No Doha crude agreement 6305 6345 resistance 6234 support

Support 6271 6270 6234 6200 6130
Resistance 6294 6329 6346 6365 6399 6455
Good morning. Sunday’s talks between major producers ended in Doha without any agreement on limiting output, which has seen the FTSE 100 and oil both slide to be looking at a -65 open today. Gold hasn’t climbed that much as yet though, bout 10 up from Friday. Having stalled at around the 6375 area and the top of the daily channels on Friday it was only the news from Sunday’s meeting that was going to push us to 6400 or higher. Having now dipped back to the bottom of the 10 day Raff channel at 6270 its going to be an interesting start to the week!

US & Asia Overnight from Bloomberg
Crude tumbled the most in two months and currencies of oil-exporting nations slumped after talks between major producers ended in Doha without any agreement on limiting output. Asian stocks retreated from a four-month high as demand for haven assets boosted the yen and Treasuries.

West Texas Intermediate plunged as much as 6.8 percent, while Canada’s dollar and Malaysia’s ringgit posted the biggest losses among major currencies. Japan’s yen climbed toward a 17-month high after Group of 20 finance ministers signaled opposition to curbing its strength. The MSCI Asia Pacific Index of shares fell for the first time in nine days, led by energy stocks. An exchange-traded fund tracking Brazil’s stocks rallied as President Dilma Rousseff lost a key impeachment vote.

Global equities have moved largely in tandem with crude this year and both rebounded from multi-year lows over the past two months amid prospects oil-producing nations including Saudi Arabia and Russia would agree output caps in Doha to address a glut. Renewed instability in crude prices poses a risk to financial markets at a time when China’s economy shows signs of improvement and central banks are loosening monetary policies across much of Asia and Europe.

“There was an expectation baked into prices that you’d see a production freeze, and with no resolution, it adds to negative drivers for the oil price, commodities and commodity currencies,” said Mark Lister, head of private wealth research at Craigs Investment Partners in Wellington, which manages about $7.2 billion. “We will probably see equity markets go off the boil as some of that recent strength in the materials and energy stocks unwinds. The reporting season remains in focus this week.”

Morgan Stanley, International Business Machines Corp. and Netflix Inc. are among companies reporting earnings on Monday. Singapore announced the steepest slide in its exports in more than three years for March, providing more evidence of a weakening economy after the city-state unexpectedly eased monetary policy last week. International Monetary Fund Managing Director Christine Lagarde said over the weekend that declines in commodity prices are likely to be long lasting.

Commodities
Crude was 4.7 percent lower at $38.48 a barrel as of 1:58 p.m. Tokyo time. It climbed above $42 a barrel in New York last week for the first time in 2016, having over the past two months rebounded from below $30 after Saudi Arabia, Russia, Qatar and Venezuela announced a preliminary agreement to freeze output. Discussions stumbled in Doha as Saudi Arabia and other Gulf nations refused to agree to any deal unless all OPEC members joined including Iran, which wasn’t present at the meeting, according to Russian Energy Minister Alexander Novak.

The failure of the Doha talks means “the oil price will reset lower and could even retest $30 over the next three months,” said James Purcell, a cross-asset strategist at UBS Group AG’s wealth-management business in Hong Kong. “Short term, that will dampen enthusiasm for risk assets, thus the moves in commodity currencies and yen are a knee-jerk reaction.”

Gold advanced 0.1 percent, having rallied 0.5 percent on Friday as U.S. reports showed manufacturing output unexpectedly declined and consumer confidence fell.

Currencies
The Canadian dollar, known as the loonie, sank 1 percent versus the greenback and the ringgit dropped 0.8 percent. Crude is Canada’s second-biggest export, while Malaysia is Asia’s only major net oil exporter. The Aussie lost 0.7 percent and the Norwegian krone weakened 0.6 percent. One-month forwards for the Russian ruble slid 1.7 percent.

