Good morning. Well it looks like we are on track for a Tory majority, the SNP have hit a home run in Scotland with 58 out of the 59 seats, Labour, Lib Dem have taken a mauling, and UKIP have faded away. The FTSE started reacting positive around 10pm as results started, rising to 6994 this morning – where I have 25ema on the daily resistance. However, its also NFP Friday today (non Farm Payrolls, USA), so could be all over the place. A Tory majority should be good for stock prices and the economy in general as the fiscal policies of the last 5 years can continue. Yesterday was interesting as we had a sharp decline in the morning, 100 off the highs set at 7am, as it looked like Labour where stealing a march on the other parties, then a decent recovery in the afternoon. I was a bit too early with my 2 longs in the end.
US & Asia Overnight from Bloomberg
Asian stocks rose, after the regional benchmark index closed Thursday at its lowest in a month, as investors awaited U.S. labor data.
The MSCI Asia Pacific Index gained 0.1 percent to 150.49 as of 9:45 a.m. in Tokyo after ending yesterday at its lowest since April 7. The measure is poised for a 1.6 percent slide this week, its second straight weekly decline.
“There’s very little to drive the markets ahead of the macro data,” said Andrew Sullivan, head of sales trading at Haitong International Securities Group Ltd. in Hong Kong. “We may see some caution into the close. The wage levels will probably be more closely watched for signs of inflation.”
Japan’s Topix index added 0.5 percent. Australia’s S&P/ASX 200 Index gained 0.6 percent, while New Zealand’s NZX 50 Index increased 0.3 percent. South Korea’s Kospi index lost 0.1 percent. Markets in Hong Kong and China are yet to open.
E-mini futures on the Standard & Poor’s 500 Index added 0.1 percent. The underlying equity measure rose 0.4 percent on Thursday in New York as Yahoo! Inc. led a rebound in technology shares.
U.S. employers probably added 228,000 workers to nonfarm payrolls in April, after a 126,000 increase in March, according to economists surveyed by Bloomberg. Federal Reserve policy makers are monitoring labor data to determine the timing of higher borrowing costs after economic growth slowed in the first quarter for reasons the central bank called “transitory.”
David Cameron is on course to remain prime minister at the head of a minority government after the U.K. general election, an exit poll indicated. The Conservatives were forecast to win 316 of Parliament’s 650 seats, with the Labour Party trailing on 239 seats, according to the survey of voters published as polling stations closed at 10 p.m. Thursday. The pound jumped.
Energy shares led losses on the MSCI Asia Pacific Index Friday as oil in New York headed for its first weekly decline since March. [Ref]
FTSE Outlook
An updated BBC forecast at 6 a.m. put the Conservatives at 325 seats of Parliament’s 650 seats, more than in the last election in 2010, with Ed Miliband’s Labour Party trailing on 232 seats. The Liberal Democrats were forecast to win 12 seats, a fifth of their 2010 total.
We have had a decent overnight rise as the results have started to come through, however the daily chart has 25ema resistance at 6994 and we have in fact dropped off that level since hitting it just after 6am. I am going to go against the initial grain and actually expect a bit of a drop from this resistance to 6910 where we have the daily pivot before the bulls step in. I imagine that a lot of bulls will have missed that rise so far, waiting till the results of the election where confirmed before entering. The market will aim to stop out those early bulls, before the big fish can enter lower down. Just a hunch mind! We have also pushed above the top of the 10 day Bianca channel at 6946 so a dip to back test that channel is also likely. Just above the 6994 resistance we have the top of a 30min PRT channel with resistance at 7007, and then the top of the 20 day Bianca at 7030. Support below the pivot is 6892, then 6860 for the bottom of the 20 day Bianca and then 6824 for the 10 day Bianca though I would be surprised if we went that low today. Don’t forget we have NFP jobs news at 13:30 which is a market mover.
Despite IG’s best efforts, made some pips from a pre market early long, now looking at that 90/94 area for some support, so a small long here for a bounce.
Took 10
What IG efforts do you mean?
Oh, they hit me with a ‘price no longer valid’ after about 10 seconds wait, then froze me out for over a minute ‘deal processing’ which wouldn’t refresh.
Goodness me. I would run from there. ETX works fine for me. I use Metatrader. It took me time to adjust but I don’t regret trying it last month. I also use Spredex.
Thanks Jack, I keep meaning to do something, I’ll give them a try.
You can get a bonus there. Not sure if they leave it to you after 3 month. But it’s a good start.
You need to apply for FX Classic account (or ETX MT4 account – what I’ve got). You can download a platform on computer. Ask for bonuses.
There other types of accounts if you prefer.
Wonder when the bookies will start taking bets on David Milliband to be the leader of the labour party in 10 years time and prob get in as PM, once he has helped Hillary be president for her 4 years. They are talking about Yvette Cooper to be the next leader after Ed, so next election in 5 years she loses and gets booted out, then David swoops in
I’ve just had my daily dose of Zerohedge, so in five years I’m looking at the elite living in armed guarded gated communities, martial law, anarchy in the streets and Boris as Lord Protector.
Bought a little more Bitcoin to be on the safe side 😉
They are jolly aren’t they
A question for you Nick, regarding gaps.
