Good morning, I hope you had a nice weekend. The FT100 opened strongly on Friday but at 10:10am with options and futures expiring the market took a negative tone. The “quadruple witching” along with the addition of index rebalancing lifted volumes and volatility sending most shares negative. The laggards of the last few days which contained oil and commodity sectors managed to counter this move and were the one bright spot on a negative day. Oil and commodity prices are still driving the market and in after hours things again turned negative to hit a low of 6000. The shorts that we had placed did well, though moving the stop to breakeven on the FTSE was premature, but the Dax and S&P ones delivered well, as did the gold long. This week is likely to see pretty low volumes, and possibly a bit more volatility due to that and it remains to be seen if and when the Santa Rally will start.
US & Asia Overnight from Bloomberg
- S&P 500 futures rise, signal rebound for U.S. stocks
- Asian shares poised for first back-to-back losses since 2002
Asian stocks fell as a stronger yen weighed on Japanese exporters and Toshiba Corp. tumbled on reports it would post a record loss.
The MSCI Asia Pacific Index declined 0.4 percent to 129.24 as of 9:21 a.m. in Tokyo. Japan’s Topix index dropped 0.9 percent after the yen strengthened 1.1 percent against the dollar on Friday. The regional benchmark gauge is down 6.3 percent this year, on course for its first back-to-back annual declines since 2002, as a commodity rout deepened and investors speculated Chinese authorities will need to increase stimulus to support economic growth. The loss would be more than twice that for the Standard & Poor’s 500 Index, which has dropped 2.6 percent in 2015.
“The problems that have been affecting both markets and the global economy for months remain in place,” said Stewart Richardson, chief investment officer at RMG Wealth Management in London. “Commodity prices remain low, corporate debt remains too high and emerging markets continue to struggle. Furthermore, although Federal Reserve Chair Janet Yellen continues to characterize the U.S. economy as strong, it does appear to be slowing down.”
Toshiba sank 8.9 percent, on course for its lowest close since 2012, after reports it would post a record 500 billion yen ($4 billion) loss in the current fiscal year on costs related to an accounting scandal, layoffs and sales of business units.
South Korea’s Kospi index gained 0.1 percent. Australia’s S&P/ASX 200 Index rose 0.3 percent, as did New Zealand’s S&P/NZX 50 Index.
Asian equities retreated Friday as investors shifted from relief after the U.S. Fed’s interest rate hike to disappointment over plans by Japan’s central bank. The Bank of Japan modified its stimulus program to lengthen the average maturities of government bonds it buys and unveiled new measures to purchase exchange-traded funds. Governor Haruhiko Kuroda said the changes were designed to make it easier for the BOJ to maintain its current policy and didn’t constitute additional easing.
The safe-haven yen held most of its biggest gain in more than a week Monday amid a continuing rout in the price of oil. West-Texas intermediate crude declined 0.7 percent after posting a third week of losses to trade at the lowest level in more than six years. Energy shares in the regional Asia equity index gained 0.3 percent.
In Hong Kong, futures on the Hang Seng and Hang Seng China Enterprises gauges lost at least 0.5 percent, while those on the FTSE China A50 Index were down 0.2 percent.
Futures on the Standard & Poor’s 500 Index rose 0.3 percent Monday. The underlying gauge closed 1.8 percent lower on Friday, completing its worst two-day slide since Sept. 1. The U.S. equities gauge extended declines in the final 15 minutes of trading and volume soared because of a quarterly event known as quadruple witching, when futures and options contracts on indexes and individual stocks expire. [Bloomberg]
FTSE Outlook and Prediction
So here we are heading into Christmas week. I expect we will get low volume and increased volatility this week and there is still the possibility of a rally, though I think 6500 might be a bit of a big ask at this late stage, some amazing news not withstanding. Last year the run of daily rises started quite late I seem to remember. However, its not a great sign that the bulls failed to hold onto the recent rises after the rate rise announcement. 6001 looks like its worth a long to start with and the bulls will need to make that stick and break through the daily pivot at 6035 to push higher towards 6100. The long timeframe moving averages are pretty bearish still and the bulls will need to break 6100 today or tomorrow to make inroads into turning them round. On the bearish side, if 6000 breaks then a trip to 5900 again looks likely, with 5808 below that were we have the bottom of the 20 day Bianca. 5913 is the 10 day Raff so I think that this area will hold if we do drop again today.
Morning chaps.
A brief visit to the 5000’s and all is well again for the bulls? I beg to differ, heavy short into this rally at 60 and 80 so far, more at 6100, stop at 6145, last throw of the dice before Christmas.
GL all.
morning. Ending up taking a 10 loss amazing. Long from 90
Morning all,this is looking very familiar 🙂
out for 23
Morning All – Well both my Shorts – stopped out !
Tempted to pop another in at, like you say at these levels …
Not convinced just yet …
Beware the magic DOW rally inevitably coming up if you’re using tight stops Hugh.
What do you think tmfp ?
6115 the high
Think I’m to late for a scalp now back to 6085 support.
6077 ?
6065 ?
May just leave it as I have to go out in a moment for an hour or so..
( I Keep thinking the FTSE likes the 6160 – 6180 area )
See it’s the miners that are putting these gains in
Glen+5% AAL+4% BHP+1.97% amongst other beaten up stuff 🙂
6112 was the top of the 20 day Raff. Shorted at 6095, stopped at 6115 (typical), but went in again at 6110 which is still running.
Good for you Nick.
As you may have gathered, I’m in the dead cat club, but the bloody things have nine lives….
Book squaring going on Hugh, that sector has made the shorts a lot of money recently.
I’m just manic bear, don’t listen to me.
having a go at 108
Yeah I got a bit more short at 10, in for several pounds in for a lot, to coin a phrase.