The yen rose 0.7 percent. U.S. Treasury Secretary Jack Lew on Friday called foreign-exchange market moves “orderly” — a signal that the U.S. doesn’t view yen-selling intervention as warranted. The rebuff came after Japanese officials warned about one-sided foreign-exchange moves and speculators built record bets for the yen to extend this year’s 11 percent advance.

Stocks
The MSCI Asia Pacific Index fell 1.4 percent. Cnooc Ltd., China’s biggest offshore oil and gas explorer, dropped as much as 5.9 percent in Hong Kong. BHP Billiton Ltd., Australia’s largest oil and gas producer, lost 3.1 percent. Qantas Airways Ltd. tumbled as much as 14 percent — the most since December 2013 — after Australia’s largest carrier scaled back plans to expand capacity on domestic routes.

Japan’s Topix index sank 2.7 percent. Toyota Motor Corp. slumped 4.5 percent, the most in two months, after it said profit may be reduced by about 30 billion yen ($278 million) this quarter due to a series of earthquakes that struck southwestern Japan since Thursday and disrupted parts supplies. The quake was the country’s biggest natural disaster in five years and also halted some production at Sony Corp., which slid as much as 7.8 percent. Insurers Dai-Ichi Life Insurance Co. and Tokio Marine Holdings Inc. fell more than 5 percent.

The Next Funds Ibovespa Linked ETF surged 3.7 percent in Tokyo as opposition lawmakers in Brazil’s lower house of Congress reached the threshold of 342 votes needed to advance the motion to impeach Rousseff to the Senate.

“It will keep Brazilian assets supported but the market had already been expecting the impeachment for a while,” said Rajeev De Mello, who oversees about $10 billion as the head of Asian fixed income at Schroder Investment Management Ltd. in Singapore. “This is one positive for emerging markets coming from Latin America.”

Futures on the Standard & Poor’s 500 Index dropped 0.6 percent, while contracts on the U.K.’s FTSE 100 Index were down 1 percent.

Bonds
Sovereign bonds were in demand, with the yield on 10-year U.S. Treasuries falling three basis points to a one-week low of 1.73 percent. Australian notes due in a decade climbed for the first time in six days, pushing their yield down seven basis points to 2.48 percent. Japan’s 20-year yield declined to a record 0.28 percent.

The cost of insuring corporate and sovereign bonds rose across the Asia-Pacific region Monday. The Markit iTraxx Asia index of credit-default swaps climbed 3.5 basis points to 143.5 basis points, according to prices from Nomura Holdings Inc. The gauge is on track for its highest close in a week. [Bloomberg]

FTSE 100 Outlook and Prediction

FTSE 100 Prediction
FTSE 100 Prediction

If there was no agreement then oil and equities were always going to slide but it meant taking a gamble on the outcome on Friday so shorts have done well, bulls not so much! Global equities have largely followed crude oil over the past few months with the rebound. Renewed instability in crude prices poses a risk to financial markets at a time when China’s economy shows signs of improvement and central banks are loosening monetary policies across much of Asia and Europe. For today, we are looking at opening around the 6275 area which is S3 and also the bottom of the 10 day Raff. As such I think we will see an initial bounce, just to wrong foot any shorters who come in late (i.e. now) and also as shorts from Friday are banked. I can see us rising to 6304 where we have the 200ema on the 30min to start with, and if we were to break that then a rise to the daily pivot at 6345 is likely. However, it’s still short the rallies time for the moment, so both these levels look worth shorting from. A dip back down to the 6200 area is likely to see good support there, mainly as it was resistance for so long, though we do have the daily 200ema at 6234 as support first and an area that might be worth a long. So, areas I am watching today are 6234 and 6345 – quite a range over all, though there may be some action at 6304 as well, which is the pink arrow I have drawn on the chart below.

