Support 5871 5861 5850 5800 Resistance 5905 5917 5926 5999 6030 6181

Good morning. Well after that drop yesterday I feel the chances of seeing 6400 in September are pretty slim and it looks like the 6298 level hit earlier in the month will be the high of the rebound from he August lows. Talking of which I think we are on our way to retest them now, and probably a bit lower – looking at 5700 FTSE and 9300 Dax sort of areas. Felt a bit aggrieved that I had a Dax short at 10015 yesterday morning for the open and closed it at 9755… whoops! The initial FTSE short worked well from the 6119 level, but the supports just got blown away as the market endured another sharp decline. Interestingly that Gold short also worked out well, no flight to safety for that yesterday! Overnight has been poor with Chinese PMI missing too, so reigniting fears that if China slows the world slows.

US & Asia Overnight from Bloomberg
Asian stocks extended declines after a China factory gauge unexpectedly fell to the lowest since the depths of the global financial crisis.

The MSCI Asia Pacific Excluding Japan Index fell 2.1 percent to 399.04 as of 10:38 a.m. in Hong Kong, as commodity producers led declines after raw-material prices tumbled. Futures on the Nikkei 225 Stock Average slumped 3.4 percent in Singapore, with Japan’s equity market shut for a holiday. A private Chinese manufacturing gauge slid to the lowest since March 2009, underscoring challenges as the nation’s old growth engines splutter.

“China is at the front and center of investor concerns,” Chris Green, an Auckland-based strategist at First NZ Capital Ltd., said by phone. “These numbers would add a more cautionary tone to the market’s perception of the risks around the Chinese growth profile and further reinforces the risk off attitude in the market.”

China’s Shanghai Composite Index slipped 1.6 percent, heading for its first decline in four days. The Hang Seng China Enterprises Index of mainland stocks traded in Hong Kong dropped 3.2 percent, while the city’s benchmark Hang Seng Index fell 2.3 percent.

Australia’s S&P/ASX 200 Index slid 1.9 percent. Taiwan’s Taiex index sank 1.8 percent. South Korea’s Kospi index slumped 1.3 percent. New Zealand’s S&P/NZX 50 Index lost 0.2 percent. Singapore’s Straits Times Index declined 1.1 percent. Futures on the Nikkei 225 traded at 17,380 in Singapore, with the underlying benchmark closing last week at 18,070.21. Trading resumes in Tokyo on Thursday.

U.S. Futures
The preliminary Purchasing Managers’ Index from Caixin Media and Markit Economics was at 47.0 for September, missing the median estimate of 47.5 in a Bloomberg survey and below the final reading of 47.3 in the previous month. Readings remained below 50 since March, indicating contraction.

E-mini futures on the Standard & Poor’s 500 Index declined 0.8 percent. The U.S. equity benchmark index dropped 1.2 percent on Tuesday as material companies retreated and Volkswagen AG’s diesel-emissions cheating scandal rattled global auto stocks.

The Federal Reserve stood pat on increase rates last week, citing global market turmoil and a slowdown in China. Then a quartet of Fed officials muddied the waters, talking up prospects for higher interest rates in 2015.

Odds of a increase at the next meeting in October are at 18 percent, according to Fed funds futures, while the probability of an increase by the last meeting of the year, on Dec. 16, is 39.3 percent. Fed Chair Janet Yellen is slated to speak later this week, potentially providing more clarity as to whether to expect a rate increase this year. [Bloomberg]

FTSE Outlook

FTSE 100 Prediction
FTSE 100 Prediction

I wouldn’t be surprised to see a bit of an initial bounce to start things off today as the daily RSI is at 30, we are just below the various daily support channels, there was a few headlines stoking the panic yesterday to get the retail investors to panic sell their shares, and we have had a large overnight drop. That said I think 5700 looks likely now, and unfortunately I don’t think 6400 in September is going to happen – 6300 was the max after that August low of 5800. We might see that level again today if the bears stay in control. There is a fairly steep declining 10min channel in play with resistance at 5925 and support at 5850ish at the moment. As mentioned on Monday, shorting the rallies is still the preferred option! The bulls will need to break above 6023 now to start pushing higher, which I think is a big ask until we have tested the lows – that said I will be looking to change sentiment as we near the 5750 area. Looking at shorts at 5920 and 5970 initially.

