Support 5961 5942 5928 5910 5872 Resistance 5997 6014 6053 6057 6062 6078

Good morning. It initially looked far more positive yesterday with the FT100 approaching the 6000 level with strong retailers taking the lead on the back of strong trading updates. However the fragile market was pushed lower once Wall Street opened on a sharply falling oil price and further global economic concerns.
The positive for the bulls is that the close was above 5900 and this has held again during after hours trading.
A prolonged weakening UK Pound could perhaps be the next area of concern so this is one worth watching over the coming days.

US & Asia Overnight from Bloomberg
Asian stocks rallied from a three-year low, tracking a rebound in the U.S. amid speculation a selloff that erased more than $5 trillion from global equity values this year had gone too far. Oil rose for the first time in 2016, while the offshore yuan strengthened.

The MSCI Asia-Pacific Index climbed the most in four weeks as benchmarks in Japan and Hong Kong added more than 2 percent. U.S. index futures advanced after the Standard & Poor’s 500 Index rose for a second day. Treasuries took back some of the last session’s gains, which were spurred by crude’sdecline to below $30 for the first time in 12 years. The more positive sentiment diminished the appeal of haven currencies, with the yen retreating as Australia’s dollar appreciated.

Concerns over China and oil’s descent have dominated markets in 2016, with global stocks down around 6%The S&P 500’s rebound from its lowest level since September has provided a shot in the arm for equity markets, which have been beaten down in 2016 amid concern over China’s ability to manage its slowing economy and the impact of sliding crude prices. The panic seen in financial markets last week has receded since Chinese policy makers intervened to halt the yuan’s drop to a five-year low, reducing the risk of a currency war. A report showed the nation’s trade surplus unexpectedly widened last month as exports improved.

“We’ve seen some stability in the U.S. and other markets but sentiment will really depend on what’s happening in China with regard to the direction of their currency and economic data,” James Lindsay, an Auckland-based fund manager at Nikko Asset Management Co., which manages $160 billion globally, said by phone. “If we see continued weakness in the yuan, that will have a huge flow-on effect for the rest of the world.”

Stocks
The MSCI Asia Pacific Index climbed 2 percent as of 2:57 p.m. Tokyo time, halting a seven-day drop that marked its longest run of losses since August. Japan’s Topix index rallied from its lowest level since September, advancing 2.7 percent and Hong Kong’s Hang Seng Index rose 2.3 percent. Futures on the S&P 500 added 0.8 percent, after the benchmark gained 0.8 percent on Tuesday.

China’s trade surplus swelled to $60.09 billion in December from $54.10 billion in December, official figures show. Economists expected $51.3 billion, a Bloomberg survey showed. Exports fell 1.4 percent from a year earlier, the smallest decline since June. In local-currency terms, shipments increased 2.3 percent.

Commodities
West Texas Intermediate crude rose 1.2 percent to $30.81 a barrel, after slipping as low as $29.93 on Tuesday. It’s still lost 17 percent since the end of December.

American oil supplies fell 3.9 million barrels last week, the industry-funded American Petroleum Institute was said to have reported late Tuesday. Inventories probably expanded by 2 million barrels, according to a Bloomberg survey of analysts before the Energy Information Administration report Wednesday.

“The big picture for the market is still oversupply,” David Lennox, an analyst at Fat Prophets in Sydney, said by phone. “It’s going to be a tough couple of months for prices, $30 oil is very painful.”

Copper climbed 0.9 percent in London, rebounding from its lowest close since April 2009.

“Prices were boosted by Chinese exports that were better than expected,” said Jia Zheng, a senior analyst with East China Futures Co. in Shanghai. The rebound will probably prove short-lived as demand remains weak in China, forcing some fabricators to suspend production before the Lunar New Year holiday in February, she said. [Bloomberg]

FTSE Outlook and Prediction

FTSE 100 Prediction
FTSE 100 Prediction

6015 and then 6055 are looking like the immediate resistance areas and if we repeat the pattern of the past few sessions we will rise this morning then drop this afternoon (and then probably bounce overnight again). We do have R1 at 5997 initially which will be the first hurdle for the bulls to jump, and with the price pushing above the 10 day Raff and Bianca channels I think that we are more than likely to have a dip back to within them at some point. Its almost like its being pumped higher and getting a bit ahead of itself….. The Dax rose above 10000 yesterday and has stayed there for the moment, and with gold dropping back below 1100 (closed that short far too early yesterday!) the general vibe is short gold, long equities. However, I wouldn’t be surprised if we get one more dip down, which would be worth getting long on. So, its watching 6000 really to see what happens there, the bulls will certainly be keen to break and hold above that this morning. Just looking at gold and interestingly there is decent support at 1082 on the daily where we have the 25ema. If gold does rise from this level then we might well see a dip in equities again, which would keep FTSE below the 6000.

