Support 6019 6009 5970 5952 Resistance 6035 6048 6063 6125 6200

Good morning. Well that was a frustrating day. Got the movement right with up, down then up again, but the stops got hit on all the trades – shorts got stopped out then the 5975 long got stopped out, before it rallied 100 points. The joy of bear market trading with increased volatility. Anyway, its back above 6000 now so could see a little bit more upside in the short term before another leg down. The Bianca resistance is 6125 (10day channel) first, then 6200 for the 20 day. Can the bulls add 100 today to hit that resistance? Yellen was still inferring a 2015 rate rise during her speech yesterday.

US & Asia Overnight from Bloomberg
Asian stocks rose after Federal Reserve Chair Janet Yellen said the central bank is on track to raise interest rates this year.

“Most FOMC participants, including myself, currently anticipate that achieving these conditions will likely entail an initial increase in the federal funds rate later this year, followed by a gradual pace of tightening thereafter,” Yellen said during a speech Thursday in Massachusetts. “But if the economy surprises us, our judgments about appropriate monetary policy will change.”

The MSCI Asia Pacific Index added 0.2 percent to 125.11 as of 9:11 a.m. in Tokyo. The regional benchmark measure has fallen 15 percent since the end of June, on course for its worst quarter in four years, as the Fed prepares to raise rates with financial markets rattled by concern slowing Chinese growth.

“The framework the Fed has provided is a reasonably comforting one,” Shane Oliver, global strategist at AMP Capital Investors Ltd., which manages $112
billion, said by phone. “Of course markets are unusually twitchy at the moment and that’s not going to go away any time soon. The Fed will only be raising rates when they’re confident growth is on a sustainable track. It’s a more positive message.”

New Arrows
Japan’s Topix index added 1.1 percent. Prime Minister Shinzo Abe unveiled a new economic growth target Thursday and vowed to halt the nation’s population slide. The premier laid out three new “arrows” of his Abenomics plan: a strong economy, increased support for families with children, and social security. The Bank of Japan’s main inflation gauge dropped into negative territory, data showed Friday, as weak domestic demand and plunging oil prices wiped out the impact of Governor Haruhiko Kuroda’s unprecedented monetary stimulus.

New Zealand’s S&P/NZX 50 Index gained 0.3 percent and Australia’s S&P/ASX 200 Index climbed 0.9 percent. South Korea’s Kospi index rose 0.2 percent.

Slower demand from China, where growth is projected to drop below 7 percent this year, has helped push down commodity prices, sapping already low inflation in the U.S. The Fed’s preferred measure of prices rose 0.3 percent in the year through July and has been under its 2 percent target since April 2008.

Resuming Schedule
Yellen is resuming her planned schedule after feeling unwell toward the end of her speech, Fed spokeswoman Michelle Smith said in an e-mailed statement. The Fed chief felt dehydrated, Smith said.

Futures on Hong Kong’s Hang Seng Index lost 1.6 percent and contracts on the Hang Seng China Enterprises Index of mainland firms listed in the city slid 1.8 percent in most recent trading.

E-mini futures on the Standard & Poor’s 500 Index added 0.4 percent. The underlying gauge, which closed before Yellen gave her speech, declined 0.3 percent. [Bloomberg]

FTSE Outlook

FTSE 100 Prediction
FTSE 100 Prediction

We have the daily pivot at 6009 today and looks like it would be worth a long there, for a possible rise to test the 6075 area today. There is also a chance that we see the 6125 10 day Bianca level which could well be worth a short, though it’s probably going to hit later today so you may not want to hold that over the weekend. There is a possible rise on the Dow brewing to 16600 with a few gaps to close on the way up also, so that may drag the FTSE up with it while it climbs another 300. That was certainly a decent bear market rally last night, just a shame that the 5975 long was stopped out just before it started. With hindsight needed a 30 point stop but that felt a bit wide…. very annoying sometimes! Anyway, for today I can see last night bullishness continuing with a rise towards 6070 so favouring the long side for the moment. Buy the dips today!