72 Comments

  3. mali7 says:
    September 22, 2015 at 4:24 pm
    Just to say LOD today in market hours will be below 5940 I think, then tomorrow up, but watch out for sell after market or overnight

    🙂

  5. Hello chaps, had a nice break and returned ready to go, hopefully mojo all rejuvenated.
    I was getting very ragged and trading for the sake of it, saw the danger signs and b**gered off to the country. I’ve worked too hard for a good year so far and wasn’t going to p*ss it away.

    So, I’m still Mr. Bear. My overview is the 1000 point drop from 6760 to 5760 was almost exactly 50% retraced to 6260 (round numbers here) and now the bear trend is re established, with a test of the lows next up.
    Spent all of yesterday looking at best day trading entry methods, as my simple 1 min rsi system wasn’t proving suitable for these big ranging/trend days.
    The fact is that the next 20/50 points are completely unpredictable atm, so I am concentrating on getting any entry, long or short, into small profit with a break even stop asap. Not worried about how many nil trades that might mean.
    Currently paper trading 3min 8 rsi on 80/20 entry.
    But….. that would have meant a short just now around 6000 and running 30 points against, or averaging up in say 10 increments at 6010 and 6020 which would be now showing ~-5 x 3, which isn’t the sort of r/r situation I want in these hairy markets.

    Any thoughts?

      1. Thanks Senu, same to you.
        This rally today has all the look of a dead cat, but getting a short entry with a realistic stop is the problem.
        I know ‘no pain no gain’, but I don’t like looking at red ink, even for a short time.
        Very easy markets to lose money in, which is not why we’re here.
        As you know.
        🙂

          1. Never believed much in pivots personally.
            There’s three ways that shorting would have gone:
            1) a single stopped out for -20 or whatever
            2) a multiple taken out at 6000 (1min rsi) for 3×10 profit
            3) a multiple still running (in red atm), with a previous high+5 stop and potential 3×25 loss.

            What would you have done?

  6. Hi All,
    After market sell off did happen, and low 5876 hit, unfortunately didn’t trade it that way though….looks like full bull on today so far…not easy though, as one day we discuss 5700, next day we discuss 6300…crazy markets

    1. Yes, but I won’t regret if I miss some more points after I close my trade. I only look for what I had planned.

    2. Don’t beat yourself up Jack, these are as hard markets to trade as I’ve ever seen.
      Get your nose in front, bang on a break even stop, and run it with a close trailing stop might be the way to go.
      GL.

      1. Yes, trailing stop. Oh I dream about it. I did it last week, don’t have guts this week. Last week once I missed out on 30 points which I let them to take back while in a trade. Didn’t have guts to close on time then got greedy and wanted it all back, got 1 point for that. But I shouldn’t be upset about it because emotions are no good here. I will do better next time. I did good now, but not the best because it wasn’t my usual set up. This trade was just off the pivot against EMA so I felt uncomfortable to hold, although could have trailed as it states in my strategy. So there’s always a reason for that..LOL

        1. Hey Tmfp I’m encouraged that you have said “these are as hard markets as I have ever seen to trade” I have been quietly making steady progress but I got caught out last night by that 100pt plus drop at 4am. I’m trading or monitoring 17 hrs a day and I thought I had learnt nothing in two years solid but I have learnt a lot it’s just the market has got progressively harder.You don’t learn by having a good time,you learn by failing a bit.i have got back in the saddle this morning and pulled off 4 winning trades three small ones and one in three figures in money terms.If we lose our confidence its game over! Thanks for your encouraging statement and the very best of luck to all here.

          1. Hey anstel, I say what I think and to transition from the way the FTSE was moving earlier in the year to the way it’s moving now, is very difficult (for me anyways).
            Bear in mind when you hold overnight positions, you are effectively trading on, or vulnerable to, a Chinese market with huge potential volatility and paper thin volume.
            Do you really want to do that?
            Good Luck, as ever.

          2. Thanks tmfp I watch the A50 closely for indications but this lot is all over the place,I just sometimes elect to hold overnight if I think it will be to my benefit to hold slightly longer term as very often there are some big moves to be captured as the market opens at 8am so long as you have the trend right it can be quite successful in my eyes,occasional though you get a few surprises! Stay well and all the best.

          3. I’ve always earmarked October-November as high volatility months whereas Jan-June (and Feb especially) are generally calmer for the FTSE and more sedate. Expecting just as wild a ride this October-November with crazy ups and downs that don’t seem to bear any logic. It’s just that they started a bit earlier this year. Is this going to be like 2011 where it tested the August low in October and then retraced 75% of the drop in the same month or will it go on to make a lower low? My uber bearish panic low would be about 5250. Seems unlikely at the moment but then how many of us would have thought sub-6000 being possible back in Feb? I’ll take it a day at a time.

