Good morning. Well the short worked out a treat yesterday dropping all the way to the 200ema area before we got pumped back up in a short covering rally. I am still feeling bearish around the 6600 area, but still have the support level around 6550, and 6560 area where we have the bottom of the 10 day Bianca channel for today (and has held for a couple of tests recently). While I have been writing this paragraph the FTSE has just dropped 20 points premarket which isn’t too good for the bull from yesterday as could just be a stop hunt! Pre market manipulation anyone?! We will be all eyes on the Fed next week with regards to the future of QE which will be making a few nervous. We had Mark Carney speaking yesterday in the UK, mainly about the current house prices rises, but also fairly upbeat about the economy. With regard to interest rates, they are still tied to unemployment and the 7% threshold but then also said that they can be increased if other factors permit. He reckons 2016, the market thins earlier. I’m with the market on that one.
Asia Overnight from Bloomberg
Asian stocks fell, with the regional benchmark index on course to snap an 11-day rally, as the U.S. and Russia hold talks on Syria and investors await the outcome of a Federal Reserve meeting next week. The MSCI Asia Pacific Index dropped 1 percent to 136.31 as of 12:43 p.m. in Tokyo, halting its longest stretch of gains this year, as three shares fell for each that rose. The gauge is heading for a 1.9 percent advance this week. The measure’s 14-day relative strength index, an indicator of trading momentum, climbed to 67 yesterday, near a threshold of 70 that may signal to some analysts shares may have risen too far.
“Investors paused for thought in the wake of the market’s recent strong run,” Matthew Sherwood, who helps oversee about $25 billion as head of markets research in Sydney at Perpetual Investments, said in an e-mail. “The global economic rebound still remains fragile and below trend, and earnings growth forecasts are extremely optimistic for this environment.”
Euro-area industrial output fell more than analysts estimated in July as the region struggled with high unemployment. Australia’s jobless rate last month reached a four-year high, while claims for unemployment benefits in the U.S. last week fell. A report today may confirm Japan’s factory output expanded in July.
U.S. Futures
Futures on the Standard & Poor’s 500 Index were little changed today. The gauge fell 0.3 percent yesterday in New York, snapping the longest streak of gains since July.
U.S. jobless claims declined last week to 292,000, the fewest since April 2006, as upgrades to computer systems in two states caused employment agencies to report fewer applications. An agency spokesman said the upgrades played a major role in the drop in claims. Economists were expecting an increase to 330,000 from 323,000 in the previous week.
Fed Stimulus
The U.S. central bank has said any reduction in stimulus will be tied to a sustained recovery in employment. The Federal Reserve will decide to cut its $85 billion in monthly bond purchases when it meets Sept. 17-18, according to 65 percent of economists surveyed by Bloomberg last month.
Syria
U.S. Secretary of State John Kerry is in Geneva to meet with Russian counterpart Sergei Lavrov over a deal for the removal of Syria’s chemical weapons. Syrian President Bashar al-Assad said any deal to surrender the nation’s chemical arsenal must be a “two-way street” in which the administration of President Barack Obama drops its military threats and stops arming Syrian rebels.
Outlook
Friday the 13th – anyone feeling superstitious? With yesterday’s V sign on the FTSE to all and sundry the FTSE keeps the targets from yesterday for shorting levels alive, being the 6627 area. Today’s pivot is 6584, which is also the 10 ema on the 30minute chart which, as we are bearish currently on them, will likely act as initial resistance. We have the 30 minute still in play as has been the case all week pretty much, with support at 6570 and still heading upward. If this pre market dip was manipulation to trip a few stops on the short covering longs from yesterday then we could see a climb initially to the 6600 area, possibly the target mentioned a few times at 6627 ish. For today I am thinking maybe a little dip again, probably to the 6560 area then a bounce back. If 6608 breaks then its pretty likely we will get 6627 (6632 is R2 for today as well as the Bianca 20 day at 6638) so I think a short at around that level will be fine.
Dow 30 mins sparking into life again and moving up. Price has crossed Pivot – should be within easy reach of R1. LinReg 10 closing on LinReg 100, which in this TF currently is still pointing down.
Not sure about “easy rise” on FTSE.
Did anyone else see that large spike in the DOW on IG just now to 15388? 🙂 i wonder why?
Yeah i just got bummed by it, stop at 15370 and IG closed me at 15385 🙁
That spike was ‘pure evil’…deliberate! Did you see how it just then suddenly reversed by some 50 points? Stop hunting! I defy anyone who says stop hunting doesn’t happen!!
