Resistance 6728, 6747, 6775, support 6701 6682

Good morning, bit of a strange day yesterday – didn’t really do much all day staying in a very tight range (that 6711 short came good for a few in the end so well done those that held) and never managed to break the 6720 area, then fireworks later in the day with the stop to 6664 and rise back above 6711. The bottom of the 10 day Bianca channel is now only at 6881 so I expect that any dip today is likely to find support there, as generally speaking her trend is currently up.

A fairly flat day during market hours really – There is still a bit of worry over Ukraine though, as further sanctions were announced yesterday. We also have the Fed probably going to announce further tapering tomorrow so people waiting to see the outcome of that.

Asia Overnight from Bloomberg
Asian stocks swung between gains and losses as investors weighed corporate earnings and after U.S. equities advanced.

China Petroleum & Chemical Corp. slid 1.3 percent in Hong Kong after Asia’s biggest refiner posted first-quarter profit that missed analyst estimates. Newcrest Mining Ltd., Australia’s No. 1 gold producer, slipped 2.1 percent in Sydney as the price of the bullion headed for a second day of decline. Posco climbed 2.7 percent after the Korean Economic Daily said South Korea’s largest steelmaker is considering the sale of Daewoo International Corp.

Bianca
Bianca

The MSCI Asia Pacific excluding Japan Index fell 0.2 percent to 475.08 as of 11:16 a.m. in Hong Kong, reversing a gain of 0.1 percent. Major U.S. indexes recovered in the last hour of trading yesterday, paring losses sparked by the U.S. and European Union levying new sanctions against Russia, amid optimism over mergers and acquisitions. Pfizer Inc. added 4.2 percent after proposing to buy AstraZeneca Plc for about 58.8 billion pounds ($98.7 billion).

“When you see M&A activity, that’s enough to drive things a little bit higher as people try to anticipate the next deal,” Tim Schroeders, a Melbourne-based money manager who helps oversee $1 billion in equities at Pengana Capital Ltd., said by phone. “Take the M&A driver out of the market, investors are justifiably cautious. We’ve seen mixed results during this earnings season and the geopolitical situation, particularly in Ukraine, doesn’t seem to get any better.”

FOMC Meeting
The Federal Reserve will probably announce a fourth straight stimulus cut at the conclusion of a two-day meeting tomorrow, economists polled by Bloomberg say.

“It will take a lot to get the Fed to veer off on their current course,” Bruce McCain, Cleveland-based chief investment strategist at Key Private Bank, said on Bloomberg TV. “If we see some signs of inflation along the way, they might be worried but otherwise they’re content to stay the course that they have set and let it wind down gradually over the course of this year.”

U.S. Futures
Futures on the S&P 500 added 0.2 percent today. The U.S. benchmark measure closed 0.3 percent higher yesterday, erasing losses of as much as 0.7 percent.

The Obama administration turned up the slow boil of sanctions against Russia with little expectation that the latest round targeting officials and companies would prompt a turnabout by President Vladimir Putin.

The U.S. yesterday named seven individuals, including Igor Sechin, chief executive officer of oil giant OAO Rosneft, and 17 companies linked to Putin’s inner circle such as InvestCapitalBank and Volga Group. The European Union added 15 individuals to its sanctions list, though their identities weren’t immediately released.

FTSE Outlook

FTSE 100 Prediction
FTSE 100 Prediction

Well we got the dip and rise yesterday, just the dip went a little lower than the 6882 level I had pencilled in. Anyway, it certainly bounced! Resistance is still at 6720 and 6728 in the near term, then 6747 after that which is the top of the 20 day Bianca channel. I have put in a dip today and slightly bearish down to the bottom of the 10 day Bianca channel at 6681. The bulls will want to hold that level otherwise we will get 6656. Todays pivot is 6701 so a little bit of support there initially for the rise to the 6725ish area before a dip back. Presuming that the 6682 area hold then we should get a rise back as the FTSE does look like it wants to head higher on the longer timeframes, 6830 being the top of the 2 Raff channels at the moment and a likely area. To invalidate that it will need to dip below 6569 currently, which is the bottom of the 20 day Bianca channel.

So, for today, I’m thinking the pivot at 6701 will probably hold initially allowing the bulls to build a bit on that rise last night, then dip from the resistance areas at 6720/6728. If the bears manage to get it going then 6682 is likely to get hit, and if that holds then the bulls will be able to target 6786 in the next session or two.

92 Comments

    1. I’m short from 39 so stop at 6759, probably trend up now till lunch but looking for a drop this afternoon so going to hold out as it could be more points than the rise now till lunch. Suppose I could have sold and waited to short at lunch.

