Rates to stay lower longer, decent bounce 6208 resistance

Support 6124 6123 6111 6084 6080
Resistance 6181 6193 6208 6224 6248
Good morning. Turned into quite the V shaped day yesterday, with he recovery helped by Yellen later int he day. Was a bit early with he FTSE long at 6116, however the earlier short from 6150 did well. In one of her most detailed policy discussions this year, Yellen gave a clear message that interest rates will be raised at a cautious pace.Yellen also drove home the message that when officials don’t know, they either don’t change policy at all, or only move gradually.

US & Asia Overnight from Bloomberg

  • Fed chief signaled rates likely to stay lower for longer
  • Resurgent yen hits Tokyo shares; Malaysia adds to bull market

Asian stocks outside Japan surged and bonds climbed after Federal Reserve Chair Janet Yellen reasserted the central bank’s gradual approach to raising interest rates. Oil rallied as the dollar headed for its worst month in almost five years.

Shares from Kuala Lumpur to Seoul and Shanghai rallied after U.S. equities erased their losses for the year, with Yellen indicating deteriorating world growth warranted a slow approach to tightening monetary policy. The comments ignited gains in government debt as diminishing prospects for first-half U.S. rate increases had the Bloomberg Dollar Spot Index near a five-month low. Japanese stocks retreated amid a revival in the yen, while U.S. oil gained for the first time in five days. Nickel climbed as copper and gold retreated.

Traders reduced bets on a Fed rate increase next month to zero after Yellen dialed back some of the commentary made by other policy makers the past two weeks, emphasizing during her appearance at the Economic Club of New York that the central bank remains wary of raising rates amid threats to American growth from a slowing global economy. Financial markets have been hanging on the outlook for U.S. borrowing costs since the Fed reduced the expected pace of rate increases this year to two from four at its March gathering. Since then, some Fed officials had asserted that every meeting remains in play.

“For the first time in a long time, Janet Yellen speaks and markets go up,” Niv Dagan, executive director at Peak Asset Management LLC in Melbourne, said by e-mail. “It is clear that U.S. interest rates won’t rise any time soon.”

Stocks
The MSCI Asia Pacific excluding Japan Index climbed 1.3 percent as of 12:42 p.m. Tokyo time, rising for the first time in six days to snap its longest slump in more than a month. MSCI’s broader, dollar-denominated Asia Pacific gauge, which includes Japan, added 0.8 percent, even as the Topix index slid 0.7 percent in Tokyo. The regional benchmark has surged 8 percent in March, its best performance since October.

The yen, which often moves at odds with Japanese shares, climbed a second day, adding 0.2 percent to 112.49 per dollar after snapping a seven-day decline on Tuesday. The Japanese currency is headed for a 0.2 percent advance in March, after surging 7 percent in February. Japan’s Nikkei 225 Stock Average was down 0.5 percent, paring its advance this month to 6.2 percent.

The Shanghai Composite Index jumped 1.4 percent along with Hong Kong’s Hang Seng index gained 1.4 percent, while the Hang Seng China Enterprises gauge soared 2.1 percent.

Australia’s S&P/ASX 200 Index was up 0.1 percent. The Kospi index increased 0.3 percent.

Malaysia’s benchmark stock index, the FTSE Bursa Malaysia KLCI Index, rose 0.3 percent, extending the world’s longest bull-market run. The gauge has more than doubled from its 2008 lows without succumbing to a 20 percent drop.

Futures on the Standard & Poor’s 500 Index added 0.1 percent following a 0.9 percent jump in the U.S. benchmark that put it back at levels last seen at the end of 2015.

Yellen’s speech “painted a very dovish picture for the inflation outlook in 2016, and although she didn’t directly use this term, she clearly sees the U.S. economy as two-speed,” Evan Lucas, a markets strategist at IG Ltd. in Melbourne said in an e-mail to clients. “The yen now has to contend with negative rates not having the desired effect, the Bank of Japan assessing other unconventional monetary policy options and a U.S. central bank unlikely to raise rates.”