*I
And away goes the DOW. No stopping that that beast of late. Beware the shorters!
I think the DOW is on ‘VIAGRA’… 🙂 This ‘fake’ rally in just the DOW is a ‘pure pump and dump’ in anticipation of Fed tapering next week. Watch it give back these last 500-600 points it gained since Friday. And they say on CNBC the markets are a ‘rational price mechanism’….my ****.
VIAGRA?!! there is a whole spectrum those morons over the pond have taken…lol
This is going to end up in tears for lots of small retail investors who are getting in to the market now….there is so much complacency among traders that nothing good is going to come out from this!
Two thoughts
First. Getting back in the swing I have put some time into looking at the DJI on daily and weekly. Plotting a fib from the 15650 (yearly top) area back to the open on 1st Jan the support points on pull backs have generally worked well. If the DJI pulls back to 15100 zone and holds then a push to make a double top would be a perfectly reasonable trading idea. If next week it keeps grinding up then the double top looks good again. There is a saying “If you see a double top you sell a double top”.
Second. In the good old days before the internet and racing via your satellite dish I used to spend a good bit of time in my local bookies. In those days you could meet one or two clued up guys in amongst the mugs. Clued up punters or traders don’t listen to the noise, don’t blame circumstances and conspiracies when a bet/trade goes down. Remember for every short that got stopped out there will be a long taking a profit. Keep the stops in and the emotion out.
Trade safe
Just on the basis of visual inspection of weekly candlesticks, the Dow seems to have had its strongest week since that beginning 31 Dec 2012 (whether due to relief, conspiracy or not unusual cyclical development … :)). Increases over the past couple of days have eased a bit, but the weekly graph especially holds out the prospect of a plot to ensure that the index exceeds 15700 within the next few weeks.
Wonder what happened to all that good Chinese data out this week and last week which rallied the miners? Seems metal prices are easing already…so soon??? 🙂
Hi Jack – My comment above was just about Dow/30mins. But you’re quite right, the FTSE is languishing below the Pivot and pierced S1 – to which it might return! 🙂
…charts, charts, charts its all based on charts, trust your gut feeling, stick with your plan, 🙂
True charts are helpful, but there is always the chance of politics and other bs, plus there is always the luck side of thus game.
I still reckon they are making the market in anticipation that there will be a drop as market is 10% this year not including the fact that it rising stupidly towards the end of year anyway…
Just shorted Dow at 15380 already in profit put stop to BE and will let it run till next Friday ….
Hmm i wish you luck Bee as the pattern tends to be rise at the beginning if the week, decline albeit a slow one towards the end. Personally i am staying as day trader as the next weeks FED could also push the markets up initially before the dip. Best of luck though, keep the stops in! P.s im sure RAY will let you know the dow can be a bch…
PS nice one NR on the doubletop looks to be a great call.
As soon as I am in profit I always put my stop to BE most of the times it is hit and miss on a good trade but on the other hand not loose anything, if I been stopped out I just sit down and try to figure out why my entry level was wrong.
True, i also have stop at BE but when it recovers always end up annoyed with the ‘potential’ i could have made 🙁 key is emotions i guess. But that recovery on the DOW just now was BS
Not sure why you guys are trying to short this rocket….
At some point it will turn around. If I manage to get out at BE or with a small loss I don’t mind because I will have a great entry
PS made 105 pips on the Nasdaq’s drop today at the opening so don’t mind being stopped out on the Dow tonight. Great Friday overall!! Have a good weekend guys!
Weekly ProRealTime charts using linear regression 100 as the trend reference –
S&P 500
Trend: Still positive, but with some easing of gradient since early August.
Last low: Week beginning 26 August.
Current direction: Up
Short term outlook: Limited upside
Dow
Same comments apply. Last week’s performance (week beginning 9 September) particularly strong.
FTSE
Same comments apply. The dip to the low point in week beginning 26 August, and following recovery, have been shallow. The latter stalled in the second half of last week. The daily profile suggests the likelihood of limited downside in the week ahead (week beginning 16 September).
Cheers 🙂
Still holding short on dow from 15277 should i take 50 percent loss at this stage and hold rest or hang in for A drop now that gold rising? questions I am asking myself……….
just shorted dow @ 15,500, stop @ be
got stopped 🙁
tried another short on dow @15,516
Not a good idea shorting anything now.
no good!
