Still expecting one more new high

Good morning, the 6660 level has held for the moment but we had a very flat day yesterday, consolidation really after the rise on Tuesday. I still expe3ct just one more high before we start a down leg, and probably a retest of the 6720 area. FTSE has held up pretty well overnight and regained 6690 as I write this. we have jobs news out in the US at 1330 today and a few other bits so we will get some volatility around then. tomorrow see UK GDP news released which I think will be fairly positive. Talking of news, as you probably saw, news broke last night that the US had been bugging Merkel’s phone – that went down like a lead balloon! Looking at the daily chart, the 10 day Bianca channel is very narrow with the top at 6747 and the bottom at 6686 so I expect that to break sometime soon, and then the 20 day to come into play. I am leaning slightly towards the bottom of that channel breaking once we retest 6720 or maybe slightly higher – so still cautiously bullish for the moment.

Asia Overnight from Bloomberg

Asian shares fell for a second day as a surge in China’s money market rates overshadowed manufacturing that beat economist estimates. The Australian dollar rallied with crude oil and metals.

The MSCI Asia Pacific Index lost 0.2 percent by 1:09 p.m. in Tokyo. Standard & Poor’s 500 Index futures advanced 0.3 percent and FTSE 100 Index contracts climbed 0.4 percent. New Zealand’s dollar and Australia’s currency each gained 0.3 percent. The S&P GSCI Index of 24 commodities added 0.2 percent, rebounding from a 10-week low, as crude, silver and copper increased at least 0.5 percent.

The preliminary 50.9 reading for a private manufacturing gauge in China compared with a 50.4 median estimate from analysts surveyed by Bloomberg News. China’s benchmark money-market rate jumped the most since July for a second straight day as the central bank refrained from adding funds to the market. The euro zone reports factory output today and the U.S. issues jobless claims.

“China’s economy is still on course for decent growth, not the kind of spectacular growth that we were used to in the past but enough growth to keep it above the government’s bottom line,” Louis Kuijs, chief China economist at Royal Bank of Scotland Group Plc in Hong Kong, said on Bloomberg Television. “They would like to see rebalancing over time.”

S&P

S&P 500 index (SPX) futures signaled the gauge may rebound after yesterday falling 0.5 percent from a record. Earnings have beaten analyst estimates at 76 percent of the 182 companies in the S&P 500 that have released their results so far this reporting period, while 51 percent exceeded sales projections, data compiled by Bloomberg show. Dow Chemical Co. and McKesson Corp. are among index members scheduled to report results today.

FTSE Outlook

ftse 100 prediction
ftse 100 prediction

So, onto the FTSE. Today’s pivot and yesterdays close are both 6675, and with the daily trends still up I think we will still make one more high before we get that down leg. I imagine quite a few went bearish yesterday so Mr Market might want to stop a few out today. I have resistance at 6703 initially today so expect a dip from this level, to probably that pivot level. The bulls made hard work of it but defended the 6660 level yesterday though admittedly not with much conviction. Overnight has been a little stronger, helped by some positive China Manufacturing news. I am still cautiously bullish, not keen to load up large longs at these levels and am starting to swing to bearish for the next few weeks.

128 Comments

  1. Agree Nick. I don’t want to put longs here either because it is so high, but Ftse is creating a lot of tops on the daily, hitting the 6725 resistance. Surely the more it hits it the weaker it becomes? The daily chart does not show a good trend line any more, but looking at the weekly the Ftse is just over half way up to the top.

    Dax – The daily chart here corresponds to the weekly for the trend and it is about 100 points of its top. 30 min chart showing a possible double top with neckline at 8904. If it breaks this properly i’d expect another 50 point drop before rising. More than likely though I expect this to be consolidation and a rise from the 8900 level to carry the trend up.

    Spx & DJ – Spx could bounce down from current level on the daily chart, while the DJ is about 75% to the top of it’s daily.

    GLA and trade safely.

  2. …. as just about everyone thinks the top for now is circa 6720, its a bang on that the intraday will reach 6750 today! be afraid be very afraid 🙂

  5. Hi,
    I think I will start posting my views here on daily basis as well (if you guys mind then you can tell me to shut up 🙂 ).
    So carrying on from yesterday where i mentioned people should start long at 6659 (I am stilling holding 100/point). I mentioned if ftse closes above 6660 then we are heading up and will def break 6720 this week (but no gurantees of week closing above). I am still sticking to this for sure. I do not advise anyone to sell even at 6720 as this market is looking to make new tops.
    People need to understand the concept of “Anchoring”. Just because historically market is bouncing off specific levels doesn’t mean it will keep on doing so. If this was the case ftse would have never been this high right :). This is the reason why most retail traders lose money because they keep trying to catch the top/bottom when the market is making new high/lows!
    Also notice that technical analysis does not make sense (well most indicators, i dont know all) when the market is in trend, hence I tend to ignore these reversal indictors during trends. We have had decent numbers come out already for Europe and biggest one tmorrow (UK GDP YoY – expected better)
    Also jobless numbers coming out for US, and as we know good or bad both considered positive for markets (bad – continuing stimulus).
    The only thing that would put me off is the Home sales numbers, this if comes bad, may cause the market to at least stagnate, depending on the jobless numbers, so will be a tricky trade (for me at least be to keep hold of my position or cut it a little).

