Remain ahead just | 6282 support 6393 resistance FTSE 100 | Asia Rises

Support 6285 6282 6246 6212 6195
Resistance 6305 6317 6342 6393 6462

Good morning. Here we are, referendum day and its probably going to be choppy. Probably a good day to use the binaries for betting to limit the exposure to any whipsaw movements. Yesterday played out well with the rise from 6225 to 6300 and then a drop back. Was a bit hasty getting out of that late short but it looked quite strong at that point so the short looked like it would fail. But it dropped to 6255 before bouncing back and we are now above 6300 again as I write this. Mainly thanks to the latest bookie odds favouring Remain for the win.

US & Asia Overnight from Bloomberg

  • As polls diverge, bookmakers’ odds favor win for “Remain”
  • European currencies strengthen as oil gains boost ringgit

The pound climbed to this year’s high, the euro strengthened and Asian stocks rose, reflecting confidence that the U.K. will vote to remain a member of the European Union in Thursday’s referendum. Haven assets including the yen and sovereign bonds fell.

Sterling appreciated against all 31 major peers and European currencies accounted for all of the top four performers as bookmakers’ odds implied an 80 percent chance that Britain will stick with the EU, an outcome that polls suggest is far from certain. The MSCI Asia Pacific Index rose to a two-week high and S&P 500 futures rallied. Malaysia’s ringgit and the Mexican peso climbed as crude oil extended gains above $49 a barrel, brightening prospects for oil-exporting nations. Australian and U.S. government bonds declined.

Investors have been glued to the Brexit debate in recent weeks amid speculation a U.K. vote to leave the 28-nation bloc would fuel global instability and give oxygen to anti-establishment sentiment elsewhere. While bookmakers see only an outside chance of victory for the “Leave” campaign, three of four polls published Wednesday showed the contest was too close to call and the fourth showed a clear lead for “Remain.” A gauge of expected volatility in U.S. stocks jumped to its highest level since February ahead of the referendum.

“Markets seem to have almost entirely priced in a “Remain” vote win, meaning that the market moves and volatility around the vote may be far less than many had been expecting,” said Angus Nicholson, a Melbourne-based analyst at IG Ltd. “Nonetheless, markets are still incredibly nervous.”

Preliminary gauges of this month’s manufacturing activity in the U.S. and euro area are due Thursday, while American data on May’s new home sales and weekly jobless claims are also scheduled. Central banks in Norway and Ukraine have policy reviews, with the latter expected to lower its benchmark rate by a percentage point to 17 percent.

Currencies

The pound rose as high as $1.4844, its strongest level since Dec. 31. The Bloomberg British Pound Index, which tracks sterling against a basket of peers, gained 0.5 percent as of 1:39 p.m. Tokyo time.

The currency has strengthened more than 3 percent versus the dollar this week as speculation mounted that Britons will vote to stay in the EU. The chance of a Brexit, as determined by bookmakers’ odds, has fallen from more than 40 percent over the past week following the murder of a pro-EU lawmaker in the U.K.

“Even though it looks as though much of the ‘risk of Brexit’ has been priced out of markets, there remains plenty of scope for volatility on either outcome, albeit very much more on a ‘Leave’ than ‘Remain,’” Ray Attrill, global co-head of foreign-exchange strategy in Sydney at National Bank Australia Ltd., wrote in a note, citing polls that continue to suggest the two sides running “almost neck and neck.”

The euro strengthened 0.4 percent, while the Hungarian forint and Norwegian krone gained 0.6 percent. Mexico’s peso appreciated 0.5 percent and Malaysia’s ringgit led gains in Asia with a 0.3 percent advance. Taiwan’s dollar rose to its strongest level since August after overseas investors pumped $2.4 billion into the island’s stocks this month.

The yen slid 0.2 percent against the dollar and weakened for a fifth day versus the euro, its longest losing streak since March.

Stocks

The MSCI Asia Pacific Index added 0.5 percent, rising for the fourth time in a week as mining and consumer-discretionary stocks led gains. Japan’s Topix rose 0.8 percent as the yen’s retreat gave a lift to exporters, while benchmarks declined in China, South Korea and Taiwan.

“Anybody who is predicting this with a high degree of certainty is delusional,” Bill Fitzpatrick, portfolio manager at Manulife Asset Management, which oversees $325 billion in Lake Forest, Illinois, told Bloomberg Radio. “There’s plenty of room for risk assets to move higher, but I would wait.”

Sharp Corp. jumped as much as 8.8 percent in Tokyo after Japanese media reported that the company may cut jobs to reduce costs and will start shipping organic light-emitting diode, or OLED, panels next year. Fortescue Metals Group Ltd. climbed more than 5 percent in Sydney after the fourth-biggest iron-ore supplier said it will make a $500 million early repayment of a loan. Hyundai Merchant Marine Co. surged 29 percent in Seoul after South Korea’s second-biggest container line said it is in talks to join the world’s largest shipping alliance.Futures on the U.K.’s FTSE 100 Index were little changed, after the benchmark ended the last session at a two-week high. S&P 500 contracts added 0.5 percent.