Currencies
As the yen extended gains, South Korea’s won paced a rally in Asian emerging-market currencies. Bloomberg’s dollar index held declines after sliding 0.8 percent last session. The gauge, which tracks the greenback against 10 major peers, has lost 3.4 percent in March, set for a second straight monthly drop.

The won surged 0.8 percent as the combination of the weaker dollar and crude oil’s rebound spurred a 1 percent gain for Malaysia’s ringgit. The Thai baht strengthened for the first time this week.

The Fed would act “cautiously” as it looks to raise rates against a backdrop of deteriorating global growth, Yellen said. Policy makers including St. Louis Fed President James Bullard and San Francisco Fed boss John Williams said last week that higher borrowing costs were possible as soon as next month.

“Yellen indicated that core Fed members take into account the global context more than regional officials,” said Etsuko Yamashita, chief economist at Sumitomo Mitsui Banking Corp. in New York. “A June rate hike would be difficult as global financial turmoil earlier this year affects the real economy with a time lag.”

Odds of a U.S. rate rise next month slipped to zero Tuesday, from 10 percent a week ago, while the probability of an increase at the Fed’s June meeting declined to 28 percent, from 46 percent a week earlier, according to futures trading tracked by Bloomberg.

Bonds
Australian government debt led the charge higher in Asia, with 10-year yields sliding seven basis points, or 0.07 percentage point, to 2.50 percent. Rates on similar maturity Korean bonds dropped two basis points to 1.80 percent, while yields on Japanese notes due in a decade declined one basis point to minus 0.1 percent.

Yields on 10-year Treasuries were little changed at 1.81 percent after they fell eight basis points last session. A bond-market gauge of inflation expectations rose Tuesday as investors bet on a faster pace of price increases.

Commodities
West Texas Intermediate crude snapped a four-day, 7.7 percent tumble to rise 0.7 percent Wednesday, to $38.55 a barrel. Brent crude gained 0.4 percent to $39.30. The weaker dollar makes crude and other commodities cheaper in other currencies.

Nickel for three-month delivery advanced 0.5 percent to $8,495 a metric ton on the London Metal Exchange, while copper retreated 0.2 percent to $4,883. Gold declined 0.6 percent to $1,234.96 an ounce in the spot market following a 1.7 percent jump last session. [Bloomberg]

FTSE 100 Outlook and Prediction

FTSE 100 Prediction
FTSE 100 Prediction

After a dovish Yellen yesterday the bulls might have a bit more fuel in the tank as they did manage to get it back above 6100 yesterday after the brief foray below. Still got 6200 as the line in the sand for the moment, but any weakness is likely to reach 6010 at some point soon. For today we have some initial support at 6124 which looks worthy of a long – daily pivot and the 30min coral at this level, as well as the Hull moving average on the 2 hour chart. So we might well see some upside towards the 6193 level which is the 200ema on the daily, and the 6208 10 day Bianca channel top. I have an initial rise to 6155 on the radar, with the 10min chart showing some resistance here. Just looking at the S&P, the bulls managed to defend the 2030 level (closed that long far too early in case Yellen’s speech talked it down). Below that then 2020 is the next support with 1990 below that. Bulls will be aiming for 2067. Anyway, FTSE plan is fairly simple with that 6125 long area looking decent.

There is also a 2.17 dividend today, which will affect open daily positions.

174 Comments

  1. Hello chaps.
    The expected early push seems to be running out of steam already at the mo, I’ve switched from BTD to STB, FTSE looks disinclined to spend any time over 90, despite best efforts of the DAX.
    Too early to call highs of the morning just yet, but how high does the DAX have to go to drag us over 200?
    Short currently at 88, hopefully a keeper for a drift to around 60 by noon.
    If you buy around here, how much upside is there?