  9. Have to agree with Luke, I am looking to go short but looks like S&P will reach my 1884 level and hopefully reverse down echo would set up a near perfect Head & Shoulders, targeting 1700 over the next 2-3 weeks
    GG

    1. sorry john but we are going to get mixed up here you must be new here i have been posting here for the past year as john if you could try some other name because you are going to wreck my reputation thank you………….

  13. Hash, do you agree with a final leg up forming a the shoulder in the S&P at 1884, setting up a move down to 1700? I am long like you in the Dow at 16350ish but feel this is setting up for a big move down
    GG

    2. GG – i dont see the H&S but i do see major resistance at where we are now…my indicator still saying bull on it though – it doesnt change until the market has moved enough

  14. Hi Muan

    I’m looking at the S&P on the daily and if the right shoulder is moulded around 1884 by next Wednesday / Thursday it looks to me like the H&S could be in place with the seasonal “sell in May, go away” as a possible headwind.
    GG

  15. Got a few shorts on DAX 9550 region , waiting for 9600 to add some more. Interesting to see where the DOW takes us today. Looking into tomorrow for a rise and dip scenario with figures out.

  16. Ok so feel that now I might have a short… Dax 9560 stops 9600 ftse 6747 stops 6800…. Closed the aus200 this morning for a tidy 70 points.

    1. think it’s getting toppy at the moment. 6780 would be my guess before the sharp(ish) descent.

      not sure it has the legs for 6800. also think we will see a bit of a sell off in US this afternoon. nothing major but will talke 30+ points off ftse.

    1. dont think anybody can give you a concrete answer why. big jump yesterday intraday and ukraine getting nervous again.

  25. been long at 6682 from yesterdays dip and still holding- hoping for a dip towards the 6725 area to add another. fed decision on thurs certain to cause some movements and given that alot of clients are short on dow could (but obviously not certain) push dow further up perhaps until wedz evening. we’ll see wat happens. good luck guys

  26. since many are expecting ‘sell in may’ and with a lacklustre response to the results season looks like it would be ‘buy in may’ and play…….

      1. yes got revised up and current is down, meaning should lead to stablize/drop. if todays value was better than the revised then yes it would shoot up

  33. Closed my long in the Dow from 16350…..not implying it’s going down but it feels a bit jittery here, must have vertigo again!

    GG

    1. Yes! I don’t quite have the signal yet, but I think 1900 could be ‘on’.

      Incidentally, ‘Jim’ (me) is a different person from the new ‘jim’, who eschews the upper case. That is distinction enough I suppose.

  39. I’m selling and going away for 3 months tomorrow. Ok not just selling but shorting…..and not quite going away…..in a few years time perhaps I could afford not to have to be in the UK for months….that’s the dream anyway.

  40. Thanks Jim
    Just following my model like a robot! Effectively March and April have been a write off. We were higher in Feb than we are now…..but had to hold to follow the strategy. Happy overall with the 250 points in 3 months. I’m sure it’s insignificant compared to some here though.

    2. ah man 250 points is bloody amazing considering how the markets have been behaving..
      but i have total different views compared to what u are saying..
      im looking at this as a start of a new bull market :S… i cant say how long, maybe till tomorrow, who knows.
      but lets see maybe in a couple days my strategy will fire off a short signal too 🙂

  41. havent been posting here today but looking at postings see another john which i would say is not me ……..quick look cant see much stoping dow or ftse moving higher prob 16590 think ftse only wating until it gets there

  42. GG/ Senu yes still holding my shorts looking for 6450/75 if it comes off if it does not and keeps climbing my stop is at 6800.

  43. Sam. Sure will do. Apologies so sorry have been tied up at work…..and cant post from there and thought you might not be interested anymore.
    Post your email address and promise to mail you by the weekend

  44. Thanks Hashmash…..we shall see….the market has made fools out of all us at some time. So can’t say I say the market is going down with any sense of confidence. I do still see the market carrying on the current bullishness for probably a couple weeks upto 6900.
    GLA.

  47. Morning Belly yup still holding, not put any trades in this morning as I have 3 running from yesterday. Hoping we get a bounce off 6772

  55. Belly this is a risky strategy I am playing here based purely on a pattern I see that could come off on the 4 hr chart. if it does not I will stopped out and be back to trading price action on a daily view

  57. I went long earliar .. The pundits are saying up to 6850 . I’m still learning but starting to do the opposite of what ig shows on their client base and it seems to be working.

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