Looks bearish 6295 resistance 6244 support then 6194

Support 6270 6267 6262 6194 6185
Resistance 6285 6296 6336 6358
Good morning. Bulls were in control for most of yesterday but couldn’t break through the 6305 area – bit annoying as it meant the FTSE 100 short didn’t really work out despite dropping initially from the 6280 area. The dividend saw a little bit of buying at 4ish but only a handful of points. Overall it was a bit of a flat day with a fairly small range. Even a fall in Oil stockpiles and a rise in the price per barrel didn’t have that much effect on the FTSE 100. I think everyone is biding their time till the Brexit vote is out the way!

US & Asia Overnight from Bloomberg

  • China markets closed; consumer prices rise as May PPI slips
  • Kiwi strengthens; Japanese shares decline as yen advances

Oil and metals advanced as mounting speculation the Federal Reserve will hold off on raising interest rates until later in the year kept a lid on the dollar. New Zealand’s currency jumped after the central bank refrained from cutting borrowing costs while Japanese shares slid.

Crude rose from the highest close in 10 months, extending its run of advances to the longest since April. Metals climbed amid monetary stimulus by the European Central Bank and an improving Chinese trade outlook. The kiwi jumped to the highest level in a year while the won retreated from a five-week high after the Bank of Korea unexpectedly cut key borrowing costs. Japan’s Topix index dropped while markets in China, Hong Kong and Taiwan were closed.

The dollar is retreating after weak American jobs data pushed out bets on a hike in rates by the Fed. The prospect of a continuation of accommodative central bank policy has buoyed equities along with other risk assets, despite the World Bank cutting its outlook for global growth in 2016, with the European Central Bank embarking on a corporate bond-buying program. A revival in raw materials is also burnishing sentiment, with oil driving the Bloomberg Commodity Index to an eight-month high, back into bull-market territory.

“The weakening dollar and the delay in the Fed’s rate hike are the main factors that are driving prices of commodities,” said Hong Sung Ki, an analyst at Samsung Futures Inc. in Seoul. “Constant production cuts in metals have been made this year, supporting prices but the recent increase in prices has more to do with the dollar’s weakening. The market has been seeing some serious output disruptions in oil.”

In the U.S., traders are pricing in zero chance of an interest-rate increase this month. Futures indicate 58 percent odds that the central bank will raise rates by year-end, down from 74 percent probability at the start of last week, according to data compiled by Bloomberg based on fed fund futures.

Commodities
West Texas Intermediate oil futures in New York rose a fourth straight day, adding 0.6 percent to $51.52 a barrel by 12:46 p.m. in Singapore. Brent crude in London gained 0.3 percent to $52.68.

U.S. oil stockpiles dropped by 3.23 million barrels last week to the lowest level in two months, the U.S. Energy Information Administration said on Wednesday, damping concern over a global glut in the commodity. A fresh wildfire also prompted Canadian oil producers Cenovus Energy Inc. and Canadian Natural Resources Ltd. to shut production just as output was being restored in other parts of Alberta.“The main driver is likely to be the USD retreat amid lower or zero expectations of a June hike,” Bernard Aw, a strategist at IG Asia Pte., said by e-mail. “For certain commodities, such as oil, a tightening supply has helped boosted prices. Signs of stabilisation in China, judging from latest trade figures, are also supportive of commodities.”

Copper for three-month delivery climbed for a second day, adding 0.6 percent in London to $4,607 a dry metric ton. Zinc climbed as much as 1.6 percent to $2,095 a metric ton on the London Metal Exchange, the highest since July 2015. Nickel rose 0.9 percent to $9,040 after a 4.4 percent gain on Wednesday, the most since Feb. 15.

Silver extended its surge, rising 0.9 percent to build on last session’s 4 percent jump, while gold held near a three-week high on prospects that central bank policies will continue to be accommodative.

Currencies
The Bloomberg Dollar Spot Index, a gauge of the greenback against 10 major peers, slipped 0.1 percent, following a two-day drop.