Nice top forming on DAX, if they get properly below 720 next time, could drag us into uncertain territory.
Not following DAX! Should be lower than 103!
Sod’s Law, custard.
Got to get a bit of momentum going yet, but a chink of light there, or is it a train coming?
ECB turned the taps off for lunch?
taken 10 and will go again!
Yeah 96 held ok, I took 10 off a long, just being patient until we see what effect this has on the DOW after their appalling Friday close.
Well the FTSE 100 leader is ITV on a rumour from the Daily Mail so not really quality macro.
lol
ascending triangle on the 10m ftse so could push on from here this afternoon…
Probably bounce off 96 prev low this time, but looking a bit brighter in the bear camp.
That’s three rejections of 15 and the DAX looks pretty uninspired. 60pts would have been in the bank if I’d shorted 720 like I thought….
‘If’ and ‘would have’, the trader’s enemy. 🙂
“If” I hadn’t been lashed on Friday I “would have”…….
Afternoon all, I’m not sure that I’m absolutely certain has oiled up his reindeer properly. With this in mind, and the fact that everytime tmpf posts I nearly wet myself I’m manually trailling with some stops.
Still think 6300 though!!
I won’t tell you about that dream I had then chippy, 5200 was the theme 🙂
You mentioned it the other day!
looks fragile
in at 10
I’m not sure I’m on the right board here 🙂
out for 20
in again 99
Looks like classic consolidation today before moving north. Id rather be long than short at the moment
Roll up roll up, place your bets now, up on Santa’s sleigh or down on the bear slide. Wish it would move out the range. Zzzzz
All a bit flat at the moment. Still think it will pull back to 6050 level before up to 6200 Xmas time.
Not convinced at all this is going long. Charts indicating pullback.
I’d like to see the DOW have a go at 17100 again, see if it holds.
A little bit of red might grow into a big bit of red.
Potentially good timing (for me), the MHH coming up and the DOW looking as if it wants to have a look at Friday’s lows.
decisions whether to leave this overnight now. DAX looks like it wants to go south
Might be a rally before the close, but I’m staying with it after hours. DOW isn’t very impressive, I’m not going to talk my book and say 169’s but….
Hi tmfp, looking for a bounce to short? 😉
I can’t go any more short Senu, or they will be sending round the margin van 🙂
Looks a reasonable idea, but I’m biased.
cant see one myself
I want my points back from Friday!
mm… missed it 🙁
5988 last Friday Senu
yes, dow will do the remaining ..
Bull shit rise evaporating then!
Yeah, consolidated well, didn’t it?
lol
It’s not clear this evening for me where this is heading in the short
term.
🙂 When is it ever !
The low this afternoon of 6016, may have been a higher low from Friday
evening’s base of 5990.
But everything looks a bit jittery.
As I’ll be off out early tomorrow I’m going to place the following
orders.
Short 6112
Stop 6130 (18)
Targeting T1 – 6094 T2-6076 T3 – 6058
Reaction points may be 6087 – 6112 – 6125 – 6135 -6140
Long 5982 (S2)
Stop 5972 (10)
Target T1 – 5992 T2 – 6002 T3 – 6012
Targets Produced by Stop Loss (3:1)
Hi – Lost the plot a bit whilst it was doing nothing.
Wonder if this is an opportunity to square out some of the earlier RSI Trio on FTSE.
Lowest was about 6044.
Got a Trio Long here at about 6065.
Looking forward to tomorrow’s trades – I’m thinking at the moment – it’s going to be a Long at 6042 (PRT Daily Support ) or Short 6182.
How about short 5980, long 5200?
Out of half of it breathe
closed mine +55
night all
Nice one custard 🙂
GL.
got back my winnings from Friday. Would love still to be in but always tomorrow and you never know we could have a start like this morning!
I wouldn’t mind cashing out too, but I have to wait now to see if 094ish holds on the DOW.
All signs are that it won’t imo, and it could get a bit messy if that goes, with a break of 17000 possible today.
Anyway a rally off the current lows was pretty much on the cards, so all square at 32, no long though, looking to reshort equiv 17220ish, probably a bit at 55 and some more at 60 for another try at breaking 17100. Stop DOW base 17270.
Oh well looks like it held again. They telegraphed that closing run up a bit so out of the short with no damage.
Will we have another attempt at 6100+ in the morning, I wonder.
Bear side’s not finished for Christmas yet, too many complacent longs expecting a last minute rally.
Goodnight all.
Long Dax, Dow and FTSE. Till Thursday
Looks like a nice pick. All in good profit. 🙂
120 pts in 30 mins
Yeah 🙂 only need to average a 100 odd a day to put in a positve year on the Dow now.
18k 😉
Is this the last dip before year end rally ? I have a long on Dow from 165. Too tempted to take profit. What to do ??
tmfp’s dow stop is hit. GL
Tmfp would have made a killing shorting FTSE.
OK I have closed my Dow long for 135 points nice profit. I didn’t like the 21.39 1 min candle. All the charts suggests a good upside. I won’t have time to trade tomorrow. GL all !!
It’s not clear this evening for me where this is heading in the short
term.
🙂 When is it ever !
The low this afternoon of 6016, may have been a higher low from Friday
evening’s base of 5990.
But everything looks a bit jittery.
As I’ll be off out early tomorrow I’m going to place the following
orders.
Short 6112
Stop 6130 (18)
Targeting T1 – 6094 T2-6076 T3 – 6058
Reaction points may be 6087 – 6112 – 6125 – 6135 -6140
Long 5982 (S2)
Stop 5972 (10)
Target T1 – 5992 T2 – 6002 T3 – 6012
Targets Produced by Stop Loss (3:1)