167 Comments

  1. Morning…..not a good start for me…….lost one of my Ftse longs from 6350.5 as it got stopped out at 6300 for -50.5 pts on the good side I readded back to my Dax swing at 9940 and its back in its box…….think that’s a longer term play…..my other two Ftse longs I had hedged over weekend at 33 on Friday evening to reduce risk….closed those two shorts too late at 99 and 98…didn’t have the confidence to close them down in the 70s ……I’ve got two Ftse longs now both in the red from last week from 63.4 and 61.9 …Bad trading on Friday from me I’m afraid…only saving grace is the positions are all small…..oh well best of luck all.

    1. Morning all,Morning Anstel,since this was the pundit predicted Doha outcome after what the Saudis said last week I reckon this dip could just turn out to be a tell on where the floor is for a few weeks,17800,10k and 6300.That’d be nice anyway.

      1. Morning WSF….I couldn’t help thinking as I watched the closed Dow drop that the Ftse seemed to be holding onto its recent gains quite well…..I think you are right…..the Ftse might well stay around or above the 6300 level…..That’s not based on any technical analysis though…..more a hunch……anyway I’m sitting on my hands now GL.

    2. Hiya anstel, being the sort of ‘news’ trader that you are, were you expecting Doha to bring something positive to be long over that particular weekend?

      1. Hi tmfp…..the only reason I was long over weekend was I got stuck in 4 Ftse longs on Friday……I had a target in my sights of 6370…..it didn’t happen.i dumped my lowest Ftse long in the closing minutes of Friday evening at +0.4 and was left with 3 longs….all losing…stop at 6300….so after that Paris disaster I try and reduce risk over weekend…so I closed out some of my Dax long positions that were in profit…to get risk off,then I shorted two Ftse positions ( H*dged them :0) ) at 33 so I had just the one Ftse position that could hurt me………like I have mentioned and you know anyway the oil is being used as the new QE and after watching all that BS with the Greek crisis last year I didn’t think an easy outcome over the oil supply situation would happen as if by magic on Sunday.no I think the Ftse will drift higher and then a nice final icing on the cake will come in time for the election in the form of an oil supply cut agreement…..tell you what I have this lingering thought though that we cousd get a surprise drop at some point when we least expect it……anyway not looking to get told off for mentioning my opinion…like you rightly said metaphysics doesn’t pay the bills so I’m nursing these two Ftse longs….sitting on my hands till I can get them sold and then do some scalping….all the very best today good luck…

          1. It was damage limitation really but I’ve been trading smaller size mainly and wide stops…..what that has suggested to me is the closer to weekend it is the tighter the stop…..in case it gaps down on Sunday night….ummn still trying to work out this stop placement and get it optimised……

          2. Far be it etc. but stop placement and R/R are related. When you longed in the 6360’s then presumably you had a target +. If target+ <than stop- then that's not good R/R is it?
            Not really hindsight, but surely no one expected Doha to produce anything tangible. If you pay attention to such things then surely downside was inevitable, or at least upside limited enough not to justify a weekend long?
            Anyway, I'm nagging already so I'll shut up. 🙂

          3. It’s not nagging tmfp….it’s constructive critisism that’s how we learn…I made a mistake……I was scalping with a wide stop looking for 10 pts and it failed……happens….sometimes things go well too though…I replaced my Dax long positions this morning at 9940 and its 10030 now……they are only minimum size but sometimes it works…like WSF says from the whipsaw song…..one good trend pays for them all……

  2. Hello chaps, back and fighting fit 🙂
    Haven’t done much this morning, just seeing more of the same, sellers very wary and trading light with not much flow, not the best of conditions for my system which needs momentum.
    I think March was the strangest price action I have seen for a while, the result being that 6200 takes on quite a bit of significance and should bring the BTDers out in force, if the bears summon up the courage to test it.
    I floated the idea a while back that TPTB want to encourage less volatility in the markets and unfortunately I think they are being successful, which is bad news for people like us. Stats seem to indicate continued spec short positions about 2:1 and I’d think that CB policy would be to continue to burn their fingers with talk and direct support until they behave and BTD’s. Then everything will be rosy….lol

    2. Welcome back tmfp,hope you had a good break in the sun,wasnt a Dutch Rock festival by any chance was it ?

      1. Hiya. No WSF, just a pleasant rural break in Andalucia. Spanish economy doesn’t seem particularly vibrant. I got dragged round a “project” 7 bed farmhouse in a white village… 28k euros. Cadiz is getting very tatty around the edges…
        Popped into Gib to research a supposed billion dollar crypto company. Found a sleazeball and a PO Box. Just as well the UK is leading the fight against tax havens from the front….

