Resistance at 6635 today? Nearing the top of daily channels

Good morning, for a while yesterday it didn’t look like the bulls were going to play the game with the rise to 6600, however, it took till late afternoon for them to wake up. We even have a high so far of 6620 (including spread) which was the level I mentioned the other day. At least the Americans are happy with the final resolution for the moment with the S&P making all time highs, and remained buoyant overnight with decent Chinese data – a GDP figure of 7.8%. We are also in earnings season and Google had decent results, also contributing to the rise.

Bianca Trends
Bianca Trends

Asia Overnight from Bloomberg

Asian stocks rose, pushing the benchmark index to a five-month high, and emerging-market currencies gained with copper after China’s economic growth quickened. U.S. equity-index futures climbed as Google Inc. sales topped estimates.

The MSCI Asia Pacific Index added 0.2 percent to at 1:48 p.m. in Tokyo as Australian stocks headed for the highest close in five years. Standard & Poor’s 500 Index (SPX) futures added 0.2 percent after the measure closed at a record high in New York. South Korea’s won reached the strongest in nine months as the Chinese yuan rose to a 20-year high. Copper futures in London climbed 0.2 percent, extending biggest weekly gain in a month.

China’s gross domestic product expanded 7.8 percent last quarter, official data showed today, matching the median estimate in a Bloomberg News survey of economists and halting a two-quarter slowdown. Federal Reserve Bank of Chicago President Charles Evans said yesterday the U.S. shouldn’t reduce stimulus after some reports stopped during a 16-day government shutdown.

“China’s economic growth is stabilizing and that added more confidence into markets going into next year,” said Caroline Maurer, a Singapore-based fund manager at Henderson Global Investors, which oversees $110 billion of assets. “We are also likely to see some impact to the U.S. fourth-quarter data because of the shutdown, which could mean any Fed tapering is likely to be put off a bit later.”

Company Earnings

Gains in the S&P 500 futures suggest the gauge will add to yesterday’s 0.7 percent rally. President Barack Obama signed a bill yesterday to reopen the government through Jan. 15 and extend its borrowing authority to Feb. 7 next year.

General Electric Co., Honeywell International Inc. and Morgan Stanley are among 18 S&P-listed companies scheduled to report earnings today. Google rose 8.2 percent in after-hours trading in New York after third-quarter sales exceeded analysts’ estimate. Among 87 companies that have reported quarterly results so far, 72 percent exceeded profit estimates while 57 percent beat sales projections.

FTSE Outlook

FTSE 100 prediction
FTSE 100 prediction

Both the daily trends are up and with the daily pivot at 6560 we could find support there on any initial dips. It certainly did well reaching 6600 yesterday and even a little further. However, we are testing the top of the Bianca channels with the 50 day at 6638, and slightly above the 20 day still which is at 6603. I expect some pause for thought at 6635. We have a decent looking channel on the 30 minute chart which was tested twice yesterday, though out of hours, so should still be relevant for today. If that 6635 level breaks then it looks like the next area of interest will be 6694. I am going to try a short at 6635 but will keep the stop tights, mainly as its Friday and could do anything. We might also see some profit taking later on going into the weekend.

59 Comments

  7. FTSE above todays resistance from yesterday, hopefully it will run to Nicks 6635 target before 4pm ( time to sell )

  13. Going long @6507, I suspect when US comes online, all that positive data will have an immediate impact on DOWs open

  15. Hi all,

    I’ve been following you all and Nick for a week now running dummy trades. Not done too bad so far, but still a lot to learn. Hope to continue learning further…

    Some questions I have:

    What platforms are you all using?

    and what ftse index are you trading on? as some of you quote figures at 6500 and others 6600 ?

    thanks for any pointers…

    1. Hello

      I use Intertrader and IG as my brokers. Intertrader link is on the right of this page.

      I trade the FTSE DFB mostly, though sometimes the futures contracts, just as a FTSE DECEMBER if planning to hold for a few weeks.

  17. DOW just took out all those going long before it went bullish. Reckon it will go for 15500 with all today’s positive data coupled with China’s good numbers

    1. I see Dow going to 15400 and beyond. I am long Dow and moved my position to break even. my target is 15440 on the Dow.

  29. Been busy today and trying not to monitor my positions so frequently. Just wanted to say that agree with Nick here. As previously mentioned I believe we will head towards 6635 – 6650 and then next week and onwards to November’s FOMC meeting we will probably dip back to 6550. That will be a good buying opportunity for the final assault on 6700-6800 at year end.

  32. I’m currrently long from 6510 stop now moved to 6537 target was 6650 but might reeval that towards 6750 given strength this week

    1. Good place to imo. You don’t need a long stop and the Volatility chart is at a place where you would expect it to rise from.
      GL

  34. Good week collected 60 points off the DOW with another 18 on the Ftse, next week should show some decline, a breather before fed meeting, and I guess the fact that the money lost during shutdown will have an effect?

  35. If we suspend our worries about the sanity of US lawmakers, and the inevitable finiteness of market-boosting monetary policies, perhaps the most obvious scenarios are that the Dow and FTSE build on recovery patterns observable now, the Dow heading for c15800 and the FTSE for c6800 in the near term. These values represent no more than the respective upper bounds of 2xstandard deviation channels between 1 May 2013 and the present. Both channels are approximately horizontal, so the series have fluctuated around central values without exhibiting any real growth over the period, despite huge stimulus being applied, in the case of the USA especially.

    Dow
    http://img833.imageshack.us/img833/1476/e1iq.png
    FTSE
    http://img707.imageshack.us/img707/1637/fgar.png

    So, the foundations of recovery might appear shaky; based on these few considerations at least. I am on the lookout for gravity-defying shares! 🙂

  36. I wouldn’t even think about shorting the Dow until 15500, there’s quite a lot of previous resistance at this level. In any case markets are running away bullish right now, I just don’t understand this fixation with shorting. Being a spread bettor allows us to profit whatever way the market goes!

  39. Personally I don’t. The FTSE looked solid all of last week and I thin further rises are on the cards. Of course that all depends on how the NFP but I will be buying dips until further notice after.

    1. I would love an explanation my order got triggered and stopped in less than 5 minutes…what a way to start the week

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