      1. Hi Senu, I am expecting a trending day as well.
        Currently, short at 87 and will go long at 6150 / 60.

      2. Good shout Senu, I really don’t mind what it does, just so long as it does something.
        Have you got over dumping your DOW long? At the time I thought it was pretty poor r/r for an overnight hold, with hindsight it would have been good though. There’s always another… 🙂

        1. You were right Senu with your Dow analysis…..just it never seems to happen at the exact right time……GL

    2. Morning tmfp,
      DAX 200 EMA was at 9964 or something and now it’s pretty overbought on hourly chart.
      I think 10050 will be high for today or perhaps 10070 which might drag FTSE to just 6200 but I don’t think we will get there before DOW.
      6190 area is indeed looking a top for this morning here so I am short at 87 S6215 looking for 6150/60 before DOW.

      1. Yup, agree there.
        I’m splitting the day into two, 0700-1400, then 1400 onwards.
        Would like to see that 40 rsi on the 1 min get broken, that might start the ball rolling for a bit of sub 80 downside, but gone very quiet.
        Trading at the mo sort of reminds me of being back at school, Yellen is the old dragon of a teacher and we get to piss about when her back’s turned.

        1. LOL, let’s hope we get a bit of sell off to 60s 🙂
          I think I will start splitting the days into two as well cause after 1400 European indices are just a shadow of DOW.
          Yes 40 RSI (1min) is holding the game and then we have BTD going from 80-89 range.

  2. Looking at the 4 hr Dax chart it looks to me like 10100 is quite achieable especially if we get a buying spree into Dow open.

    1. 4hr chart on Dax and Ftse is nowhere near showing overbought yet but the Dow is showing a higher RSI …..I’m thinking even though the Dow is closed its the one too watch….

      1. lol, you and your closed markets…. do you go to the supermarket at 5 o’clock on Sunday afternoons too?

        1. The Dow is controlling the bloody lot in my opinion….open…closed….upside down…..doesn’t matter….we are all trading one thing……and it’s the sentiment the fed is putting out IMO…….it’s a computer game remember…..virtual reality lol!…….just my view tmfp but I’m just a newbie relatively.The b@llshit ometer is in happy mood today so all aboard…….good luck.

    2. Morning anstel, nice escape yesterday on the stop. 🙂
      Yes it could be, the two previous DAX bounces off 9800ish have both run out of steam in the high 00’s with similar rsi to now, maybe third time lucky but it would be getting pretty overbought.
      A spike to 200ish would be a good short or profit take I reckon, for an overbought pullback.

      1. Morning Tmfp…looking at all the SMAs on the Dow,the 50 is heading right toward the 200 on the daily….a golden cross senario it looks like but they don’t always seem to work lol! On the 4 hour Dow the 50 …100…200 are all lining up parallel which as I understand it is when the Big Money of the pension company’s etc join the party……My technical analysis is extremely agricultural as you know but it looks to me like a nice push higher……I opened the window this morning and I could even smell the BS…..I’ve been lucky to not get stopped on Dax but now it’s looking promising….I’m looking for a target of 10100 area…..and I can see Ftse back at 6216 soon too. Maybe even up to 30 at a spike….Good luck today.

    1. It’s broken its shallow trendline too, but we aren’t following. When/if the DAX bounces off 20 see how far it goes and what we do before jumping in I reckon.
      I don’t care what it does, anything rather than a 10 pt range for another hour..

      1. I know I was expecting FTSE to follow DAX and break the bloody 40 RSI but I can’t see that atm.

    1. Why don’t you open a small IG account, they’ve got all sorts of bells and whistles you can use?

      2. I think an IG account is in my future…..I’ve lent city a few pounds in the past though ,mainly last year when it all turned bad for me and I think I will hang around with them for a while till I get re-imbursed…..Rome wasn’t built in a day but didn’t take long for Pompeii to fall so softly softly catch a monkey :0)…….I’ve tried going at it like a bull in a china shop and it doesn’t work :0) good luck all.

