Nearing some key resistance – 6620/30

Good morning. The FTSE remained fairly bullish yesterday testing the 6600 level mentioned. The short off the 20 day Bianca channel didn’t get much only dropping 10 before the bulls brought it back up. The 10 day at 6596 was slightly better for the short, with a low achieved after of 6577, still not showing much bear though. Whilst the bulls are in control, buoyed by the fact that the Syria situation might not escalate into a war, the next level of interest is the 6620/30 area where there is a cluster of resistance, most visible on the daily chart daily ftsewith the descending ProTrend line, from the 1st August, as can be seen on the right. I therefore still remain with the view that we are not going to push massively higher from here in the short term, and fully expect a smallish dip here then a rise into the year end.

Asia Overnight from Bloomberg

Asian stocks swung between gains and losses after President Barack Obama pulled the U.S. from the brink of a military strike against Syria. Energy producers led declines.

The MSCI Asia Pacific Index was little changed at 137.08 as of 1:14 p.m. in Tokyo, having swung between gains of as much as 0.4 percent and losses of 0.1 percent. The measure advanced 6.2 percent in the past nine days as factory output in China accelerated to a 17-month high. The rally drove the gauge’s 14-day relative strength index, an indicator of trading momentum, to 66 yesterday, near a threshold of 70 that signals to analyst shares may have risen too far.

“People are taking profits,” Naoki Fujiwara, Tokyo-based chief fund manager at Shinkin Asset Management Co., which oversees about $6.5 billion. “Syria’s situation was much more unclear last week and investors couldn’t take a position, but now things have turned and they are willing to take more risks. But uncertainties around Syria do remain”

‘Cautiously Optimistic’

Obama said in a live broadcast from Washington today that he had asked Congress to delay a vote authorizing the use of military force while pursuing a diplomatic solution that would have Syria surrender its chemical weapons.

“We’re still cautiously optimistic,” Daphne Roth, Singapore-based head of Asian equity research at ABN Amro Private Banking, which oversees about $207 billion, said in a telephone interview. “Asia is very polarized and I prefer countries that are running current account surpluses such as China. Liquidity will be withdrawn out of Asia as Fed tapering materializes. That will have a big impact.”

The Federal Reserve has said any reduction in stimulus will be tied to a sustained recovery in U.S. employment. The central bank will decide to cut its $85 billion in monthly bond purchases this month, according to 65 percent of economists surveyed by Bloomberg from Aug. 9-13. The Federal Open Market Committee holds a two-day meeting on Sept. 17-18.

U.S. Futures

“Markets probably won’t shoot much higher unless we have more positive catalysts,” said Shinkin Asset’s Fujiwara. “They will take a breather from time to time.”

Futures on the Standard & Poor’s 500 Index slipped 0.1 percent today. The equity gauge advanced 0.7 percent in New York yesterday, extending gains for a sixth day, as reports showed China’s economy is improving and amid signs of easing tensions over Syria.

Outlook

ftse 100 prediction
ftse 100 prediction

We are still within the 30 minute channel which will most likely contain prices today. To start the day off the EMAs are looking bullish though the price is virtually at the 6602 resistance level that will be key. If that’s broken then the 6627 area is likely to be hit though with some significant resistance at around this level on the daily chart, and also on the other indices (Dax, S&P) the bulls might struggle to really push on above that. If they do however, then 6650 is the next level to watch. For the bears, a break below 6550 will break the upward trend and there will be more downside.

61 Comments

  4. FTSE/4 hrs – We’ve had a moderate upswing since about August 28 (you could argue for August 22). The last three bars suggest a mild pullback for the moment, heading perhaps for linear regression 100-period (LR 100) territory around 6550. The trend remains up until price and LR 10 cross below LR 100 and the gradient of LR 100 turns negative.

  5. Jack – Have a look at FTSE 15 mins. You’ll see quite a strong downtrend in that TF, accompanied by the usual fluctuation. So I’d suggest caution in going long. Good luck!

  7. Just been watching the market every 10-15 mins, no positions yet and really can just sideways movement until US markets open. Nothing special happening unless you count wholesale inventories at 3:00…

  9. Lost a packet shorting the Dow!! One way manipulation from 15000. Some 3 days of consecutive gains on bullshit!! 350 points!! Resistance?? Yeh… at 17,000!! Thinking about not trading DOW anymore….range is too wide…also too unpredictable these days…. whatever you make in it you seem to give back on silly days like the last 3 days!! Not worth the stress! Anyone agree?

    1. Yeah shorting the dow, stop at 15260, but bricking it fot that. Down quite a bit already.. Keeps on rising :-/

  10. DOW looks a complete opposite to FTSE and DAX. I wish our English fellows followed DOW today as usual. But of course, they just do everything to annoy me.

