Push to 6800 still possible? 6775 resistance though.

Good morning. Well NFP certainly provided some movement on Friday. Well done to those of you that shorted at 6764 as per the trade plan. I didn’t SMS it as I didn’t take that trade in the end but I know some of you did, and with the stop at 6785 it netted quite a few points on the drop back to 6730. If you are still holding then the stop at breakeven now should be good, though there is a possible rise to 6777 today. That said, the top of the Bianca 10 day channel for today is only 6753, so pretty much the area we are looking at opening. Prices soon bounced back after the NFP as slowing jobs growth might mean slower tapering (and there is always the possibility they have shot their bolt too early tapering last month and might even need to ramp it up). The data is still mixed really in my opinion – a recovery is certainly not a sure fire thing, not in the States and not in the UK (and even elsewhere).

Bianca Trends
Bianca Trends

Asia Overnight from Bloomberg

Asian stocks rose after slower growth in U.S. payrolls eased concern the Federal Reserve will accelerate cuts to stimulus.

The MSCI Asia Pacific excluding Japan Index rose 0.6 percent to 459.77 as of 1:22 p.m. in Hong Kong, with all 10 industry groups gaining. Markets in Japan are closed for a holiday today. U.S. employers hired 74,000 workers in December, the weakest growth since January 2011, indicating a pause in the recent strength of the labor market that may partly reflect the effects of bad weather.

“Equities markets liked the payrolls report because it means the pace of tapering could possibly be a bit slower than expected,” Keith Poore, head of investment strategy at AMP Capital Investors Ltd. in Wellington, which manages about $130 billion, said by phone. “Tapering will continue if economic growth pans out as we are expecting, which is for a gradual improvement. The economy is going to improve and ultimately that is going to be good for growth assets like equities.”

U.S. Futures

Futures on the S&P 500 slipped 0.2 percent today after the gauge climbed 0.6 percent last week. Three rounds of monetary stimulus from the Fed helped push the S&P 500 Index 172 percent higher through Jan. 10 from a 12-year low in 2009.

The U.S. jobless rate unexpectedly fell last month, dropping to 6.7 percent from 7 percent, the Jan. 10 payrolls report showed. Economists surveyed by Bloomberg had predicted the rate would be unchanged in December.

The Fed announced in December a $10 billion cut to monthly asset purchases amid signs of recovery in the U.S. job market. Policy makers will trim stimulus in $10 billion increments over the next seven Fed meetings before ending them in December, according to a Bloomberg survey of economists Dec. 19.

FTSE 100 Prediction
FTSE 100 Prediction

FTSE Outlook

We have a narrowing 10 day Bianca channel presently which usually means we can expect a breakout from that channel soon. after testing that 6770 area on Friday prices have stayed below so things could possibly experience a bit of a dip back, and we fail to reach the 6850/950 as per the weekly chart before a more significant dip. That said, a rise above 6770 today could well see 6800/6810 where we have the top of the 10 day Raff, which has also levelled off after the past few sessions showing a weakening rising trend since the climb of 6400 last month.

I have put a couple of shorts off the resistance levels below as the trade plan, and a long off the pivot if there is an initial drop (the 200ema on the 30 minute is also around this 6730 area). With the bounce back on Friday after hitting that level I think we could see an initial push higher towards the 6770 area, possibly even 6800. The latter looks interesting as we have the even longer term 50 day Bianca channel at 6804 but also the 10 day Raff at 6801.

147 Comments

  2. Looking at symmetrical triangle in lower timeframes for tday. Which side will break ?

  4. Pms good financial results from US should propel us up before we brea back down. Ftse looks strong but those 2 shooting stars in the Dow weekly tell me a pull back is coming before the big move up

  5. Marco I agree. Rally through earnings then a slow grind down. Too scared to go long though. May wait until we get above 6800 to build shorts

  9. Holding a short from 6753
    Shorted on friday and closed that as per nicks recommendation and my personal opinion.
    Looking for 30 pips before longs at 6720 or lower.

    1. It was tough to call. I didn’t even drop to the 30ish for a double test. Hate when it does like that.

          1. Not really, I like when it starts waving rather than going on the straight line. I know it reached 30 but touched it only once. How am I supposed to know that that’s the top?

    1. It’s very hard to call, agreed. Combined with 100 day ema @ 6734 I’ve gone for a long now to get to 6760, with my stop just 8 points below 6734, will wait and see….

      1. Yep, I should have taken the low 6729.5 on Friday 13.30 as my guidance as it bounced off it, but never mind. There will be other trades.

        1. Exactly, and if you aren’t sure there’s no point messin’. So you did the right thing. I’m still unconvinced by this move up, moved my stop to break even basically.

        1. Thanks, fortunate today I think! Tomorrow will wait for the next trade, I don’t like to get greedy and try to catch lots of trades in one day, I prefer to make one calculated move for a day, and if I lose I lose, tomorrow is a new day and a new trade.

          1. Although VERY tempted to switch to short now, but won’t! Will just hold tight and see what happens on US open.

    1. Made no posts on Friday, first time today! Maybe used the same name as someone else….For what it’s worth, as per Nicks chart above..I think we will drift below 6734 and stay there now, for how long I do not know. That’s just my hunch.

      1. oh. is this someone else then?

        Jim says:
        January 10, 2014 at 7:52 pm
        Sorry for delay – VGL! FTSE just beginning to look peaky now @ 6755.