The Japanese yen added 0.4 percent to 106.58 per dollar after gaining 0.5 percent over the previous two sessions. The kiwi soared as much as 2 percent to 71.48 U.S. cents, its strongest level since June 11 last year, after the RBNZ refrained from cutting rates and said it expects inflation to accelerate. The Malaysian ringgit and Thai baht were up at least 0.2 percent.

The won pared an earlier advance of 0.5 percent to trade little changed after the BOK reduced the seven-day repurchase rate to 1.25 percent. All but one of the 18 economists surveyed by Bloomberg predicted the bank would keep the rate at 1.5 percent.

Stocks
The MSCI Asia Pacific Index lost 0.6 percent, with the Topix down 1.3 percent, led lower by banks and exporter stocks. Asian energy producers climbed, however, with a sub-index of the shares up 0.3 percent.

“Monetary policy remains accommodative globally and expectations for a rate hike in the U.S. has been pushed back,” James Woods, an analyst at Rivkin Securities in Sydney, said by phone. “That should be supportive of equities. However, a delay in the Fed rate hike is strengthening the yen, providing a headwind for Japan.”

Australia’s S&P/ASX 200 Index slid 0.5 percent, while the Kospi index in Seoul lost 0.1 percent. New Zealand’s S&P/NZX 50 Index declined 0.3 percent.

Futures on the S&P 500 slipped 0.2 percent following the U.S. benchmark’s 0.3 percent climb to its highest close since July. Industrial companies and mining stocks drove the increase, which put the index just 0.6 percent below a record set on May 21, 2015.

MSCI’s All-Country World Index rose a fifth straight day on Wednesday, capping its longest rally this month. It was down 0.1 percent on Thursday.
Deflationary pressures in China’s industries eased further in May, while consumer price gains continued to be subdued enough to offer the central bank scope for more easing if needed. Amid a drive by the Communist Party leadership to cut excess capacity, producer prices fell 2.8 percent, the least since late 2014 and less than the 3.2 percent decline economists had estimated in a Bloomberg survey. The consumer price index rose 2 percent from a year earlier, lower than the median forecast of 2.2 percent. [Bloomberg]

FTSE 100 Outlook and Prediction

FTSE 100 Prediction
FTSE 100 Prediction

We will probably continue in a similar vein today to yesterday, and I have resistance on the 2 hour chart at 6296 which has gone bearish once again. With the bulls unable to break the 6305 level yesterday, the top of the 10 day Bianca at 6336 might be a bit too far for them to reach today, but if they do then a good shorting spot here as there is still a lot of resistance at this level. Apart from these 2 levels there isn’t really much else of note really, sign of the slightly weird way the FTSE 100 has been behaving recently. We have pivot support initially at 6285 though with the overnight action hovering around this area we may well drop away from from here. The bears will also need to break 6270 as there is coral support on the 2 hour here. I think the FTSE should be going down but is being kept up at the moment, probably so no adverse action ahead of the Brexit vote. So, that’s what I looking for today really, short around 6295 initially, but if we pop higher towards 6340 area then this still looks a decent swing short area.

68 Comments

  1. Morning all, shorts covered from yesterday a bit early at 65. Still got a short running in FTSE/Dow difference.

  2. same here chippy got hit for divi have now closed short @ 6250 should of taken it @ 2635 but greed got the better of me. still had a reasonable profit.

  3. A bit of life again coming up I think, now that fall has been digested.
    First target on the upside is a break of 55/10100.
    Downside, the catalyst will be the DAX, if it loses 10070, a look at the big number would be likely, probably meaning FTSE around 20’s.
    Rally attempt appears to be underway….

    1. Shaping up as a bit of a fail really, DAX briefly overshot 100 but stayed within 50% retrace of this morning (130).
      FTSE range now 44/56, a breakout either way could be worth ten.

    1. The Wedding party assembles.
      Do you actually use any indicators/tech analysis at all anstel, or simply go on “feel”? Not having a go, genuine question.

