Rise and Dip | FTSE 100 resistance 7030 7065 | Support 6950 | Asia climbed

FTSE 100 Support 6955 6939 6914 6911 6837
FTSE 100 Resistance 7014 7017 7035 7042

Good morning. The FTSE 100 was pretty strong yesterday (as expected for the start of the month and quarter) with the rise to the 6969 resistance level from the open, and then a bit more. Unfortunately we never got the little dip to start the day down to the support, instead 6900 held well and we rose to almost 7000. Unfortunate for the bulls that the bears suppered their charge at 6995 (twice!). Its distinctly possible that we pop a bit higher as there are probably a few more shorts that need to be squeezed and stopped out, resistance is around the 7017 and 7035 areas at the moment. Support for today is around 6939.

US & Asia Overnight from Bloomberg

The dollar strengthened for a sixth day versus the yen and sovereign bonds fell as American manufacturing data and hawkish comments from a Federal Reserve official spurred bets that U.S. interest rates will be raised this year. Most Asian stocks advanced.

A gauge of the greenback’s strength climbed to a two-week high and yields on benchmark U.S. Treasuries increased for a third day. Sovereign bonds in Australia dropped by the most in a year and South Korea’s fell by the most in three weeks as trading resumed following holidays on Monday. About five shares rose for every three that fell on the MSCI Asia Pacific Index, with Japanese exporters getting a boost from the depreciating yen. Crude oil retreated from a three-month high.

American manufacturers’ output and new orders expanded in September, spurring confidence that the world’s biggest economy is robust enough to withstand higher interest rates. Fed Bank of Cleveland President Loretta Mester said Monday she expects the case for a rate hike to remain “compelling” at the next review in November, having been one of three policy makers to dissent in favor of an increase at the September meeting. The probability of U.S. borrowing costs being raised by December stood at 61 percent on Monday, up 10 percentage points from a week earlier, futures show.

“The data is suggesting the Fed will likely raise rates in December,” said Michael McCarthy, chief market strategist at CMC Markets in Sydney. “We’ll probably have a couple of months of stronger data gauging from the strength of new orders. The yen weakness is supportive of Japanese exports.”

Fed Bank of Richmond President Jeffrey Lacker is due to speak Tuesday and may touch on the outlook for U.S. monetary policy. Australia’s central bank kept its benchmark interest rate at a record-low 1.5 percent following Philip Lowe’s first policy meeting as governor, a decision forecast by all of the economists in a Bloomberg survey. The Reserve Bank of India is also due to review policy for the first time since a leadership change and 44 percent of the analysts polled were looking for a rate cut. Markets in mainland China are closed all week for a holiday.

Currencies

The Bloomberg Dollar Spot Index, a gauge of the greenback against 10 major peers, rose 0.2 percent as of 12:50 p.m. Tokyo time. The yen slid 0.5 percent versus the dollar, extending its longest run of losses since August.

“Better-than-expected U.S. data are reminding markets that November remains a live meeting” for the Fed, said Christopher Wong, a foreign-exchange strategist at Malayan Banking Bhd. in Singapore.

The pound fell as much as 0.2 percent to $1.2817, near a July level of $1.2798 that was the weakest in three decades. British Prime Minister Theresa May said over the weekend that she’ll begin the process of withdrawal from the European Union in the first quarter of 2017 and curb immigration, stoking speculation the U.K. is headed toward a so-called hard Brexit — with limited access to the EU’s single market.

Bonds

Australia’s 10-year bonds fell 1.1 percent from Friday’s close and their yield surged 12 basis points to 2.08 percent. South Korean bonds due in a decade snapped a seven-day winning streak, lifting their yield by five basis points to 1.45 percent.
The rate on similar-maturity U.S. Treasuries rose one basis point to 1.63 percent, after climbing six basis points over the last two sessions. A Treasury market gauge of inflation expectations advanced to a four-month high on Monday, spurred by Mester’s comments and an increase in oil prices.

Japan’s 10-year bonds erased earlier losses after demand strengthened at a sale of the tenor, with the bid-to-cover ratio increasing to the highest since June. The securities yielded minus 0.07 percent, compared with minus 0.055 percent ahead of the auction.

Stocks

The MSCI Asia Pacific Index added 0.1 percent, after gaining 0.6 percent on Monday. Japan’s Topix gained 0.6 percent, with Toyota Motor Corp. advancing 1.7 percent. Hong Kong’s Hang Seng Index was little changed, while benchmarks in Australia and New Zealand were the region’s only decliners.