      1. I was long still, but had to work so missed to close on the spike. Closed it now though at 6588: Still had a profit today (even after a morning loss) +18. I was holding 2 positions of my usual stake so I had a double risk, and my entry wasn’t that great: 6574.9
        But glad to have some sort of a positive outcome 🙂

  16. Ig almost 70% got selling positions they are evidently stop hunting, it just keeps going higher, no data no politics. Using the easing Syria situation? To give an excuse to make the market rise.

  18. To make matters worse s&p down 1.2, DOW up 60pips how does that even make sense. Glad the ftse is moving slow in comparison. Crazy september…

  19. To make matters worse s&p down 1.2, DOW up 60pips how does that even make sense. Glad the ftse is moving slow in comparison.

  20. As they say in Dragons Den…I’m out….just got liquidated automatically by IG. Huge spike in Dow to 15275….pure stop hunting by the big boys..not trading Dow ever again!! Lost 2k in last 3 days….not averaging down anymore in Dow. Been doing it since Mon.

  21. You can use it to your advantage by keeping your long running after the close. Worked for me today..;-) Sometimes it’s just a simple case of cat and mouse with your broker, which is pathetic, but true.

  23. Back to equities…as least they move slower…you make money slower…but you also lose it a lot slower…you don’t get the silly moves like the in the indices…especially the DOW. 14786 to 15300 in a few sessions?? And before Fed next week? Right you are..

  24. I would love to know who went long on the Dow today at 15170 after the 300 plus move in 2-3 sessions…no rational trader would…they would fade such a move…

  25. With a few diversions (and conspiracies) along the way, the Dow has put on c515 points in the last two weeks, i.e. since 28 August. The upswing has accelerated over the last 3 days, including today. Price broke through LinReg 100 yesterday and LinReg 10 is on course to do the same, ushering in the possibility of a nice little bull run. (Subject of course to Syrian and Tapering developments. :))

  26. Doubt many people were look at IG stats that 65% going short got hammered… The funny thing is as doon as everyone goes bullish mode the market will drop so fast itll be stupid

  27. Obviously CNBC and all the pundits never heard of ‘buy the rumour, sell the fact’ regards Syria. Syria was just an excuse for traders to make a trade. Chinese data in last 2 days attributable to the rally? Yeh right…miners sold off big time a few months ago on poor Chinese data…then we are told no one trusts Chinese data because the figures are likely to be massaged…so now all the miners have rallied…all BEFORE FED decision next week which is crucial for miners…boy we have some smart economists working in Wall Street and London…

  28. Just removed DOW from watchlist….don’t give a rats arse about DOW anymore..just lost me £2k in 3 days….

    1. Yeah no how you feel mate, lost 3 grand in a day yesterday :-/ My own fault but cant believe it still rising..

    1. Crazy game this hubris . DAX at the highest in a long time . Like 13 years .

      Shorted at 8470 and still going up !! I’m a newbie to indices but the calls to make are a joke. Bubble will burst soon .

  30. If I hadn’t tied up my money in DOW short and suffered losses I would have entered a Lloyds short at 78.7p yesterday. Came good today as I expected. A 3p drop.. if you trade ‘shite’ like the DOW, it makes you miss more easy equity trades…makes you take your eye off the ball..

  31. Thanks Hubris…I don’t watch dax…don’t have it on my watchlist…too much to watch already…obviously out of sync with FTSE!

  32. Hi Javed…are you still short the DOW? I hope not….I got badly burnt in this fake rally…I know it will drop, but what’s the point if you have been liquidated! So nice are IG!! They always liquidate you at the top!! B*****s!!

  34. Hi Ray

    Sorry to hear that. Yes I’m taking a lot of pain on the Dow too and may stop trading it after this year. Only started it to enhance my profits on the FTSE. In the end my best trades were on the Hang Seng and Singapore. The psycological damage caused by the Dow also affected my FTSE trading not to mention my wallet!

  35. I can join you both with the DAX …. That near 6% recovery in the last week or so has rather troubled me 🙁

  37. I’m went short on DAX at 8500. If you can remember a big drop only comes after a crazy sharp rise that doesn’t make sense. In market psychology we are past greed territory and fear will soon hit the markets. It may take a week or days but it will come soon!

  38. … Let us hope so revise that previous comment of mine to nearly 7% we’ve had a cheeky little 40pt rise out of hours and its not even 11pm yet 🙂

  39. If you are looking to day trade at the moment its very risk to predict where the price is going to swing to, but one thing is true. The markets have priced most of the good news already, and considering all that is going on behind the scenes that people seem to have ignored, Greece, Italy, Spain, Portugal even France are still in trouble but not been commented by the media at the moment.. It won’t take much for us to see a sharp unpredicted drop in the markets! I’m short with a small position 2p per point with enough to cover short term rises! And don’t forget we are in September and coming close to year end! 🙂

  43. If you intend to short the Dow tomorrow then please make sure you have a nurse, 2 doctors and an ambulance on standby. Good luck from someone who lost £2k shorting from just 15040 on Monday. IG liquidated me at 15271….

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