      1. Sorry tmfp ive been doing other stuff…..it depends , at the moment it’s all feel….I know you think I’m crackers but it’s just how Im doing it at the moment….when it’s more volatile I watch your Rsi 10…..80 – 20 it’s really good……I use SMAs and seem to be able to suss out the support and resistance by feel because when I look at the charts it usually lines up pretty much the same…..love those mental fibs …..awaiting a b* llocking………:0(

        1. I don’t think you’re crackers, no more so than most people, I just wondered after you bought at 54 what the possible technical reason could be. Especially seeing as you love those mental fibs.

          1. I just sensed a build up of buying pressure at that particular time and considered a possible breakout higher was on the cards….in the event it failed but that was the reason for entry at that point….

  6. The traditional pre DOW weakness takes DAX to new lows and us nearly.
    Probably drift back up a little, but that retrace to mid 50’s now confirmed as dead cat and quite strong resistance.
    IG have 10038 as important “do not cross” on the DAX and 6258 as completed H&S on the Ftse.

    1. IG have 10038 as important “do not cross”
      hi tmfp, where do u see this info? in the platform?
      Thanks

      1. Yeah, “Levels to Watch”

        “DAX has sold off sharply since creating a new intraday high on Tuesday. The fact that we saw such a move from the key 10,121 support level pointed towards a good chance that further gains were around the corner.

        However, with the DAX currently tumbling back towards the key 10,121 support level, the reaction to that historically important area will determine the outlook for the day. Until we see a break back below 10,038, there is also a chance that we are seeing a deep retracement here, with the 76.4% Fibonacci level also a key area of support (10,103).”

        Basically I read that as now that 10121 and 10103 have broken, the action at 10038 will determine whether or not the bull trend is still in force.
        You still short then obviously?
        GL.

        1. Fwiw, IG are also ticking off DOW fib levels at 17965, 52 and 36 with an hourly close below 17911 bearish.
          Pretty stealth test of important levels coming up all round, doesn’t mean they will break, just that if this is a bull market then the momentum sucks.

  7. Looking to take out partial short before the DOW, undecided whether 35 will be it for the risk off merchants, or there might be a few more in it…
    DOW only needs to be about 50 down for us to be 40ish, easy to get bearish here and sucked in, but I wouldn’t be surprised to see a look at 900, on the basis that if 18000 is too dear to maintain, then it will look for somewhere that isn’t.

    1. Afternoon tmfp, I’ve been sitting on the sidelines since this morning but am thinking that 30-ish could be the bottom of the Ftse so I’ve just had a tiny long at 39.
      I’m still holding a fair short of the difference at average around 11685. What is interesting is that it has been roughly the same despite everything falling a bit – you’d expect it to close up a bit on a falling market…..talk my book.
      3 minutes…..!

      1. Hi chippy, yeah, 30 was my original thought, took out half at 36, I don’t expect collapso collapso but upside is limited imo.

        1. Agree so got out whilst strolling around for +10.
          I’m still feeling very mixed about it all, on the one hand I’ve still got my end of year target at around 6500 on the other hand I really don’t think we should be here (62**), at moment with what is being reported, what may or may not happen with the referendum, etc etc. but mainly I think the Dow is far too high on a squeeze…..stop yawning at the back.

          1. End year, referendum etc…. lucky I only intraday trade, I can’t be looking that far ahead, have enough trouble with the next 5 minutes…..

  9. DOW maybe heading to 18000 again and FTSE in 60s or possibly 70s maybe?
    IG has 18000 on their target for today but I don’t think we will see this before our bell time but again who really knows.
    Lets wait for 60s or maybe 70s to short!

    1. If it gets to 60/70’s I’d probably be longing, but adding to short in mid 50’s.
      The big resistance at 55/58 is clear.
      Do you mean the PIA 18010 target on IG?

      1. Everything is bearish today and german 10 year yield has made new lows as per cnbc ”The 10-year German Bund yield has crept below 0.03 percentage points for the first time ever. The 10-year yield shed another 3 basis points to touch a new all-time low of 0.027 percent.”