  24. Glad I managed to bail in the short from last week with a tiny profit. Showing a nice profit on Dow now in at 16410 and will close at 510

  26. targets hit for dow and ftse going ok so far…if ftse fails to break 6776, might be considering to start loading up shorts..possibly

  27. Couldn’t reply to your message for some reason Jim, won’t show me the reply option after a few replies. No problem! sorry for the confusion, Jim_D! 😀

  31. Senu — We did get a run down to 6730 this morning, since when the FTSE has revived a little, as you were pointing out I think! Truth is we’re still flatlining in a narrow ϵ-channel of about 70 points wide, running from last December 27. No real direction at all since then. I’d like to see a positive breakout, but there’s damn all to go on.

    2. yes i agree with that, hence why i cant get any trades in!
      I need a bit more of a move before i find a point to trade..right now to me its bullish…

      1. bet there are charts that show bulls as well…dont really believe TOO MUCH in pure chart trading

  33. Looking for a tiny drop in market, assuming my strategy still bullish im going long with moderate risk, and aiming for 6850-6900 atleast.
    These days the vol has been ridiculous.

  34. 6760 and higher is an area to short.
    Im bearish at the moment.
    Sold a short earlier, opened another a few mins back.

  35. And definitely agree with you hashmash, and jim.
    Alot of intraday volatility, my biggest winnings yet got closed on the 27th, and since then its been 6770 and below, seems to be some big resistance around there. But no prolonged direction since that day.

  36. i have a view that the ftse and dow will slightly realign to a easier to read correlation , with that i have placed a long order on dow at 16350 and a short order on ftse at 6780 looking for 50 pips on dow and 60 pips on ftse

    my correlation would be 16400 dow 6725 on ftse , ftse at min not moving with dow , as before xmas it was reverse of what we see now ftse hardly moved dow went as of now dow not moving ftse pretty strong

  37. Missed that one, because 6751,5 was reached at closing (volatility increased). Do not trade at those hours

    1. You were anticipating a negative breakout I think, which didn’t happen! Do you have a s/l in place? There is a chance that the index will head back for the lower boundary of the current 4-hr channel, currently around 6705, which would reduce losses at least. GL!

      1. Yeh, I do have a limit in at 6660 but no stop, but I do feel that it will drop by the ned of the week looking at the daily MACD histogram

  39. I want ftse to drop a bit, while more volume goes to sell…for now that be a perfect indication for me to BUY!
    Before we see 6900 there should be a drop.
    and that drop is what im waiting for.

      1. yup then i was bearish lol..caught a nice 40 points on the way down… got lucky i managed to close at 6688 🙂

      1. Yeah, a 200 points up is a good swing 😀
        But we may see that this week as SPX needs a pullback to 1813+-

  44. Wrong side for me! Can’t win them all I guess. Will try to ride it out. 16400 a great base!!! Ha!

  47. S&P for me has become a good bull market to follow and look for buying opportunities…i might take a stab at it.

  50. X2 just put the kids to bed and switched on to see Dow collapse. I am not surprised even though I thought it might hold on till middle of the week. The 2 weekly shooting stars had signalled a pullback was coming, if was just hard trying to work out how it would tie in with FTSE as that was still very bullish and rejecting any movement down below 700. The trend is still up on both so pullback is a buying opertunity see how low it goes before Jp Morgan tomorrow. Looks like it wants to do the drop in one go so its all done and dusted ready for heavy wait financials this week.

  52. indicator moved alot fking AGAIN!. not looking good for long…showing we gona be stuck in this range…unless a breakout happens soon, hate trading breakouts!

  53. Huh. – chuckling to myself. Been bearish for a week or so now but decided to close my short when it dipped at close, given Friday/today’s strength All of a sudden it’s sold off – still can’t complain as my share holdings have done really well so far this year. Still in this dam 6700-6770 range – must come out of it soon. Still bearish but will take care tomorrow as knowing my luck we will go back to 6760!

  60. So nicks prediction for today was very good. Just pity the sell off came after normal market closure

  62. Just gone long at 16268 with a tight stop, this is manufactured ready for the big push up tomorrow on Jp Morgan results

  65. Didn’t see this coming when I closed my ftse short 14 hours ago! The pain!!! Hoping for a big reversal tomorrow. Hope!

  66. Continuing to sell off at the close. Worrying and after all the latest ‘triggering’ events and news who could have predicted such an aggressive sell off

  70. Dow has not really had a good bpunce yet which after a drop of that magnitude is worrying as it could drop drop further to the 16170 region

  72. Showed that my 6760 short was bang on
    Good trading day.
    Will close and now looking for another short at 6760ish or long at 6690-6700.

  73. Going to close my Dow long at 16268 as looks like a further 100 point drop on the way to 16170 if that goes its 16000

  74. Marco I’m holding on. Earnings will be good this week. I expected a drop in the next few weeks but after we had posted good gains through earnings. My short was right on Friday night but should have held.

  75. X2 yup should have held that short agree earnings are going to be good just think it will drop some more so will get in lower for ride up .

  80. .. and it’s not happening at the moment.

    FTSE is still 40 odd above the 50 DMA so this is not exactly much of a drop at the moment.

  83. I’m a bit surprised how strong the FTSE is given the sell off stateside, I suspect we haven’t done with the selling.

  84. I see another low in SPX, before a reverse for new highs.
    So not trusting at all in these bounce

    1. Concerning FTSE it has done is homework, closing a prior gap, but I suspect will leave today a new gap to be close in future but not today.

  85. Only if SPX holds today and gives a reverse candle, I will regain my trust in FTSE

Comments are closed.