I know that most people use 24/7 data for tech analysis, but I give much more weight to official hours trading than out of hours, so there is a 95 point overnight gap atm on the FTSE.
It’s not a classic breakaway or exhaustion gap as it’s within the trading range, so I would be looking at it being filled over the next few sessions.
How do you see it, or do you think gaps have less significance in these 24/7 days?
Plenty of people trade the gap so its still valid. I don’t myself, but yes it often revisits.
tmpf – Been enjoying your posts over the days / weeks. Indeed nice GAP that and certainly worth taking notice of. I’d add more …but pushed as usual for time. I always reference the 5 min Bar at 8:55 on the DOW and S&P as anchor points. (e.g. 17950 – 17925 last night & would expect to see these prices at some point after midday) . Whoops – I’ve gone and said it now.
Cheers Hugh, thank Nick for putting up with me.
I’ll keep an eye at that.
Let’s see how the 20 day Bianca holds, short at 31
Took 10, expect a retry
does anyone expect another surge when the inevitable majority is declared
It’s done and dusted already isn’t it, with an absolute majority? Factored in, I’d say, by now.
The only thing that will disturb a quiet afternoon will be the Non Farms, and they’d have to be pretty bad to threaten 6980/90 imo.
But, as they used to say on the telly, anything can happen in the next half hour….
This looks a bit half hearted, the DOW can’t even break 18150 with those NFs.
Short again at Nick’s Bianca, 30.
Action replay took 10 again
I will think about shorting only at the end of the day. It may worth a go.
48 was a classic just now, overcooked rsi and an easy 15 points.
Any thoughts on a slide downward for the FTSE once the election over and We get into later part of May?
Is it NFP day or something? Why Dow flew up at 13.30? FTSE didn’t, but it was her elections. I wanted to have a rise at 14.30 so I came back to the screen and it was all finished for me. I wanted a dip and obviously a rise at 14.30
I don’t understand the reason why Dow is flourishing so much. What do they care about Conservatives?
Yes Jack, NFP day, they came in bang on estimate 223k, also bound to be a bit of knock on effect from FTSE and DAX both strong.
I honestly thought NFP was last week as it was 1st May 1st Friday, but probably that was delayed for another week. I just noticed Nick mentioned about NFP day, I was reading carelessly.
Honestly I expected that elections will make it all red on the market. How I was mistaken. Thankfully of no financial cost.
Jack. Are you on the same planet as me?
Lol Hello Argyle, long time no see, what’s the plan?
Took a 100 points on FTSE. As soon as exit poll said Tory went long. Bit busy doing press stuff today. Play off first leg tomorrow.
Glad that somebody thought the same.
Come on Argyle, your the wise one, can the Ftse hold this level over the next few weeks?
No. Looking to me sub 6700 within a week or two. Check back on Scottish independence result. FTSE and £ shot up and then spent 2 weeks falling.
I’d be looking for that gap to be filled next week once the election fever is over. (I think Nick’s down arrow today was a bit premature – but essentially right.) Today feels a bit like a repeat of last Friday, so maybe we try to hover around the 7000-7075 level on Monday and then down on Tuesday with Grexit/Brexit the catalyst again? The UK Stock Market Almanac made this observation on post-election performance:
“… in the month following a general election the UK stock market has historically had a negative average return.”
well spotted zigzagger, quite a handy book that. I’m looking for an entry point. Before close or wait till Monday? Hmmmm decisions decisions.
I like to wait and see what the after hours action is like. If it puts on 20-30 points above closing price that’s a reasonably good risk reward for a drop back on Monday morning. The risk is of missing out, but it’s better than going in too early with a short that’s below closing price. Patience …
The other clue for a possible down move / retrace is the very long wick on the weekly candle. (Need to see how it prints at 21.00) No guarantees but as the body of the candle is nearer the top of the range I’d favour a retrace – ie I don’t think it’s the start of an impulse thrust higher.
Not contradicting you ZZ, but that’s a Hanging Man and bullish according to theory.
See w/c 13th oct 14 and 12th Jan 15.
I just googled Hanging Man, never looked it up before, and most agree with you that it’s bearish lol.
All these years I’ve had it a*se about face…so that’s where I’ve been going wrong!
Good weekend to you all!
Looking forward to shorting at 7100 again next week 🙂
I don’t disagree, but look where those candles were in relation to the previous range – ie in the bottom half of the previous range therefore high likelihood of them being impulse candles thrusting us higher. I could be wrong and this could be the start of a march north into the 7200s. The candles I would compare it with are 27/4/15 and 4/11/13 at the top of a range. However, the body of it should print red to increase the chances of a retrace of the wick. At the moment it’s green so lessens the odds of a retrace, but that gap down to 6905-6886 is very tempting!
Classic Autochartist DOW signal just popped up
Buy @ 18175, target 18190 stop 17863.
Good thinking “let the market come to you” that’s my problem, can be a bit impulsive and not think things through.
It will be interesting to see if the election boost counters the slight downward drift since April 12. To do that it will need to persist and develop. FTSE 2hrs looks quite promising so far — ROC is holding up well and I shouldn’t rule out further acceleration — yet!
Left-click on link: http://i1348.photobucket.com/albums/p736/jmca01/FTSE%20100%20DFB_zpskwbgdqgb.png