          4. I wish I had all the answers ZZ but I think you are right,we will just have to play it by ear,It’s certainly very very difficult! I mean things like George Osbourne looking at ways to link Chinese and English markets,and the VW emission thing,….there’s just no way we can predict these things it’s almost like ….what’s the next crazy thing that can come around to alter sentiment and cause a 100 – 200 pt fluxuation one things for sure it will come out of the blue! Very best of luck.

  9. Jack2, you were saying yesterday, days you hold it doesn’t move more in your direction and then days you let go of the position it moves in your direction, agree its bloody typical. However when day trading, when to hold or not etc, I think I forget to look at bigger picture too, ie Weekly, daily, 4H time frames overall, then also looking at 30min/10min/5min etc

    For example I was observing the 4H candle just touched RSI below 30 and stoch just turning down at 8am, next candle went further down, hence thought to check if it will just create lower lows, until RSI moves back above 30 again and stoch back above again. Now when this happened this morning, FTSE was already quite bit up from overnight low…so wasn’t sure if to go long…but looks like should have, first thing this morning….

    1. I do forget to look at bigger time frames, that’s true. But yesterday I looked at 1 hour and it was telling me – it will drop to 16220, but I still didn’t hold because I was about to go out of the premises. I could have held but I hate not monitoring it. I need to learn to leave a winning trade whilst I am away, never tried it before.
      Like today, at 8.15 I was looking at Dax, and was thinking… gap, reverse, MACD got higher, it looks like DB, then I closed computer (school run). At 9 am in a car thinking – I need to get long, it was definitely a little pull back – opened computer 9.05 guess what – it’s all gone.
      Because it was all gone I thought: I will try short from pivot: spontaneous decision.
      There will be better set ups and we will try again. I think we need to write some motivation slogans on the wall like: “Be ruthless, hold your trade for half an hour no matter what” or “Trail your stop” etc.

  11. Nice chart Zigzaggar.
    Anyone any thoughts or plan for now for FTSE, not sure if it continues up now or pull back to 5950 region – any views?

    1. It could pull back from here, but personally I’m waiting to see if we do a third push up before shorting. Looks like it might be consolidating here. My ideal zone for shorting is 6030-6060, but I’m conscious the ball is with the bulls today (and could be all day).

        1. yup – it does look as though it could power on through. Think I’ll wait and see before pulling on the shorts. Up today – bit more up tomorrow – pull back Friday?

          1. yep, agree, was tempted to short, tried some small out BE, now will wait on side line as CAM level 6032 broken as “breakout long”…dam, why didn’t I long first thing this morning….always get the main direction wrong 🙁

    1. Ok, but even with a bit of benefit of hindsight, that would have meant running a 57.5 pt loss to take a 30 profit: ~2:1 risk/reward, but the wrong way round, not good.
      🙁

  13. Just an off the wall bet, but anyone think that platinum’s worth a long, re: the VW debacle?
    Presumably the world’s not going to give up on diesel just because of some scheming Germans, a bit of technical reading (dangerous 🙂 ) says more platinum in cats could be a short term fix.
    Doesn’t look too bad technically, either.

  17. I’m laying a cumulative small stakes, budgeted short, starting at 6050, more at 6070, 6090, 6110, 6130, 6150 with a stop at 6180, target new lows.

      1. Think it’s going to want to put in a breather if it’s going higher – it’s done 8 green hourly bars – but agree if it does want to do another leg up then 6150-6200 is possible/probable. Also agree with tmfp that it will fail – the guess is where?

    1. tiny divi today – doubt there will be any impact – it fell on the 6.5 one the other week. If it wants to go up it will , if it wants to go down it will. I think only double digit divis seem to perhaps make some impact.

    3. actually 40 was a good idea, Senu. temp support 37 held. I felt it wasn’t going to break down today, not with such macd.

  21. Hi Guys,just signed up not sure if I can contribute much,but enjoyed reading the board recently.Thanks to Nick for that opportunity.
    Re Platinum as worth a long,it looks a bit like an H&S on the daily,H with a hole in it… maybe.Hope everyone has a good evening.

  22. LOL, couldn’t resist taking +30 on my keep-for-ever 50 short, shame it missed the 70 by half a point.
    Not too happy about being open overnight these days.
    Good to be back, catch you tomorrow chaps.

Comments are closed.