        1. Just a couple of hundred quid dep would get you access to PRT and alerts.
          “I’ve lent city a few pounds” You’ve done what?

          1. What I mean is I’m still down from that Paris disaster when I learned how predatory the brokers are…so I’m kinda looking to slowly prise my funds back from where they disappeared too …..I was a bit niggled that they kept my position open even though I had no margin to cover it and they only closed me out and put me in debt when it was apparent the market was regaining its composure.I was a bit P@ssed off about that…..but it was a very good learning experience….good luck tmfp

          2. Oh yeah, if they’ve got your card details they won’t stop you just because your cash margin runs out.
            Good game 🙂

        2. If I do go to IG tmfp you can refer me,,,,,,,,it’s the least I can do for all the advice you have given me….but I’m happy here for now and I don’t have enough funds to open another meaningful account just yet…

          2. OK then Nick if I do change you can refer me….thanks for letting me use your site as well.its very informative,the little trading book download is very good as well….I wish I’d read it sooner……I also enjoy the dialog with the community on here and The knowledge that’s been shared is slowly sinking in….just wish I could pick it all up quicker but they say it takes between 2-4 yrs to be consistent …..it’s great when you are trading with just a computer for company as well to be able to interact with others and share what we have learnt or our views.If anyone is reading this and is thinking of joining Nicks Service or posting on here Download the free trading book…..it’s well worth the read……

          3. All yours tmfp. They got the hump about me referring more than 10 people?! Which is a bit odd as you would think that given all they spend on marketing, giving me £50 was small fry. Very odd

  6. Will it, won’t it, will it, won’t it…..who knows so short at 6200, stop at 15 looking for a drift to 75-80.

    1. Stopped at 15. Wasn’t watching or I would have sold them again! Sit and watch now, how far up can the Dow go?

    1. Morning WSF, full of the joys of spring here too. 🙂
      You got anything open? Getting a bit dear here, wadda you reckon?

      1. Ladies nickers I have spied…….hanging on the line outside…….I’ve even seen what goes inside…….when I’m cleaning windows………turned out nice again WSF lol! Morning:0)

        1. 🙂 Probably need a Certificate to work with Ladders nowadays,so I guess that career option is out too.Well done with the Dax and U.S Anstel.

          1. Thanks WSF , got out of Dow too early in retrospect but I’m thinking more what can I lose rather than what can I make……still running the Dax positions looking for 10100 maybe even more so I’m prepared to push more on the Dax now.

      2. Morning Maestro,I was all out at 9am and buying computers at 9.01. I’m Janet’s dream Citizen today.I took the free money and helped build the Consumer Economy.I even got a new backup Laptop,a Gamer thing with a 12 GB Ram that I wasnt planning to buy 🙂 Anyway coming back from that the charts look flat,so I’ll wait for confirmation either way 🙂 Only kidding I’ll buy the next dip,got German CPI and ADP Employment in a bit,so expect it will move.

        1. Great, now you can get one of those X Box controllers like anstel for millisecond buy/sell scalping.
          I have two dealing laptops set up, (IG only recently let you have more than one device logged in), the left one for buy and the right one for sell.
          I have to keep dusting the left one…. 🙁

          1. 🙂 You can probably use the left one for spares next year when the right one has used up all of its blue Pixels.

      1. I’m trading from my new office on the moon at the moment…….the air is getting thin but never mind BTD

  10. Wow, FTSE shoot up! Nearly reached that 6217 of 23rd of March. It’s the top of that level, but will it break higher and where would it go then? On a daily if it pushes I can only see 6325 of 29th of December. In regards to Dax, yes, I missed the morning long. Sleep sleep sleep.
    However Nick mentioned some short arrow, it must be from 6217 then.