      1. Yes the ftse will keep going up forever…its all good news…employment numbers, fed trapering etc
        Pardon the sarcasm but this kind of advice without any caution is what catches people out. almost all markets are at or very near historical highs and the advice is to indiscriminately keep going long???

        Yes the market may go up but it is a very tricky market currently…people should be very cautious and make sure all trades have stops. Protect yourselvess!

        1. Well if u dont trade with SL (even in strongest trend direction) then your doing something very wrong!
          MY SL set to break even.

          Also If u have been following what I have been talkign about, I did not mention it will continue to rise forever.

          And if new highs were not being broken, then the mathematical models which suggest drift would not exist…meaning markets purely move on fixed noise hence be ranged bound forever. This doesnt mean dont long wen close to new highs, it just means assess if you think high will break and if it will be cautious long.

  7. DO NOT GUESS THE HIGH!

    Not everyone trades to the same timescales but even a day trader such as myself has to be aware of daily candles AND market sentiment.

    If you look at the daily candles we made a high of 6876 on May 22nd followed by a lower high of 6715 on 1st August BUT two days ago we took that out with a high of 6720.

    For those ‘traders’ trying to guess the point at which the FTSE will reverse or think it’s too high pull up the monthly chart, go back to March 2009 and ask yourself if you can see the obvious.

    1. Still long from yesterdays 6558, only my second trade this week.
      At this stage best to stay long, until we see some real resistance, which i am expecting at 6720.

      1. But obviously not going pre-empt the short, just going to close and wait it out, who knows it could hit some stops and travel another 20 or so points and go even further.
        Better safe than sorry.

      2. yeah i def see resistance at 6715-6720, but def not to go short. At most Iwill take 50% position out if i see drawbacks being made and re-enter a bit lower.

  9. Btw just to point out, and when it does drop I reckon people will still be clinging to their bullish sentiment, keep the stops in and be flexible.
    You can try rationalise the market, but eventually if catches you out.
    If only everyone was doing so well, £100/p, sorry but it gets under my skin when people like to brag. We all need help thats why we`re on this forum lol

  10. Well, I got a short on Dax, stop so as to make a few pound at worst as i’m in profit. Hoping it goes to 8940, which will be bottom of a 30 min trend line. Not sure i’ll get it but hoping.

  11. I don’t see much resistance in the medium term but a healthy breather back to 6650 and possibly 6550 in the next 2 or 3 weeks is probably likely. After that nothing likely to hold back this runnaway train to 6800 and beyond till the first week in January when the debt ceiling may raise its ugly head again.

    BTW – Come on You Spurs! Looking forward to a Spurs v Arsenal Europa League final as the goners gertting zilch on their travels.

    1. Well JAVED I normally agree with you, but you sir have gone TOO far. 5th Place.
      Nothing better than some banter to break the ice

      1. Haha…..The Goners have had an easy schedule upto now – only good team they have played has been us……our new players didn’t even know eachother’s names then and we never do anything at Emirates anyway. The next couple of months will be a tougher test and you will be out of 3 competitions by then…….haha!

    1. oh…..and just the World’s most expensive player….! And now we have produced another high quality winger…..Walcott isn’t even the best winger in North London never mind England.

      Right back to the markets……….!

  14. i always try to read everyones posts more so the more experienced traders, more often than not it makes me think twice about positions i have open- currently long from 6683 btw still holding

    2. went 1 point above my stop 🙁 It will probably go to that trend line now. America looks a bit spilly tbh, but who knows.

    2. See how it goes there is strong resistance @6726.
      Breaking that we might see higher levels otherwise best to pull out at 6720 and see how it runs, better safe than sorry.

  19. Just incase if someone is following me (I have cut 25% of my long postion at 6725) as it might drop a tiny bit today/overnight which I will reload onto (buy back at 6595). If that doesnt hit then I wont re-enter at any other point (until i mention it)

        1. yes sorry meant 6695, i still have 50% long open so :).
          Never say difficult, I aimed to build long at 6659 when ftse was at 6700+ lool.

  20. hi guys haven’t been here for a while hows everyone holding up? missed the trading day today, hoping to catch a short from 6730, if it reaches there

  22. And another close at b/e lol, it looks like it really wants to hit that 6720 mark.
    I`m done for the day, gl all.

  24. …. i’m tempted to suggest (but don’t follow me) its time to SHORT for a 75 big ones, despite my earlier call 7750 not coming this week 🙂

  26. … mahmoud never wild guessed in my life, all of my trades come from painstaking analysis amassed over hours of chart study, and if you believe that then your on to a winner 🙂 the art of a hunch is the most underrated weapon of all just watch what happens 🙂

    1. Yeah got that myself, but now I`m wary since DOW`s been messing around that mark a lot and not breaking it

  32. … yes on the S&P 1752 and shortly on the FTSE take no notice of this drifting sideways tosh, its coming down at least 75 points in the next day or two 🙂

  34. 6720 is resistance, last 2 daily candles sellers have appeared and are selling into strength… Look to short on weakness..