“Overall, the U.S. economy appears to be on a growth track,” said Mitsuo Shimizu, a deputy general manager at Japan Asia Securities Group Ltd. in Tokyo. “As some had been expecting a deterioration in the manufacturing figures, alleviation of such worries will help Japanese shares rise.”

China Evergrande Group jumped as much as 12 percent in Hong Kong after announcing a plan to shift most of its property assets into a listed company in Shenzhen, where valuations are higher. Hyundai Motor Co. climbed in Seoul by the most since July after data showed the company’s sales increased last month in the U.S. and India.

Futures on the S&P 500 added 0.1 percent, while contracts on the U.K.’s FTSE 100 Index were down 0.2 percent.

Commodities

Crude oil fell 0.5 percent to $48.57 a barrel in New York, losing ground for the first time in a week before data that’s forecast to show U.S. crude stockpiles expanded. Production from Libya, among countries exempt from an OPEC output cut, rose to 500,000 barrels a day and will climb further this month, a state oil company official said.

Gold fell for a sixth day, its longest losing streak since August. Growing expectations for a U.S. rate hike weigh on the metal as it doesn’t bear interest.

Most industrial metals retreated in London, led by a 0.7 percent drop in lead, after Deutsche Bank AG warned that demand driven by China’s property sector will fade next year. An LME index tracking the metals moved into a bull market last week as economic data pointed to a stronger economic outlook for China, the top commodities consumer. [Bloomberg]

FTSE 100 Outlook and Prediction

FTSE 100 Prediction
FTSE 100 Prediction

If the bulls test the 6995 area today then that resistance level that held twice yesterday is likely to break and we should see 7015 (10 day Bianca) and also I think the 7035 area which is the 10 day Raff. Recently the Bianca channels haven’t been acting with as much force as usual, while the Raffs are – the 10 day at 6993 held yesterday. So, the 10 day Raff is worth a short today again. There is quite a lot of talk about 7200 and other such targets – usually a sign that we wont get that high when the media is bullish, and as mentioned a few times I think we are still going to get a leg down once this rally exhausts itself. Not worth trying to guess the top though for the moment. For today there is support at the pivot at 6955, then the 100 Hull moving average on the 2 hour at 6940. I am thinking we see 7030 before 6930 though. It will all depend on the bulls being quick out the blocks to start with, but those are the main levels I am watching today – 6940 and 7033. We have had the pattern of bull Monday, bear Tuesday a lot recently so might well see that again today. Something else to bear in mind anyway!

76 Comments

  1. Morning chaps.
    Cables getting a bit oversold short term and FTSE a little overhot, so dumped the long at 30 and 50 and gone just a marker short at 60, adding at 90 and 120, stop probably @ 160 for a pullback to the high 6900’s, maybe not today but if it does I’ll take it.

  2. Looking at the FTSE daily regarding Elliot waves, we are on the final 5th leg up, which should be the shortish..

  3. In VERY heavy short at 70, but have many all the way up

    Getting reamed on gbpusd and gold!

    Account has been temporarily furnished I’m good until about 7400

    1. Looking for the stock market bubbles to burst, weekly pattern on DOW is the same as 1987, same fundamentals low interest, media telling you all ok etc… I think the banks will bring everything down, they holding 3 times more derivatives than 2008….

  5. How are we holding up chaps…Si, Inoodle whats your position.

    I wanted it to go up a little but geez I’m getting squitty now.

    I’m thinking it go slot higher if the £ keeps falling. We need some sort of major bank scam or something to stop this!

  8. hey all
    I’ve been playing the top range on the dax… luckily I woke up late and missed the charge upwards as (judging by recent form) I’d have been shorting from 7am 🙂
    tmfp will tell me true on this I’m sure, but it looks to be a bit divergent on the rsi (ftse 5m).
    If my balls hadn’t been handed to me all of last week and yesterday, I’d short heavy.

    1. Hey george, yeah global companies in the ftse get paid in dollars etc, so if Cable drops 1%, their profits get an automatic bump of 1% (on those earnings).
      I’m sure there must be some offsetting negative consequence to those companies based on the same risk premium that is causing the pound to weaken, but it doesn’t seem to be factored in much recently!

  13. A wise man (tmfp) once said:

    tmfp says:
    27th April 2015 at 8:28 am
    7100, the gift that keeps on giving 🙂

    Let’s see if it is now resistance!