Commodities

West Texas Intermediate crude added 0.7 percent to $49.45 a barrel after the U.S. reported the lowest weekly output since September 2014 and a decline in its inventories.

Gold traded near a two-week low, having retreated 2.5 percent over the last three days. Nickel and tin dropped 0.6 percent in London, while copper was little changed near a six-week high.

Bonds

Australia’s 10-year bonds fell for a fifth day, lifting their yield by three basis points to 2.25 percent. The rate on similar-maturity U.S. Treasuries increased by one basis point to 1.70 percent, after sliding to the lowest level since 2012 last week amid a slew of opinion polls that put the “Leave” camp in front in Britain’s EU membership vote. [Bloomberg]

FTSE 100 Outlook and Prediction

FTSE 100 Prediction
FTSE 100 Prediction

To be honest, its a complete gamble today. I presume that there will be exit polls which might give some clue as to the way the vote is going, but technical analysis is pretty redundant today. However, we do have support at the daily pivot 6282, and resistance to start with at 6317 but mostly it will be traders staying on the sidelines, or taking a position based on a guess of the likely result. Its fair to say that the majority have been betting on remain winning, hence the rise from 5900. All things being equal, I’ll probably go for a dip from 6317 to the pivot then a rise towards the top of the 10 day Bianca at 6393 for today but do please bear in mind that its sentiment driven (and poll driven). Today and tomorrow are good days to sit on your hands or go small stakes, or use binaries.

92 Comments

  1. Good call Nick.. But I didnt waited until 6282 L@93 out @ 22.. Cheers .. Bremains prevails..

  2. Morning all, lovely day for a referendum. Saw something in the paper this morning that made me giggle, according to one of the “Red braces” brigade if a vote for Brexit happens FTSE will fall 12-15% and remain a rise of 7%. With that in mind I have put sell limits in at 6500 and up, and buy limits at 5850 and down. If anyone wants a bet I’d have a fair few quid I see neither!
    Not as a guide to how I will vote but had a tiny punt at 3.1 on brexit.

  3. Morning guys, well, the Big Day.
    As I said on Monday, apart from my normal intraday RSI stuff (which hasn’t been too bad) I have been playing off the short side and shorted 275 and 300ish so far.
    Actually shorted ~300 three times and got tempted by the blue twice for +30’s, so current state of play is short two units, rolled up average of 6343 atm.
    I have further platform short orders of one unit each at 380 and 440 with notional stop around 520, a possible hit of 600ish unit points.

    My logic is “Sell the News” basically.
    Three scenarios that I see
    1) Clear Stay: further rally, then drifting sell off (also profit taking) because nothing’s changed from par price of 6000 for the last year.
    2) Very Close: confusion, political mayhem, indecision; volatile with downside bias reaching 6100’s.
    3) Leave: Algo inspired short term Amageddon to poss 5700 briefly.

    Scenario 1 is the danger to my cunning plan, although I don’t think there’s a lot of short in the market, we could run over 500 on covering and manipulation.
    Scenario 2 I would look for swings in the 6100/6400 range and trade it
    Scenario 3 I cover scale down from 5900, retire and move to Europe j/k

    Whatever happens with this particular bet/strategy, I think the relief rally of staying in will provide an excellent shorting opportunity.

    Expect reliable exit polls around our close I guess?
    GL all.
    🙂

    Lol, whilst compiling this tome, 380 short triggered and took +20. Every little helps.

    1. Nicely put tmfp and exactly what I think. That said, me being me, I’m more excited about scenario 3 and how many I can buy during the armageddon.
      Having read your piece I’ve dropped my scale up limits starting area to 6400, I haven’t got the b*lls to start at 6350 despite having written the other day that I would!
      Good luck all.

    1. Ironically, the British weather may be more important than just something to talk about.
      Conventional wisdom says higher the turnout, the more likely Remain becomes.
      Flash floods etc. may drop voting down the list of priorities for the callow youths who are said to be more likely to want to stay in.

    1. I’ve read elsewhere that there are a number of private exit polls being conducted by various hedge funds.

      It seems there is no rule that prevents the early information gleaned from this being used to make money.

  8. well i am out IG has increased the margins too much for me, so i will be sitting on my hands.
    Good luck all.
    Any idea when IG will revert to normal margins again?

    1. Lol, yeah nearly £5000 on £25, they’re determined that if anyone loses money it won’t be them….surprisingly only a 300 point guaranteed stop though, was 3,000! on Sunday.
      They will want to get back to normal asap, loosing lotsa business, I’d guess early next week depending on how clear cut it is.