    1. VERY VERY highly doubt ftse will drop 75 points 2morrow.
      Tomorrow will be a tricky day, rise for ftse in morning and …I really dont know where after US opens, hence my position cut of 50% (long), will close another 25% (50% of current position if ftse hits 6750 tomorrow).

  37. View for week finish…FTSE (at least in my view), certainly to close above 6720, next week is to start with bearish tone (maybe thats what you guys prob shorting now). Looking at a couple brokers…most retail traders long, they most will be stopped out tomorrow. Hence my plan is as follows.

    Current position – Long (holding only 50% of original position).
    BEST SCENARIO
    ===========
    If market drops to 6700 – Add 15%.
    Market drops to 6695 – Add 35%.
    CLOSE OUT EVERYTHING AT 6750 OR AT CLOSING PRICE.

    LOSING SCENARIO
    ==============
    If market drops to 6700 – Add 15%.
    Market drops to 6695 – Add 35%.
    if it drops to 6670 – Close everything (Thats a B/E for me, as I have already taken profit on 50% of my position).

    I PERSONALLY BELIEVE ALOT OF PEOPLE SHORTING WILL BE STOPPED OUT TOMORROW!

    1. MISTAKE!!!
      “most retail traders long”
      meant most retail traders are SHORT!!!! sorry im feeling retarded!

        1. Of course I use info, I meant any data of significance, GDP at 8:30 , but obviously you`re too ignorant, but thanks.

  41. well, if we are calling shots, dax to 9045-9065, then down time several hundred points.(500-600 points).
    Ofc, do you own result you lazy B@r Stewards.
    And also, this is all in my wildest hunches.
    GLA

  42. … While we are doing hunches (and why not) anybody got a hunch on the S&P, I think we’ve topped for now at around 1760, looking at a 30pt correction before we follow the well trodden path of onward and upward 🙂

  43. Whilst we are on the subject of data releases Daily FX have a free app which allows you to filter by region and importance. Quite handy when on the go or away from your desk.

  45. Might see done some downside overnight into tomorrow morning, before an expected fuelled rise in the morning. It’s been the case of buy the dip in the morning the past week, bar tuesday.

    1. hope so i went short at 6726 stop tight at 6736- if it is going to drop its possible it’ll drop to about 6707 before it bounces again. maybe

  47. It is one of those days, I got most of my trades wrong way! Lost 1/3rd of profits I made in last three weeks. Just wasn’t my day.

  48. I must say i think we need to start to have some substance in trades on here, i just get the feeling a lot of people are trying to guess a top? When you say going short 6727 lets here a reason why? What do you think guys ?

    1. al, no one knows the top. all they have to work off is the charts. At this level of the indices, I would recommend people to trade for small points, setting orders to get in at trend levels, whether long or short and setting stops.

  49. Another hunch, Dax has not risen the same as other indices today. Could it be because it has been ahead of the others and now is waiting on the catch up? close to the daily top, maybe it is waiting for the others to get to the same level before final push to top of daily.

  52. I feel there will be some taken off the table tomorrow when US opens. Friday after all and then maybe onwards and upwards. No trade for me I feel like I got lucky and pushed my luck earlier in the week with a profitable short. I agree with flash – pocket the wins. Difficult to trade long time frames when the market bounces around what may be the top or may be a good support area being formed. Good luck all

  53. X2wlt sorry have to disagree with you. It is exactly why you trade higher timeframes when it bounces around on the lower ones…

  54. Al I guess it’s just different strategies but from my perspective I’d have been down on my short trade now if held for a longer time frame and im less stubborn these days! All hindsight in my most recent trade. With so much news related info moving the market each way its great for trading so why not bank good profits? I’d say most would have triggered their stops this week either long or short unless you picked a great entry. I am long term bullish but it feels on a knife edge at present. Good luck I enjoy reading your trades.

  55. I have a simple strategy which has served me well over the last couple of weeks. Stay long until I see a close below the previous days opening price. Simple but effective. No point in trying to guess the top, everybody was doing that at 5800 last year at this time and here we are 800 points up

  61. Nice to see you back, mahmoud, with you I had a good run in the summer. Hope to see your posts here again.

  62. Got rid of this long, had a profit but not as good I would like it to be. It’s sell now, it’s sell and nothing I can do now.

      1. No, I had to take my son to dentist so I closed my long and with clear concision went. And it rose as soon as I left. It wasn’t meant to be. Maybe another long later.

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