    1. And another one of tmfp’s quotes was …..a busy ant is more productive than a dosing ox…..welcome back tmfp and good luck all….:0)

  14. Morning guys ! shorted 7100precisly .. hey tmpf when did you come back .. I was away for some time as well

  16. IG sentiment – 90% short on ftse… would be a hell of a squeeze to push to ATH.
    Is it time to BTMFATH ???

  18. Errr, thanks for dragging up some of my past pearls of wisdom chaps 🙂

    As I said earlier, I have a light short now averaging 76 with more to come at 120.
    Of course we’re picking tops, but without a prime indicator it’s best to eke shorts out.
    I’m as comfy as anyone can be 30 under water, money management is v important as ever, only 50% of my long profit at risk worst poss scenario.
    Still further FTSE squeeze to come by the look of it, although the cable pressure seems to be easing up a tad.
    Ironically, I think that strength in the DOW will weaken the FTSE, but when is another matter.

    1. You get yourself in some pickles don’t you Si? 😉
      I’m 91 av now it tagged 20, but apart from a technical correction, I’m finding the FTSE bear argument a bit difficult.
      Like the DOW and Oil were in lockstep not so long ago, I think that FTSE/cable will head in different directions and, as the horrors of Brexit become more apparent, I think there’s no hope for the £.
      Just my 2 cents, as ever.

  20. Short 7103 average.
    Could be the turn we’re waiting for – pin bar on 15m, 5min rsi bounced off 80, GBP possibly created a double bottom base.
    crossing ze fingers and toes.

  21. interesting watching the sentiment change on IG – you can almost see the shorts being stopped out, then reinitiating

      1. on the ipad app (and maybe phone), you select the Market Data tab…
        Not sure where it is on the desktop

          1. nice one Nick.
            On the app, it shows the Trading activity too – eg 51% buys in last hour, 55% sells this week (current stats on ftse).

            The last hour was saying 55% sells about 10 mins ago, but has moved to 51% buys…

  22. thoughts on downside targets on ftse before dow open ?
    A Bit presumptuous of me to think its a downside target, but one can hope:)

      1. heheheheheheh
        I love it… You can’t imagine how pissed I’d be if that happened and I wasn’t on at SIze 🙂

      2. I wonder Si, have you ever lost an account before? And if yes, how do you fund your future deposits, if you don’t mind me asking?

      1. But more usefully, there was an analysis piece out yesterday saying there were lots of stops hiding under 1300.. I dare say they’ve been hunted and destroyed

  26. I’m in short in FTSE more times than I have had birthdays, broke all my rules and trade gold and gbp on a whim.

    They are all loosing!

    if it even dropped to 7040 I would be spasmatic with joy!

    1. and then back 100 points again..
      ffs this is nuts. (though i did surprisingly make money out of that drop)

  29. Slimmed the short by 50% @ 85, not too comfy holding overnight with the DOW looking a bit pre menstual…..

  32. I think its safe to say that at this point, I have absolutely no clue where its going to end up in the next 10 seconds, or 30 mins… Was there any news out near the close ?
    I guess the shoot for all time high was a ‘no brainer’ (which I, having no brain, didn’t trade), but the auction period must have traversed 150 points in 10 mins 🙂

  34. Took +40 on the balance, square overnight and have a look in the morning.
    I’m too old for this shit.

    1. Crazy day. Looks manipulated when its like that. Rise to screw as many as possible, then drops fast

      1. Yeah, that morning action had stop hunt written all over it.
        At least a bit of volatility coming back, during my sabbatical I looked occasionally and realised I wasn’t missing much anyway.
        Catch ya tmrw, dip and rally maybe?

  35. Managed to close a few out for good £££ but still in really heavy, too much really for my account. I have some in profit so will aim to take those If we see 7030.

    Getting totally shafted on Gold And gbpusd…will hold on and see what goes, looks manipulated so may bounce when the FED have finished dicking with it.

    1. Yep, that 7033 seen. Looks like a perfect 61.8% for today’s rally. Whether it will drop further tomorrow – it’s the question.

  38. evening all, not been on here for while, got little fed with reading all the i am £400 a point short or i am £800 a point short, was like sitting in the coffee shop next too citi bank.
    well market was manipulated to the max today and as soon as 16.30 came bam straight down. anyway today was a spot 1.62 extension from the 6641 low, should see a pullback to 6930/40 maybe even touch the trend line at 6900, from there either a further breakdown or a good bounce back up.

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