        Just longed that DAX oversold dip on the FTSE at 08, took first +10 of the week 🙂 Think I’lll short 30ish looking for a morning high and maybe, just maybe, a reality dip from the DOW later.

        1. 🙂 I had a fiver for charity with myself on you being at Roadburn,was looking for an excuse to put the work into finding a charity that isnt bent.I’m guessing you are shocked and surprised by the major |UK news you missed though,so if you like I’ll send a bunch of Daffodils to that Vicar whose wife Robson Green has pinched.

          3. Well looks like the vicars wife is looking for Mr Right……….while she is looking she’s with Mr Right Now!

  4. Gappers going for that 6335 this morning. 10 day raff at 6270 held well.

    Was looking to short at 6345 but might have a nibble at 6330 too tmfp.

    1. Morning Nick. Yeah I’m in at 31, more in 40’s I think, stop around 50 something.
      Nothing like a well thought out game plan lol.

      1. Mind you, fib wise, if we count this rally from 6075 for 300 points, then 6260 is a neat 38.2%…

    1. Morning custard.
      I’m looking for the DOW to fill this gap down, equivalent to <6345 for us, then lose up to 200 points and take us back below 6300, maybe 6280, then BTDers to start sniffing about.

  6. Morning all. Had a lovely overnight session shorting cadjpy, oil and ftse and Dow. Oil took money off me as I entered way to low (muppet) but the rest came good. However managed to give it all back this morning after shorting what I thought was a pullback… I then kept widening stop as ‘I’m sure it’s about to turn’… It was, just about 40 points higher haha.
    Lesson learned re movable stops!?
    Also short from 6328, but with stop at 37.. Perhaps too tight

  9. Given up trading individual stocks and moved to currencies. I like currencies in that they trend much better. I am finding stocks a little boring trading. The volatility is too low which makes for really boring trading, while the volatile stocks are too risky because of the unpredictable gapping that often occurs at the open, meaning very difficult to trade with tightish stops and the prices can gap up or down and take the stop with it. It will work in your favour sometimes but you want to work with a fluid market. l prefer currencies because of the 24 hour liquidity and their ability to trend much strongly than stocks, particularly on intraday level, and also look for potential reversals which can be really profitable. Spotting both is hard but can be rewarding if you get in early. Also, with more practice hopefully it should get easier.

    One thing I preferred with stocks is they seem to respect strong support and resistance levels better, but as I say, the movements can take days or even weeks to reach your TP levels when they do work out in your favour.

  10. Liking the look of those 1 min DAX candles 11.31/32. A mini exhaustion top unless they retrace and break a bit quick?

          1. Cheers lol..I’m scared though :0)…..here goes………What you doing watching the Dow…….it’s closed :0)))…..my mate told me that :0)

          4. Oh my triangular shaped hat again……ok I will go and hide in the corner…….<:0(…….lol!!

    1. didn’t want to give my stop, i thought this would move higher with more sellers in the market currently. may be another attempt to 45 area will be nice

          2. I’ve been taking failed signals as an indicator a fair bit lately,nothing original about that,but i think it’s worth doing.

          5. Ohhhh it was S1 also… Right. I was just looking at consolidation point from prior. Note to self: be more aware of basics.