20 Comments

  1. Yesterday all indexes breakout short, today all indexes breakout long start….amazing volatility, but big nerves needed to manage to hold out for each swings….recently trend is down overall, but them bear market rallies are much wilder…nothing we can do, except get used to it, and expect higher levels for shorts and lower levels for longs. I have checked when I have a feeling this might be a top, it still continues +20/25 then does actually turns…maybe should place order another +20 or so when I feel a top is near…maybe but risky like last night at 8pm it just shoot up…no idea on what

    Anyway agree Nick, today 6125 possible, also close to weekly pivot test…GLA

  2. Hi, I missed yesterday, was chilling out. Today’s Macmillan support so going to those coffee mornings, no trading. By the way, good arrows yesterday, Nick. Not sure why you lost on those trades when 61.8% was 5953 it had the right to get there. Bad luck with short because of upthrust. But never mind, there were good arrows for yesterday, please keep up. 🙂

  3. Nick – so you reckon we are in a bear market now?

    I must admit I have found it very hard to make much money since early August as the volatility is ridiculous, thankfully was 95% cash across my whole portfolio so missed most of the recent fall out. Strangely I am not tempted back in, yet….

  4. I think might have stabilised the rise for now, but it just wont fall down now, instead might steady for a bit and then another push up? ie if DOW wants to test 16500 today then might drag rest of indexes up for stop hunting then fall in afternoon? Anyway Friday, so small stake trading in this crazy market…don’t want to hold any position over weekend.

    Any thoughts anyone?

    1. mali7
      could i ask you something please
      did you sign up to the live trading? if so why did you leave it?
      or are you still a live member? what was the difference ?
      thank you

      1. Hi PaulHamley,
        Live trading room is worth it and its got some great traders there who put in a comment now and then…you will know those easily…
        Anyway I took a break for Holiday end of August, and just felt quite relaxed not trading at all! Hence slowly slowly getting back and reviewing what I have learnt and trying to figure things out more myself for a bit. I feel this break giving me sometime to reflect and think and test what I have learnt over last 6 months, it’s so easy to fall into the race to try to trade every move and every day….but as they say the market will always be there!

        My plan is to hopefully re-join live trading from next month.

  5. 15 min looks as though it could have topped out. 2-hourly has plenty of room for more up. Am doing a tmfp – shorting in increments as we go up – started at 6105 and will add at 6160, 6210 and 6260. No idea if we will see these but I do know it’s highly likely that we’ll hit 6012 – my target – probably next week or sometime in October, so will just sit it out until we do. Can’t rule out 6380s if it wants a really strong shorts squeeze. Let the roller-coaster begin!

      1. Yeah – I know Jack – that’s why I’m shorting in increments. Am really only doing swing trading rather than day trading so prepared for it to go against me. You just never can tell when it decides to top out these days. Am fully prepared for a more up this afternoon/evening, then we’ll see next week. If it decides to come down this afternoon then I won’t complain. 6100+ was the earliest it was going to top out hence my first increment there.

        1. It’s on 61.8% now on FTSE so it may go down. Not right away, but in couple of days. I will be surprised if it’s not. But I am not guessing markets any more, it’s hard and costly guessing the tops, I only take day trades if I see suitable set ups. GL

        1. Hello Mail7
          thank you for your comments
          just pushing you a bit on your points, Nicks trades appear to be very good, were you not able to make money on the live room?
          I assumed he told you when a trade is supposed to be take?
          sorry if i did not understand.
          thanks

          1. No worries….
            Nick is patient, calm and sits out when need to, I still lack that! Hence there were situations where I took own trades or tried other traders trades etc etc which just confuses things and makes life more difficult. However learnt a lot so idea is learn from mistakes, every1 has to learn from mistakes, there is no other way….anyway if you stick to plan then all will go well, there are days where both trades fail and you just shouldn’t trade more just to get them back for the sake of it…rather be patient… However as can be seen from Nick’s results, just sticking to plan of 2/3 trades a day and you have 4-5% growth a month – that’s great!

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