    1. It wouldn’t surprise me you know……I do think it’s due a trip back down…….but not before NFP im thinking……

    1. Half out for +7, second long profit of the day, running the rest -5 (99) stop.
      Haven’t done too bad on the short side considering, taken 21 out of the 52 rise since 70.

      1. out for +8 on the balance, now 60 rsi has held twice it just might be a turning point for a couple of hours.

        1. See it’s a buy the dip scheme :0)……but aren’t you worried about the global slowdown…….we just have to buy it before everyone else does……….and preferable not more expensive like I’ve just done lol!

  21. the peeps in the US are almost awake i predict a further rise for the FTSE at 14.30, who is with me?

      1. It’s risky though,I think I may get out before the open just in case it drops……if it drops at open as they book profits I may then try and get get back in…… All a gamble really….GL

  22. Out for +2 just in case it dips for a better entry. If it jumps up at open its over to the Dax.

      1. I’ve been short on Dow for a change. It’s better if I was short on Dax instead. Nearly managed to escape but still lost not much like ten quid. Now I see I should have probably held a bit longer and wouldn’t have lost those but who knows would it would do: I didn’t have a good entry after all.

    1. Apologies it’s the 200 sma , colour was hard to see I’m running three charts on laptop screen 16 inch

  26. Hanging on to a short from 13, just has a flash of the DOW taking a tumble today, wishful thinking but……..

      2. Yeah, same here, it’s not very purist but the only cheap way to pick tops in this sort of scenario.

        1. It’s so boring as well today.
          I will go for a walk and will be back for dividend trade but I highly doubt it that we will have much movement considering it’s only 2.17 off from FTSE.

    2. added at 04 stop to 08 on all, working on the basis the Yanks will panic when they see a red candle, been a long time.

      2. Well, stopped on that but still plugging away on the short side into our close despite the little divi

          3. Nice one, atleast better than nothing – I was going to short DAX as there is some gap to fill but bloody missed it.
            Looking for a decent bounce to short after end of play.

          5. and more short at 08 paid divi so 06 and 14/12 short holding for a little while for 61’s after a little bounce for osold DOW

    1. Hey,been scalping the Dax,didnt fancy buying the Dow until its thought about what it’s doing,might reconsider at that 720 area if it bounces.Carney is reading his script tomorrow morning and Dudley gets a chance to be loyal tomorrow night,which might be interesting,ASX is back at 5050,so if this momentum keeps up there is at least 100 points there,doesnt seem right though,I’d rather see a retrace.Suspect everyone will end Thurs for a nice March number around where they are now.How was your day that 99.5 on the Dax must have been annoying.

      1. Hey..think I’ve been a bit over ambitious……waited for a push over 100 on Dax and it ran out of steam…….This Ftse puzzles me……maybe when the Dow gets to 20,000 we will get to 6250!…….I have this suspicion that the Ftse is going to jump up when we least expect it……me and my preconceived ideas …..still the notion won’t go away so I have a long on Ftse that’s going to give me a whopping 2. Whatever dividend tonight if it still refuses to make any real progress in an upwards vertical direction.Come on Ftse give us some love…….then you can throw a tantrum and revisit 5500 just so we don’t get too lulled into a false sense of security…..All part of the fun…….Think I’ve closed out + 2 points today….awesome :0)

        1. Mind you,,,,watched a nice video of an interview with Evangeline Lilly and Craig Ferguson…..beauty and brains an awesome combination……..

        2. Yes seen a bit today about Yellen giving a greenlight,but maybe with the Brexit stuff the same buyers arent keen on the FTSE,new tax year from the 6th April,I dont know.That 200,220 area has been there all month though,so a close above it for the end of the month could be a Carney breakfast goal.Anyone stopped out from 150 to 220 might have had the day off to look at it fresh tomorrow.

  31. As per tmfp’s comment miles up there, I think the Dow could see a bit of a drift. Again, the fly in the ointment is the amount of shorts out there. Anyway, just sold a bit at 6200 again.