101 Comments

  8. Tell you what Hugh,I’m still struggling with trading my opinion though like Tmfp said……Yday I got over 64pt up on that FTSE short but was convinced it was going to drop further,I ended up taking +31 and about +20 on Dax.could of been much more I had some size on too.its a game of inches this as someone said on a video I watched.

    1. Hi Anstel – I wouldn’t get to hung up about – just as an idle muse – if you put some arrows up on a 1min / 2 min / 3 min chart of where you think it’s going to go and then a look at what actually happened – it would indicate `if your thinking is sync with rhythm. Guess that’s why trading can be so time consuming – it can require minute by minute analysis.

    1. emu ind prod was a bit worse than expected from the german and french no’s. could have been selling the rumour on that.

        1. Hey no worries about being cynical,I’m hearing you loud and clear,we should get some t shirts printed :0)

  10. Good Morning All,

    Just one trade for the week so far. I have taken a short on Dax at 120 with a 20 point stop. Risking yesterday’s profit on this trade. System target at 10030 but watching it.

    1. Anstel, I need to be careful on any trade that I take because the outcome is random. I always trade with a stop so even if turns around I get out with a small loss.

        1. Hi WSF, the outcome of the trade is still random but the risk is managed and losses fixed only if you don’t move your SL 🙂

      2. I just find the Dax the most dangerous RJ,if I thought it was completely random though I wouldn’t be trading,there is an edge that can be taken,the one percent have that edge but we are still looking at the moment imo.GL RJ.

        1. Every trading instrument is dangerous if you don’t have an exit plan.

          You definitely need an edge, I agree but it doesn’t guarantee winners on every trade.

          If we take Nick for an example, Nick is successful in making money and has a good trading edge but still some of his trades are losers, the reason being outcomes are random.

          An edge gives you a higher probability to win but doesn’t guarantee it.

  14. Well the opportunity of S at 6014 seems to be fading quickly as we have lower highs with Support at 5985 – which if the pattern is to repeat – can expect this to be broken <5982

    1. I think we trade randomly here today. I just had a long from 75 area dax, +10 only, but closed it now. There’s a risk of short in the air but when or will it or won’t it… I wish I held my short 10138 from the morning, once again, couldn’t get my guts: it’s against ema, hate trading against ema.

      1. Hey Jack first time I’ve seen you since last week,I left you a little message on I think last Friday’s board,have a look for it,it was the day you said you felt a bit fed up.

  17. Hi Hugh

    Sorry, didn’t have time to reply to you yesterday. I never look at Shell A or B to be honest, however looking at it now, 1236 is looking good for a reverse trade – the low from the 2008 crash. I’m also watching BP for a breakdown trade, I have a short order at 315. Always need to be careful shorting divi stocks though as the divis add to your losses if it doesn’t go your way.

    WPCT, got out of this with 2 points of profit. Lucky as its dropped again today. The NAV just keeps falling, 92 I think now. He has a good track record, one for the long term. I can see it trading quite low for a while until all the early growth companies IPO and really start growing. The positive sentiment seems to be dissipating so there will be some good opportunities to get more at a decent discount to NAV.

    1. Hey Dan,Think there is some dilution planned for WPCT as he is after more money to invest with,so that is another reason to wait a bit for a buy there.

    2. Hi Dan – Shorting BP :-/ not sure about that TBH . There have got to be better things to have a go at I would have thought if you looking to Short something.

    3. True about BP. But the price looks like it will breakdown and order won’t be filled if it doesn’t. Always good to short on fundamental reasons – falling oil price etc rather than just price.

      WSF, has he not done that already? i may be wrong though.

        1. Always nervous of rights issues – cash price always seems to touch rights issue price at some point.

  18. Afternoon all, seems to be consolidating for the last 2 hrs. Bit boring really. Any ideas for post Dow open. ?

    1. Yes,although on the FTSE you could argue it was tradeable as a sideways range and and it could still be in it (eg Ftse 10min chart),I guess the problem was expecting the 85 area to break downwards the way the Dax did,that was my error anyway,but since it is still below the a.m high it could still go either way I suppose,weird that my best trade today was a scalp long on the Dax.