        1. Keep the entertainment coming chaps…..i need a distraction …….I’m getting itchy fingers.but im sitting on my hands I am .i am…don’t press any buttons anstel :0)

  14. Very true Senu.
    I keep getting caught between trading between support and resistance on the 1min or looking for bigger points. What seems to happen is I end up seeing profit evaporate. But only getting 5-10 points seems like maybe I’m doing it wrong…

    1. As always it runs out just before I needed to wait a little bit longer. But I thought I waited long enough. I’m hungry and fed up. As long I didn’t lose anything.

          1. I was going to average up at 45 but it never quite got there.
            The plan is still for DOW weakness to drag us back down later, probably be scuppered by BS from this Dudley bloke.

  18. Next support 10020 on the Dax, if that breaks we have a very lopsided top, but by then we will be in the hands of the DOW most likely.

        1. Actually I think I’ll close the rest before Dudders speaks and see where it is afterwards

          1. Yeah, if in doubt get out, especially if you’ve got a bit of blue.
            Oil’s not holding particularly well, I can see a negative DOW as I say above. STB’s until about 15.30 I reckon and see what’s what then.

          2. Dudders saying something ‘good’… Ie slow rate rises.(because things are bad I suppose).
            Wonder if this will go above 37 or 45.

      1. Maybe, not much of a pullback so far, but any bears this morning will be mostly burned already and a bit cautious. Just drifting really until the Yanks.

    3. Sometimes it’s a complete waste of time watching this lot…..a lot to be said for putting stops and limits in and going and doing something constructive I’m thinking.

      1. once I thought to get out @ 34, with small profit, had a phone call and missed it completely.

    1. He probably couldn’t point out Europe on a map.
      Seems to have inspired an oil rally though.
      Missed a ftse reshort in 30’s, it’s looking for an excuse to break 20.

      1. If we flash down to 10ish soon, I’ll cover balance of short, then look for a short lived DOW opening rally to hit it again.

      2. If the Dow is around here at the open though opening gap is attractive , Kramer just said 6% oil moves are basically intra day for the last four and meaningless a week later along with any effect on Indices,so that’s bullish too 🙂

          1. Yeah I’ve read a lot about Opening gap from americans lately,think it is popular,although they seem to say monday is lowest probability.That was a good number though,not too big and not too small,so first 15 min bar then close half and run the rest for a full close or in profit stop,they want 897 I’m already out.

          2. Hit 35 with a reshort, lets see how the plan plays out, DOW not looking like it wants to go down at the mo though.

  21. Hi guys/girls,
    saw this tweet flying by from Nick
    3.295 #FTSE #dividend this week

    what does it mean?

    2. I think, without much justification, that this will look dear tmrw, if not later this afternoon.

  24. Once again, this ‘revaluation’ type action, bears are very wary with BTDer’s everywhere.

    1. Half out for av +7 I don’t mind selling into strength but this no follow through is a bit tedious.

  25. So what I have learned recently is that you have to ‘call it’ – you have to figure out the most likely levels and directions and then go against the herd who are still galloping full pace towards the level… It feels like trying to ‘catch a falling knife’ in some ways (if it’s dropping and you’re going long), but I think it’s subtley different though I’m not sure I can explain why exactly.

    1. Yes, it’s one way of trading. Other ppl jump on moves and go with them after they develop.
      Timing is crucial when contra trading, that’s why my trusty rsi is handy for seeing when the move could be overextended, but not so much recently because of the reasons I’ve been moaning about.

      1. Yeah but even when intending to go with the trend, you need to buy at the bottom of the swing down, so even that seems counter intuitive – ie it’s going down, but that’s the point to buy. I think before I was always buying in the direction of the move on the low timeframe perhaps (which could well have been the opposite direction of the higher tf.

        1. These are secrets of the universe we’re talking about here 🙂
          What I meant was there are many people who will only buy in markets that are already going up, or vice versa, on the basis that it’s a gamble/pure luck to pick a reversal top/bottom, far easier and safer just to jump on an established move.
          Look at the DOW, +120 in an hour since the open, no meaningful pullback for the last 2000+ points. Why sell now, they say?
          A bloody good question really.