        Plus everything I am reading today is bringing by bears out so if I see any bounce today I am heavy short doesn’t matter it’s 60 or 70.
        http://www.ft.com/cms/s/0/fd505778-2d68-11e6-a18d-a96ab29e3c95.html#axzz4B5kj4dsS
        GL tmfp

  11. Nick – There are still some issues with website loading up and I have just had loading error couple of times, also when you are posting comments the forum basically just crashed! Not sure if anyone else is having the same trouble.

    1. Cheers Rick and sorry to hear that. Not really sure as not had any issues myself or reports thats its been offline. If you get any specific error message next time, if you could let me know what it is (screenshot or whatever) that would be really helpful. Thanks

      1. Oh hi Nick just spotted your comment…….I meant the market at that time………your site is working extremely well for me at the moment….no delays at all……

      1. still holding and now is time for DOW bounce and then short covering for MHH sounds like plan!

  14. i have noticed now many times that when we get a sell off it drops quite strongly then it recovers momentarily and then we get a second drop….it’s very often after the second drop that it bounces and rally’s strongly…..

      1. We had a “conversation” some while ago about being red braces, king of the world, types. With a little bit of ammo I reckon you could move the Dow either way 500 points. Strange thing is that there will be Americans doing what we are doing and desperatly watching the Ftse for their clues – which dog is wagging which tail?

        1. None of us retail traders have any influence (or clue) really, equity trades are only part of a huge arbitrage with bonds, currencies and commodities for the big firms.
          There’s no twat with his sleeves rolled up yelling BUYSELL anymore, just computer programs with stress models and a server that costs £5m a year to be plugged in a microsecond closer to the exchange’s one than everybody else’s.

          Still short of balance and added a bit back at 50, looking for this rally to peter out before the bell, maybe 40?

          1. And as I said, I just don’t see a squeeze. There’s all the signs of a bull market petering out, so any rally is treated as a resumption of trend, but I just think it’s summer quiet and random.

          2. Oi, less of the twat with his sleeves rolled up….there was a documentary on big bang some while ago, guess who was on it with his sleeves rolled up shouting buy/sell.

          3. You? LOL.
            There’s an old LME picture with me in it, but I ain’t telling you which one.
            😉
            Cheers!

  21. Morning guys.
    Was expecting a sellable rally first thing but just further weakness.
    180 might be a short term bargain but now DAX has broken just about all short term support levels including long term uptrend, in no great rush to catch knives.

    1. Morning tmfp – I wennt long at 93 but closed it for couple as dont holding longs as still struggling with btd thing but anyways now short at 203, let’s see if we can get to 80 or 75

      2. Hi Rick, not a day to practice holding longs lol
        I covered at 75 but didn’t long, not getting rabid in reselling but that bull complacency just got a kick up the arse.
        IF I was that sort of trader, I guess scale down buying from here to 6150 with a stop at 6120 would be in order. But I’m not.
        GL.

        Hey Senu, hope you’re still DAX short mate!

        1. Yes, 6150 looking a nice area to go long with 30pt stop but it’s friday so I will stick my usual STB thing for now!
          GL

  22. morning tmfp, all
    Looking pretty oversold on hourly rsi though not sure how reliable the out of hours rsi is…
    tried a long with s6 at 81 and failed, but re-longed at 75 and took 8 points…
    looking a bit bearish!

    1. Hi inoodle
      Congratulations on ignoring all sensible advice and joining us full time 🙂
      Out of hours data is of very dubious value so I’d make a policy decision early in your career to ignore it.
      Hourly RSI at 0800 will only include what (didn’t) happen overnight as a base.
      You can get cash data/charts from investing.com or from PRT on IG by altering the defaults.
      GL.

      1. Hahaha thanks mate – can’t tell you how good it feels to have thrown off my shackles (however temporary or not it may turn out to be). My last day at old work is brexit day.. should be fun (on trading floor)…

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