Wow paul you must have got hurt hard, Trading doesnt take stops into account on gap ups. OUCH.
cmc platform opens at 11pm Sundays. I wasn’t affected by the gap as traded after 11pm
Syria deal has pushed the Dow almost 170 points up???
http://www.marketwatch.com/story/summers-withdraws-from-consideration-for-fed-post-2013-09-15-171032050
Sorry but non of the two main stories is a reason for the DOW to go up 200points,FTSE 80points, DAX 160!!…the whole thing is one big manipulation by the HFT…if we just look at FTSE, the £ is getting stronger and stronger so the market should have gone down.The big market in Asia are closed today so who is buying now??
Whats your point?
Yes the market is being manipulated, always has and quite possible is more so now. But you can do nothing about it. If you are long, you would be grinning ear to ear. Most people on SB accounts are now short, expect the markets to take these peoples money.
It’s not fair, but thats life.
I have been trading for a long time and I do OK. Stock market is not some syfy entity in its own looloo land, it suppose to be connected in some ways to fundamentals.Have you forgotten subprime crisis?or the flash crash in 2010?One way or another we all will pay the price
Exactly my point Adam…there is a complete disconnect between stock indices and the fundamentals…
And NR6 above doesn’t believe in conspiracies 🙂 I could write a whole book on it…just look at NFP data last week dow up 100 down 200 then up 100 then down 100..intraday 600 point move based on the SAME ECONOMIC DATA!! So NFP data was interpreted some 4 times in 1 day by these city Harvard and Oxbridge economists..right you are… 🙂
To be a good trader the first lesson you need to learn is that markets ARE manipulated.
*NR169
And on a probability basis, what are the odds of a long being successful after about 4 TRIPLE DIGIT moves in the DOW…so naturally after say a 300 point move up in the DOW from 14800 it is entirely natural for it to retrace given the past probability patterns, you do NOT expect it to go up straight another 500 points!! Remember the adage, markets don’t go up in a straight line…well it’s complete BS lately…DOW rally this year straight up from 12800 to 15000 before a little halt. Japan even worse…9000 to 16000 in 1 swoop before a retrace!! Etc etc.. all MANIPULATION!!
Actually more like 5 or 6 consecutive triple digit moves up….
I have just been stung so unlucky out a short on Dow 29 mins before close on Friday typical !!!
Seems fair to me too… I’m sitting long….GRINNN!
nice one al. Where do you plan on holding too?
*NR169
Syria deal was concluded on Tues…we were supposed to sell on the news days ago…not continue the rally….
Syria deal was concluded on Saturday ray…
The details were…but the ‘main principles’ accepted by both sides on weapons decommissioning was concluded in the early part of last week. Tues I think. That’s why we were told last week on some days that the markets had rallied..because of Syria. I can have a look at the news archives tmrw and will let you know.
I got stopped out last week on a £2k loss on the DOW at around 15270 after averaging down. But I really really feel angry at the way this DOW rally stinks and continues to fleece the small retail investor!!
Just a cursory search…
Sep 11 BBC US & CANADA… ‘Syria crisis: Barack Obama puts military strikes on hold’..
Sep 10 The Scotsman.. ‘Obama: weapons offer is potentially possible’..
Sep 10 Guardian: ‘Hopes of Syria breakthrough after Kerry slip’…
etc etc but as I said it was mainly a done deal in the early part of last week and there was even strong indications last weekend..
The double top is imminent, got 50 pp on the ftse though recovered last weeks losses…
not sure what Double Top you mean.
Day trading will be difficult, as DOW is up 171 points and ftse up 50ish. Might see an initial rise in the morning..,
Not interested in debating conspiracy theory. I like facts. So Sunday will generally be the most sensitive time for futures as the MM’s have to set a price. So yesterday the big news was that Larry Summers had withdrawn from the race to become USA Fed chair. These out of hours beginning of the week jumps generally settle back.
Quote ” Investors took the withdrawal of Summers as a green light for risk and lower interest rates, with initial market reactions signalling a view that the bank’s next chief was more likely than Summers to extend an era of easy money that has flooded global markets with cash”
As we can see the markets are now settling back as the real trading begins.
I sold the FTSE at 07.45 @6652 for £4pp and took a quick £100. I probably should have let it run but am not keen on trading too early in the day generally.
Trade safe
We are well above the Pivots zones, about R3 even, don’t think that the usual case scenario will happen. To be honest, now at 9.22 I have no idea what is happening. As usual they broke up when everybody in England seeing dreams and we had no chance for that ride.
…. the mental thing about this will be that when Yellen’s appointment is confirmed the market will soar another 2%, when QE is confirmed as taper light another 2% we live a truly astounding moment 🙂