ?!

      1. I wouldn’t say it looked very promising near 10300. It could well have gone to 10500: it didn’t, but that’s hindsight.
        It’s difficult when someone comes on and says
        “Hey guys, I’m -200 on an open position, what should I do?”

        It depends on how deep your pockets are, whether the reasons for opening the position are still valid, lots of factors.
        The first answer is “don’t get into that situation in the first place”
        The second answer is, if the trade has gone wrong then it should be cut, hopefully for a technical reason that’s also affordable.
        The DAX now?
        You know as well as I do that a market is only as strong (or weak) as its recent history.
        To me it didn’t look a sell at 300 because the indicators weren’t there. Now at 10000 it does, because support levels appear to have broken.

          1. Sorry if I touched a nerve by asking about that short you obviously stopped out. I was hoping you might have ridden the storm.
            This current market is a b*stard to trade: random moves, light volume and basically directionless.
            It’s the type of market that makes us over trade on dodgy grounds.
            Tight stops and good entries are totally essential, more important now than ever. Stuff can easily run away, especially overnight.
            GL
            🙂

  2. tmfp – replied on last page…
    Anstel – too many bears haha – does that mean you’re long again?? 🙂

    1. Hi mate yeah I’ve made a bit of a cock up of this at the moment….I do still think if the sentiment changes it could have a rebound of sorts in it…..it’s a big if though…..got quite a bit of ammo to go at so yep I’ve made a mistake but let’s see how it pans out….good luck mate in your new venture….I don’t have to tell you how hard it is though….

      1. Thanks mate.
        Hope you manage to trade around the painful morning.. no doubling up/down (he says to himself).

        1. I will get out of it…..been it much much deeper **it than this…I’m pretty chilled…….all part of the learning curve….good luck mate….

    1. and trailing stopped out of my last short at 62, using some blue to finance a long, 12 either way.

      1. and stopped.
        Glad I got that out of my system, although probability is that we are near the morning’s lows. Nothing that could be called real support till 6100 area.

    2. But the trailing stop has got to be in the right place….for the sake of 0.5 pt missed out on +30 AND also took a long that I shouldn’t have.
      It’s not what a bad trade loses in itself, it’s the knock on effect too.

    1. Lol, yeah, markets that go down 100 points in a couple of trading hours do look a bit oversold.
      If you’re picking bottoms for an oversold bounce you can protect your profit with a trailing stop.
      You can of course, also develop a theory that this is a bear trap and today will turn out V shaped, then a trailing stop is also the way to go.

    1. It could attempt it sure, but that area’s now resistance because of the failure to hold, so would probably be worth a short. Fib levels aren’t targets as much as potential areas of support/resistance.

      1. long at 40, target 50 (49)… might take half off if it works and re target 60.
        Really needs a 12pt stop though and I’m not really prepared for that…
        …
        Ok, so I shouldn’t have done that… now I’m stuck at 12pts down with a stop 5 lower… recovery hopium.

        1. At least you have a logical stop just below previous lows.
          It’s up to the Candle Gods now and, of course, what you will do should it recover to entry price, because the previous bounce high is only 5 pts higher.
          GL.

          1. Yes good spot on that previous high – bit of a FOMO entry for me! I got stopped out but re-entered from 27 and sold at 43, bringing the sum total to break even for that little round trip. pain in the proverbial. that’ll teach me. hopefully 🙂

  10. Morning all, bit late as been to the opticians, transpires they can’t offer glasses that can see the future. Only thing I’ve done today is give money away, had a small long at 200 which I cut at 85 and I spent 300 notes on new glasses. Think I’ll leave it alone!
    That said, I’m still running my FTSE/Dow difference short, average up to around 11730 so fairly heathily out of the money. Good luck all, it looks fairly hairy out there!

  11. Interesting (in a chart geek sort of way) the two 10 point 1 min legs on DAX that have immediately retraced off 870.
    Could be a double bottom, could be a v negative signal if they break third time.

    Yes, we have gone down a long way this morning. Yes, we can go down further.

    1. Hi Senu….just thought I’d give you some moral support mate….stay strong and hold if you have margin….remember it’s a fight or flight feeling that you are experiencing…..it’s not going to kill us…..stay strong mate…..good luck..

  14. Well as you all know it’s going to be pretty Dow dependant what happens next…..tough call the Dow could do anything……can’t help thinking that 18000 was the pump to suck in and now it’s dump time but you just never know…..could be a bear trap….and the real drop comes later?

  15. Back again, I see the reality check continues.
    6100 held for the time being though, but we don’t get many sessions when we trade in three different hundreds.
    Also Dax is getting towards extreme RSI daily readings for it (last time it went below 30 on 10 was the Feb low 8800).
    Looking at that 6096/122 rally suggests there were quite a few stops chased deliberately and then bought into before DOW (which has only made a token drop comparatively, unlucky chippy).
    What to do at 6112 for the next hour?
    Probably long it for short covering, most of the longs have been shaken out I’d think, although there’ll probably be a few diehards hoping against hope and dumping at the very close.

    1. Just organising the mobile catering now…..venue is beautiful….overlooking a lake….just hope it’s sunny for the photographer :0)

      1. hahah oh dear – i think I may have to be best man, or double wedding it…
        interestingly, you’re long and I’m short i think… doh (swap positions??)

        1. Hi inoodle just had to go and do stuff…..well all part of the game…I think the biggest thing is to stay manageable size so you can trade without fear……once you start the £150 pp lark and it starts going against you it starts to get twitchy when it’s going up and down grands at a time…..that’s when you act out of fear instead of thinking rationally….it’s a difficult thing to master this trading but the more you do the more you recognise where you went wrong….just keep your sizing in your comfort zone……I’m well underwater at the moment but I’m mainly concerned with any possible black swans at Euro 2016…. Combining with brexit to drop this lot down a lot further..ironically I thought it was going to drop soon but ended up going long again like a numbskull….never mind keep smiling…..good luck mate…..