    1. meant to say, hoping this won’t cost me another 15 points!
      For information, not that anyone probably cares(!) still looking at VIX position that is 2 points out of the money so these bears need to hurry up and close their positions so that the frighteners can be put back on.

      1. Yeah I have an underwater VIX too, it’ll be fine Ted 🙂
        I reckon the DOW could have a bit of a bath rather than a drift.

        1. Yep mate, but trying not to talk my book. Have stuck the 6200 short in ‘the bottom drawer’ too.

      1. Have a little faith baby,have a little faith it’s a lovely Dow and going to go up :0)……… Oddball out of Kelly’s Heroes….one of my favourite characters…..hang in there Senu :0)

        1. 🙂 yes,although that was a 15 min open all hours chart so probably more the round number that matters lol.

          1. Tell you what WSF this lots teasing us ……..Come on Dow go up already,and take the Ftse and Dax with you…..I’m starvin and it’s time for tea but I know if I take my eyes of this lot that’s when it’ll make its move….I can feel an authentic rally coming on……

          4. Might as well have a go I say…….but when I think about trades I placed when I started its scary knowing what I know now……for me now a small income and getting my heartbeats back to use as I please is more important than looking at Aston Martins…….mind you it’s still nice to know that with skill and disapline there is money to be made here……not easy though which is probably why most give up…..good luck WSF.

          5. Thanks,I thought some of that was pretty funny,but anyway we are free of 30 finally 🙂 lets see how far we can get hope this lifst the Dax for you overnight.

          6. That A50 is at the 9750 mark….so it could drop abit later,also I reckon a pullback so it has the chance to rise going into NFP on Friday…..thinking of taking some chips off for tonight ….not quite sure yet…

          7. Yes,I can imagine Thurs as higher than Fri,just for the end of month closing no.I’m looking at 15 min chart and thinking same thing now re,”always take the money”. 🙁

  35. Well, what to do….?
    Short just survived to the close, in the money at 200, do I wait for the morning….hmmm.

    1. Carney’s Press Conference is at 8 a.m tomorrow.
      “Mark Carney speaks: Thursday, 8:00. BOE Governor Mark Carney will speak about financial stability in Tokyo. He may talk about the Brexit debate in the UK and its possible effects on the UK and the Eurozone. Volatility can be expected. ”
      from forex crunch.

      1. Volatility from a Canadian in Japan lol. Unlikely combination.
        I don’t think he’s got the weight to be taken much notice of, much to his chagrin.
        I’ll stay short I think although a pop to 200 at the opening isn’t out of the question. In which case I may well sell some more.

          1. short is the way today 🙂
            Nice entry at 78 on the bounce won’t be surprised if thats the last time we see it.

          2. 🙂 Nice, once again.I’ve got nothing so far, just caught myself trying to count Waves on the Dax,so I’m sitting on my hands until German Unemployment has come and gone at 08.55.

  36. Made a b@lls of that last night through indecision….had the right idea but didn’t act…..the more times I get it wrong you think I would be nearer it finally clicking in my head….disappointed with myself a little but onward and upward…

          1. Don’t need no data,test for beta,trust the gut,and see you later…….lol love it……see how the green back stacks against the Big Mac…cheers WSF that’s put a big smile on my face……Right BTFD :0)

      2. Thanks tmfp…….yeah over and done with….back to ydays plan…could work between now and NFP…..it’s the process that’s not clicking in my head that’s niggling me…….time and time again I have made the same error…I’m hoping eventually something’s going to click and I will just react without indecision..if at first we don’t succeed try and try and try again……good luck buddy…

      1. Ta.
        Like it or not for a rabid bear, it seems to be finding a bit of support around here so out of the second bit of 66 for another 6 and half the 78 for 18
        Watching for a break of 60 rsi on the 1 min ~70 for confirm of base

        1. and over to today’s page. The sun is shining and the bulls will start sweating soon 🙂

Comments are closed.