Good morning, bulls were fuelled yesterday with the hope of Obama announcing some sort of deal in the afternoon, only for the meeting with Congressional leaders to be delayed, to give Senate more time to thrash out agreement. With the US markets closed yesterday for Columbus day, the futures prices still rose pretty well. Didn’t help my trade levels though as despite the longs from 6480 working fine, the short at 6509 got stopped out! Of course the markets are hoping for a deal and are pricing in a last minute deal as per usual hence we haven’t seen anything majorly bearish yet. As expected though, its all eyes this week on the US and the debt situation as the 17th draws closer, certainly not a week for the faint hearted to be trading!
Asia Overnight from Bloomberg
Asian stocks rose, with the regional index heading for a five-month high, as Senate leaders said they’re optimistic they will forge a deal to reopen the U.S. government and avoid a breach of the debt limit this week.
The MSCI Asia Pacific Index gained 0.4 percent to 141.45 as of 1:16 p.m. in Tokyo, with about five shares rising for every three that fell. Senate Majority Leader Harry Reid said “tremendous progress” had been made, though “we are not there yet.” Leaders are working on an deal to suspend the debt ceiling through Feb. 7 and fund the government through Jan. 15, a person familiar with the talks said, speaking on the condition of anonymity.
“It looks like the door is now open for compromise,” Nader Naeimi, Sydney-based head of dynamic asset allocation at AMP Capital Investors Ltd., which manages about $130 billion, told Bloomberg TV. “The deadline is nearing and we’ll get through that. The volatility caused by this debt-ceiling debate will be with us until next year.”
US Futures
S&P 500 Index (SPX) futures added 0.1 percent today. The gauge rose 0.4 percent yesterday amid signs lawmakers may reach a deal before the government loses its ability to borrow money.
President Barack Obama postponed a meeting with congressional leaders to give lawmakers more time to reach an agreement. Senate Minority Leader, Republican Mitch McConnell, said he shares Reid’s optimism after talks in Washington.
Senate Delays
The possible deal could face procedural delays in the Senate and an uncertain path in the Republican-controlled House of Representatives, where Speaker John Boehner would have to decide whether to allow a vote or make changes. Should Congress fail to act, the U.S. government would run out of borrowing authority in two days and start missing debt payments sometime between Oct. 22 and Oct. 31, according to the Congressional Budget Office.
“It’s positive to see that they’re negotiating and trying to come out with some form of a deal,” said Timothy Radford, a Sydney-based strategist at brokerage Rivkin Securities. “We should probably get some deal by Thursday. That should provide some buying support for the market.”
FTSE Outlook
I have put a somewhat bullish scenario above for the Dax (members only), however, the FTSE is testing the top of the 20 day Raff at the moment, and having hit the bottom as recently as the 8th October at 6310 and fully crossed that Raff channel I am not sure that the FTSE will keep climbing. We are also above the Bianca channels though hovering around the top of the 10 day at 6541. Markets are pricing in a deal that’s favourable and will no doubt be relieved to actually get something sorted. Markets hate uncertainty as they say. Today’s pivot is 6493 so I expect any dip to find support there as the momentum is with the bulls at the moment. if that pivot level does break then that will certainly temper this current rise. Whilst the momentum is with the bulls I expect we will get the 6600 level soon, especially if a favourable deal is announced soon.
Nick,
Your assessment today contradicts itself. First you don’t expect FTSE to climb and then you say that the momentum is with bulls and you expect to see 6600.Which one is it then?? 🙂
You defined the word “contradiction” in your report.
Will it be pull back or not?
I think Adam you need Nick’s post properly or go elsewhere
Just to clarify, for today i don’t think much higher than the 6560/70 ProTrend resistance area (and also the daily Raffs, Bianca channel tops), but I don’t think it will be long before we hit 6600 but a slightly longer time frame for that.
Here are the Raff channels – you can see we are testing the upper confines of the green 20 day
http://td.md.it-finance.com/ProRealTime_V10/display_chartimage.phtml?name=6mxbu1fy8s0c3mpwmye0w3pxz&type=png
Jesus, where the hell it is going?
Sooner or later the markets have to ask whether relief justifies a rally! 😉
Anyone know why the Dax is so strong today
http://img94.imageshack.us/img94/4585/394s.png
Unlike some!
🙂
Thanks for that Jim… Have been shorting the Dax and buying the Ftse talk about getting it the wrong way round!! :-((
Oops! All the best Luke
Thanks Jim
Gutted today, on the day like this to lose 18.9 points is not exactly the happiest day of my life. First I shorted at 9.20 instead of going long and that was it really, all the rest of the day I was trying to add up to close this stupid short, it was daunting experience. In the end I still ended up with the loss cos I took other trades after the short was closed with that loss of 60 quid. Gosh, waiting for it to drop or rise 5-6 points is so annoying. I only managed to win 2-3 points after that but the wager was huge. At some point I thought I will lose the whole account and I didn’t care, the stake was too high that I had only 40 quid available for trading. Gone completely mad on that £15 pp bet, had £10 pp, £5pp bets where my usual is £3. Once I lost 95 quid then won 115 quid. Well, still ended up the day with the loss of 56 quid which I consider a blessing as I thought I will lose the account. Sad sad sad.
Don’t know what comes on me sometimes.
does anyone think we’ll see 6500 tonight?
What is a spike at 9.30 from 6528 to 6542. End of short I suppose.
Do any of you trade Asian hours. Just picked up 98 points long of the dow
Welcome to the site, could you share your strategy that helps you make 98 points? 🙂 Appreciated.
I don’t trade Asian hours although I do trade the Hang Seng and STI. I’m not a day trader though.
Nice to have a female, presumably, on here. Was wondering if trading is still largely the preserve of the boys……..particularly given then make up of this board.
What’s the forecast for today?
Sideways movement in anticipation of tomorrow
What is tomorrow?
D day for the debt ceiling.
It’s good then, it will be more volatile. At the moment it’s going nowhere. I am thinking of taking a long from 6510-13 area if it gets there but not sure if it’s a sensible idea. So far 1 trade today b/e closed long from 6523.8 just now. Any ideas?
I’m not a day trader. My personal view is that we will be around 6700 at the year end. So I would be looking to buy and hold at current levels. Also it would seem inevitable that some kind of last minute deal will be made. Has to – as the consequences of not reaching an agreement don’t bear thinking about. With that in mind we are looking for a relief rally to 6650 tomorrow. I would therefore look to buy short term as well.
Just an opinion though.
Good luck!
Thanks, Javed. Long is my overall idea whilst we are in a long trend. The shorts are weak so it could a push up to that 6650 area.
I went long on FTSE @ 6560 last night and shorted DAX @ 8860 at the same time.
Yesterdays low was taken out on the FTSE, so technically its now in daily downtrend. With what’s happening across the pond, anything can happen…