    2. Yep, all looking pretty sick for me at the moment if I’m honest! Does seem a bit of an anomaly that FTSE shanking harder, point for point, than DOW but assume it is BREXIT fears etc. I hit break even a bit earlier and should have tasken their arm off but didn’t so I’m going to do an anstel and marry it!

      1. Hey chippy chin up mate……just get your best suit out and make sure it fits OK…….you up for some pro karting ?we can have a joint stag night at the karting track and then go and get wasted later on :0)

    2. Yeah with you there short till about 16.00 Rick, then I think it might head back on up on short covering and maybe get dumped last 5 minutes.

      1. Yeah, I didn’t short FTSE between 14.30-15.30 as I just wanted to see the new afternoon range and kept my long from 6100 with S20 which indeed went well.
        Looking for a long soon as you just said, so 6100 again maybe for a bit of short covering and then last 5-10 mins for bears again!

          3. small range now again as well I though we will see 25 again but you never know we still 22 mins to go

          4. Yeah I think I missed the boat, it made 18.8 but didn’t follow thru with the DOW, will hang on and stop it at 09

  17. oh dear – I’m in large size recovery mode again… good job I’m not officially professional yet! eek.
    That blo0dy dow spike… I never quite seem to get on the right side of those…
    and always when I’m being stupid in size.
    and breathe…
    Its going down, but how far will it retrace… 50% at 17880 would see me fine if I manage to hold all the way to there!

        1. Just naked shorts with no stops then?
          No stop, for example, just above the previous bounce high at 69 or the previous one at 85?

          1. Yeah. twice in one day not looking at whats there! Thanks for pointing it out again!
            Oh god I’m doomed, this things going to the moon… unless i close, then its gonna tank… grr 🙂

      1. Always good to start the week of bullish make a few pennies too give them back on Friday…lol

  19. DOW is in weekend mood, doesn’t really give a crap to the fellow Europeans today and I can believe it’s bloody holding above 17900 when the world is going down!

    1. You want to feel my pain Rick!! Likewise I’m struggling to see why I am wrong except for the big red lights flashing at me!

  20. Dow going to finish in the Blue just got a feeling that wall street will push now until such time as Yellen gives them the nod before the next interest rate rise.

      1. Have too take the rough with the smooth Rick can remember the Dax going up and the Dow going down a couple of weeks back needless to say i was going the wrong way on both of them, and today not been to good either long on Dax.

  21. Well I am off, had a good day today but can’t be bothered now.
    Have a good weekend all 🙂

  22. Sell off being put down to Brexit as the leave party have gained ground, thought we would see a sell off but not till next week..

      1. sounds wonderful! that 17900 is the bane of my life at the moment.. stop being so damn supportive! 🙂

          1. update: I held on and made a small profit today – i had a good morning with sensible trading, then a couple of silly entries caused me multiple annoying but small losses. The thing which through me into tilt mode was the annoyance of missing out on the bounce from 6100. I missed out because I was slow to pull the trigger because I’d lost on the previous 3 trades with bad entries. The big size then began and went hugely for me (2k) against me. Finally turned round, but not the safest game in town… Wish I’d let it run the extra 70 points its since gone down further, but I didn’t have a clue it was about to do that – although it did bounce directly of the 61.8 fib. Smaller position size would have let me do it i suppose!

            ciao. until bull monday!

  25. Well that got a bit sweaty, closed nearly all difference trade at break even. Kept a little bit.
    All looks a bit bloody, have a good weekend all, blow the froth off a few and see you next week.

  26. Just got back after being forced to go somewhere I hate and find that my 90 limit triggered on the 22 short, so a nice bit of jam on the bread and butter.
    A decent down day will lay some orders on the bulls to put up or shut up.
    Bull Monday? It better be, or this Brexit thing could go viral and do some serious damage.

    Remember, I’m sure it’s tomorrow that IG double their ftse margin. They will be doing this for a reason so be careful out there, we’ve all got a bit institutionalised by these recent quiet ranging months.

    1. Tmfp also read that Japan’s bond hit new low which also triggered selling, then with the brexit leave camp making ground on the stay camp and with some polls saying that leave party are in front.
      Hopefully there will be some buying Monday, but not sure if we will be calling it Bull Monday… Just can’t see the Dow going down too much.

      1. Many thanks from me also Hugh…..Friday certainly was carnage….blimey….good luck next week…..Hi to you too WSF…hope your doing well matey and good luck……

        1. Hi Anstel,hope you are having a good weekend,I’m thinking of starting a Fund for Speciality Scotch Eggs as a hedge against dollar weakness,just looking into the registration requirements for Jersey,missed Friday,think sitting back a bit on the Indices is right for me at the moment,but I’ll see how it looks next week, with all of the news events on the calender might even get a trend .

  28. Every forum I have looked on today is screaming further massive sell off monday, would think a small rise before the carnage continues, but Tmpf 5800 is now looking like reality and maybe before the end of next week.

  31. Grab a few points last night all closed now looks ugly but could see a bounce from some of these over sold markets so out now.

  32. looks like sell the rallies is going to be this morning play,ftse as held up well considering our euro friends have had the stuffing knocked out of them.

  33. 70 is a good solid support and 90 is resistance for now, shorted twice at 88 but now just watching the RSI levels.
    Bulls are trying to break 90 now but anyways another short at 91 for high RSI S6

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