  10. Looks like some of those private exit polls might not be too convincing…nearly 100 off the highs…not one for hindsight, but would like to still have that 380 🙁

  11. Afternoon to all you brave Market Musketeers…..I’m just passing by to see how rough the sea is and how big the waves are……It’s too wild for me…..im not happy with the margin requirement and the fact that the SB company’s seem to be able to change the margin % as they see fit…..talk about moving the goalposts? Im maintaining a watching brief from a distance ……for me discretion is the better part of valor….good luck all….see you on the flip side……

    1. When I went to vote I asked around various people and the number of people wanting to remain seemed to be much higher than the ones who wanted to leave..a lot of people wouldn’t comment either way…..like they were embarrassed by their choice…..

      2. It was the dog on a bit of string and the mad look in your eye that did that anstel 😉

        1. Yeah….plus the fact I hadn’t fed gnasher since he took a big chunk out of that poodles leg last time I took him to dog training….and that was two weeks ago…..he must be starvin by now and all those voters legs in shorts must look like Sunday dinner to a hungry dog :0)

  13. Right, off to vote, then back for a shower, put the champers on ice and job’s a good’un 🙂
    Later chaps!

  14. Well I’ve done my bit for British civilisation. Good luck to all those with positions at moment. Should be a real learning curve tonight and tomorrow. My guess is that it will rise when the results are out and the remain vote wins then over the next day or two a head back down to reality. I might also add that I’d prefer it to be the oppersite result. For me it’s not about the hear and now but the future could be brighter if we take this chance now. Otherwise more of the same.

    1. same here coombsy have voted out.. take a chance now or have britain looking like a ghetto in 15 years

  15. 20 point spread lol, taking no risks are they?
    87/90 binary for Remain….how high will it go?

  16. Well, I’ve got myself into a pickle again! I’m heavy short with a 18425 stop on DOW. Just keeps on going up!

    1. It might get a bit tight
      But if we get through the night
      There might be some light
      Otherwise we’re in the sh*te.
      🙂

      1. I’m not happy about the fact that it seems to be a done deal before the votes have even been counted. Stinks.

    1. Not this time – I’m short! Putting that aside though, this is fascinating to watch… P.S. Glad I’m not the only fool up at this hour.

      1. Also watching… Closed my Brexit option at 35 (sold at 91) so happy. Along with the possibility of leaving!!
        A few big results to come though. If we remain, cable is going to bounce 800pts.

      2. Lol I just woke up saw that first big drop down to 200 and put a little long on and the bastard dropped 250…should of stayed asleep still it’s not a big position and it could be back to 400 in 10 mins so I’m having a brew :0) great fun…:0)

        1. It’s not normal behaviour this…..scalping for 100s of points while everyone else is asleep lol….love it :0)

          1. Hey Si …..it’ll be 7000 soon…..sure you don’t want any toilet paper….I’ve got a twelve pack here with three untouched rolls :0)

        2. Anyone any ideas about Birmingham or Manchester ?
          London seems to be a remain winner.

          1. I don’t know inoodle….tell you one thing though…..I don’t think we will be coming out…

  23. Hello Fellas,
    I thought I will just say hi to night shift traders 🙂
    Shorted 6440 and limit triggered at 6000, Also bought some Long FTSE at 6120 just now limit 6400.
    Bought some IN binary at 45 so let’s see if we will stay in or out!
    GL guys and keep positions small for tonight!

    2. Cheers Rick..
      Awesome trade
      Tmfp must be seeing some blue (in his sleep!).

      Hahah my account couldn’t handle 20pp in this vol. doing very nicely on 2 lol

        2. said for last 2 weeks it would be a out vote… most people on here saying it would be a fixed vote…

          2. I can’t imagine tmfp sleeping through all the action….are you stealthily watching tmfp ? I bet you are you little tinker :0)

      2. I stayed up till midnight but couldn’t keep my eyes open, had a long hot day yesterday.
        Pleasant surprise this morning 🙂

        Just took +570 on half, wondering what to do about the rest.
        Nice problem to be wrestling with over the best cup of tea I’ve had for a long while. 🙂

        1. Hey that’s brilliant tmfp I’m really pleased for you….and you deserve it too buddy. You really do :0)

          1. It’s strange, even when I was watching that crazy period after the DOW shut and the 440 short triggered, I had no doubt that it would come good, even if we stayed in.

            Even making a profit on the holiday euros lol.

            So what do I do…stick with the game plan I think, so another 25% out for +596.

            I see you’re scaling down long anstel, well, there’s a surprise lol.
            Probably come good, but this isn’t knife catching, it’s Samurai sword swallowing.
            GL

          2. I love it tmfp …you are a star mate…..samurai sword swallowing..and collecting scrap in a war zone….oh man …you bring a big smile to my face GL….

  31. Down to a token 10% short remaining.
    Difficult to see how we will open but I would think something along the lines of 5500-6000 range for the morning session, I’ll probably trade off that, small stake and 200 point stops. Less is more tradingwise.
    There is the possibility of 5200 I reckon.

    1. Nice one tmfp, happy for ya!
      That should keep you in tea and biscuits for the year lol.
      I’m starting to fear shorting – wondering when to expect intervention of sorts.

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