  20. Trailing stops and lunch doesn’t seem to go well 🙂 Stopped out at 10080 on the Dax.

    Last trade of the day Dax Long 10091 – 11 point Stop. Expecting 10200.

    If Stopped out will finish the day with 34 points profit.

    1. First part was anyway. Had resistance att he 6015 area, though they might have pushed it a little higher though (6050). Anyway, until oil bottoms out and rises I think FTSE will struggle to push higher

      1. Just my thoughts Nick,I think maybe springtime we will see a big upward move in oil prices and that will push up the indices,after all it is an election year! Got to keep the voters happy .

  28. I know what you mean it’s hard to find any decent levels at moment, or is it just me. Trouble is I only do small stakes.lol

    1. My problem is that 20 mins on Monday has me expecting it to stop and reverse fast short of every logical target 🙁 FWIW though Monday is a holiday in America,so that should discourage some buying.

        1. I fully expect a visit under 16000 on the Dow at some point check out the 200 sma on Dow weekly chart chaps

          1. I don’t mean necessarily tday but I think it’s a real possibility at some point in the next month or so.

          2. 15754 ish,that would be over the Aug low and look good to start a climb from.I’d like to see that 200 tested this week and cant see why it wouldnt break.I suppose it depends on what that rally was really about and like you said it all looked different not so long ago.The 8 hr chart looks good to go down too,really just that odd event and the follow on from it that make the day chart seem undecided on going down…maybe.

    2. 5893 (if it gets there) may be worth a stab – quite alot of support down in the area 5892 – 5850

      1. This is setting up nicely for a potential chunky drop at 1am if the A50 drops back the 300 it gained in the last 24 hrs.

          2. we can have downward chart arrows on the front and upward chart arrows on the back with smilie faces superimposed over both.:0)

      2. wonder if that 19.02 30 points was Shorts closing in fear of another “defence” of 16200 like the last one.

  31. anstel, I found your post. Indeed I didn’t come here often as now I trade sneakily. My other half is working from home now (at least this month) which make trading very tricky. That’s why I was probably depressed on Friday. It’s hard to trade when someone is at home and trying to talk to you. I do manage to take short trades which is what I usually do (I wish to change it though). Thanks for medical advice, I do know a lot about that and took like 5htp in the past, it’s cool. I think it’s just January. 🙂

  32. Almost touched 16150 there 🙂 didnt expect to see that today.Looks like 9700 Dax is back on the cards too.

        1. Tell you what let’s push it up abit now and suck some punters in for the drop at 1am lol! Let’s Have another Cuban and a malt brandy while we are at it,oh what fun!

        2. Evening Chaps,
          Well disappointed that the 6014 (S) missed by 3 points & then my other order was (L) 5861 – filled & then got promptly frazzled..
          Volatility rules.
          IG Josh Mahony has 5768 as his “sometime” price.
          This is the base of the neckline if you look at the daily chart H&S. I still haven’t come up with a plan if it closes below the 5768 level.
          http://ee.md.it-finance.com/ProRealTime_V10_2/display_chartimage.phtml?name=vtmpqorsqvlpll12dxehy6wrm&type=png&purpose=file

          1. Thanks Hugh,if that was upside down I wouldnt spot it as an inverted H & S,be interesting to see how it ends.

    1. I think if you hold it you will make money,just get passed China’s open,I’m expecting a drop when China opens,just a hunch,not based on anything other than what I have seen today.

    2. 5850 is a good entry –
      Going to be a big GAP tomorrow if it remains at these levels . Cash Close 5961.

      1. Your chart has me squinting at that lot in 3 mins and 5 mins for H & S ‘s now 🙂 Looking forward to later.

  36. Ice cream,choc ice, get your peanuts, now would be a good time to go to the toilet,it will allow plenty of time to settle in for the main event in 1 hr 35 mins,…….Good Luck Everybody.Nick you should charge double time for us using the site at this ungodly hour!

  37. Looking at the A50 chart it looks like it could drop on open,could any of you technical chart chaps give us some clues,I just think a dip first but I’m not skilled with charts like some of you chaps thanks

  38. Morning chaps,it’s the nightshift checking in!well done Coombsy I hope you held it and you made some money…….I reckon you gritted your teeth,it certainly was a bit edgy but well done .i hope you get 50 – 100 pts out of it. Going for some shut eye.

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