          1. Haha I actually find believing something will continue quite difficult – perhaps it’s a mirror of my lack of commitment in the real world

          3. I know you’re joking re real world comment, but it’s very important that you recognise psychological factors that predispose you to being a hard wired bull or bear.
            You don’t necessarily have to go for therapy and be cured of it, just make sure you recognise it and plan your trading strategy accordingly.

          4. I was half joking, but I do notice I’m wired for doom and gloom a bit. As you say, must make sure to adjust for the bias.
            Really appreciate your help btw.

  28. So here we are approaching what used to be called the MHH before selling became illegal.
    I’m short still at 47 in real terms and just avoiding getting squashed by the DOW steam roller that I severely misjudged. To think that no agreement on oil cutbacks would be bearish, I must be mad.
    Can’t see much reason for a sell off, every dip being fomo’d, so escape with minimal damage is the plan. Quite how, is another thing.

    2. yeah, but if they had announced some agreement would it have been Bullish or ridiculed as PR ignoring the real oversupply etc etc,+ what the Saudi’s were saying about Iran last week.I mean was that dip really a response to Doha or just gamesmanship,granted the FX mkt was convincing,but where was the real surprise element to prompt the action.

      1. The dip to 6260 was purely defensive mark down stuff imo, a sort of default stop search, a token demonstration of why we should all BTD.

          1. The sweet stench of Ambrose-ia.

            “…fully aware of the way Japan was squeezed by the US fuel embargo in the late 1930s.”

            I mean, wtf…..

    3. As long as MHH involves it tanking 20 points I’m happy… As I type this, oil and jpy are going for moon shots

    2. Oh yes, the more you trade the more you realise what a, to steal WSF’s asterisks, w***** you are.

      Chin up chaps, tomorrow’s another day, live in hope, die in……….

      🙂

      1. No.
        I didn’t see market since 13.30, now opened and my jaw dropped. All that short from 11.30 was just a pull back. LOL

          1. It’s truly unexpected. It practically reached all times highs, only 300-400 points left for that. Dax has got 2500 points to catch up to the highs, so as FTSE (800> points)

  32. I’m still sat on my hands…..done nothing today….risk.risk risk.not taking on anymore till I get out of these longs from Friday……not far off ones 61.9 other at 63.4…..pleased I managed to resist adding…..keeping myself in check a little better than a year ago…..good luck all.

      1. I think Ftse has 6400 in its gunsights but it’s being a bit cagey about it…trying to get everyone short before it rapes them…..might be wrong….Mr pumps European cousin lol.

        1. Be nice when the Dax gets back to 11000 :0) I’m hoping it might wake up soon and remember all that money Marios got to play with.Todays been a step in the right direction.

          2. Yes when you are watching it too closely 🙂
            I’m just watching “Now You See Me” funnily enough,it is pretty good,took it off Film 4 last night.

  33. Evening all, just shorted ftse Dow difference for June at 11607. Dunno which way everything is going to go but this gap is getting, to my simple mind, ludicrous.
    Feels like a real squeeze to me but very nervous about straight short when if showing over 80%shorts. Almost fancy buying some!! Good luck

  34. Morning all
    Is it normal for the dax to move in the opposite direction to the ftse for 8 mins during open ??

    1. It had that big rise up to the 230s at 7 ish……probably just some profit taking is my guess…..I think it’s trending up this lot FWIW. Good luck.

        1. Yeah I’m holding ,,,,,one good trend pays for them all.You know WSF I once shorted the Dow at 16800 after it had risen from 15800…..quite big too…thought it was a dead cert ……it went up a further 1200 pts …….I can see the Dow hitting 19k ……and it’s the Dow we are trading…….just in the disguise of Ftse ….Dax etc…..just my views…..I’m only 2.5 yrs into this trading but you get to see patterns…..good luck.

          1. Yes,if we think about the election then I think it is more likely to flatten for the Summer than correct.I mean I dont think this will be a sell in May year.

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