Good morning. Two great FTSE trades yesterday which were both done off orders so even easier. Hopefully you managed to replicate them. The bulls are really struggling to hold onto the gains at the moment and the 10 day channels have started to head downwards again, which probably doesn’t help my plan for 6400 in September. Maybe 6300 on the 9th was the limit of the bounce from 5800…. The daily chart EMAs are still bearish so unless the bulls can pull away from the 6030 area if hit today we could be starting the next leg down. Its all still quite jittery over the uncertainty with US rate rises. Will it be this year, will it be next? Whats the real state of the economy, was the China wobble a blip or is everything slowing down? Its no wonder the market doesn’t know what to do! Anyway, for today, I can see a dip down to the bottom of the Bianca channels at 6030ish before a bounce back again.
US & Asia Overnight from Bloomberg
Most Asian stocks rose, following a rebound in U.S. equities. Consumer and material shares led gains.
Four shares climbed for each that fell on the MSCI Asia Pacific Excluding Japan Index, which was little changed as of 8:04 a.m. in Hong Kong. Japanese markets are closed for a holiday. U.S. stocks rose after Fed Bank of Atlanta chief Dennis Lockhart joined Fed presidents from San Francisco, St Louis and Richmond on Monday, saying he remains confident policy will be tightened this year as concern over turmoil in global markets touted by Chair Janet Yellen last week should prove temporary.
“While we may see a moderately positive day for Asian equities following gains in U.S. equities, it’s hard to see such gains being sustained amid concerns over Fed policy,” said Tim Schroeders, a portfolio manager who helps oversee about $1 billion in equities at Pengana Capital Ltd. in Melbourne. “The reluctance of the Fed to move from very accommodative policy settings seems to indicate how fragile the U.S. economy can be, especially if you look outside the labor market.”
With Fed Chair Janet Yellen slated to speak later this week, potentially providing more clarity as to whether to expect a rate increase this year, interest-rate futures indicate traders remain skeptical of a move in 2015. Odds of a hike at the next meeting in October are at 20 percent, according to fed funds futures, while the probability of an increase at the last meeting of the year, on Dec. 16, is 48.8 percent, down from 58.7 percent a week ago.
Regional Gauges
Australia’s S&P/ASX 200 Index rose 0.4 percent. South Korea’s Kospi index added 0.2 percent. New Zealand’s S&P/NZX 50 Index climbed 0.1 percent. Markets in China and Hong Kong have yet to start trading.
The Shanghai Composite Index gained 1.9 percent on Monday, extending its advance for a second day as President Xi Jinping headed to the U.S. for his first state visit.
Industrial and technology companies rallied on speculation they may see increased orders following Xi’s visit, which concludes with a summit with President Barack Obama on Friday. Deals announced before the trip include the first Chinese-made bullet-train project in the U.S.
E-mini futures on the Standard & Poor’s 500 Index were little changed. The U.S. equity benchmark index rose 0.5 percent on Monday. [Bloomberg]
FTSE Outlook
For today I am expecting the bulls to try again to make some rises stick, after an initial dip to the 6080 area. We have rising PRT channels on both the 10min and 30min with support in that area, so if it is tested then I would expect it to hold. If not then a decline to the bottom of the Bianca channels – 6020 and 6036 – is distinctly possible. Initially I am thinking a dip from the daily pivot area at 6119 to start the day off. That said, Asia was pretty buoyant overnight, though the ASX a bit less so – declining after an initial spike up. The bulls will need to break 6130 to enable a push higher today, ideally to target 6180 where we have the top of the rising 30min channel.
Wow what a sell off this morning, just one way huge sell off! No buying support whatsoever….markets still very jittery!
Repeat of last Tuesday. Went in too early and got hurt myself. 🙁
Screwed it up – shorted Dax at 10015. Closed at 9975. Whoops
Though shorted FTSE at 6119 too. Closed that too early as well – really didn’t think it was going to be such a bearish start
Very nice arrows this morning Nick for the dip and the bear certainly had legs and as it went past the 6020 which held as support in that area on the 15th so could see a potential reversal back up if the bulls make a play.
Nice trades by the way for yesterday – 52 & 65 pips!
Have a good day chaps.
Thanks ftseman. Pretty bearish start – thought that 6080 would have held better than it did.
Yes a little bit of bullish sentiment/stalling around 8:30/35 on the 5 min chart but it just kept going south – they obviously had eyes on your 6020
Interesting to see what it does now – back up would be nice 🙂
Yep, Seen nice calls by you Nick, results for September look very good indeed 🙂
Long 5988.
Wow, what a drop. I thought that 6020 level would hold and then 6000, which is did for 10 mins, then bam straight through. I have a feeling that we won’t be seeing 6000 for a while now.
Think its on its way to 5700 now. 9300 Dax, 1850 S&P
Stopped out.
Time to top up ISA funds, anyone know what’s the best ETF to buy for FTSE long term? For DIV plus growth, possible buy in batches, below 6K
If you want to leverage have a look at the one called LUK2 http://www.etfsecurities.com/institutional/uk/en-gb/products/product/etfs-ftse-100–leveraged–daily-2x–go-ucits-etf-luk2-lse
There is a SUK2 for leverages short ETF too, http://www.etfsecurities.com/institutional/uk/en-gb/products/product/etfs-ftse-100–super-short-strategy–daily-2x–go-ucits-etf-suk2-lse
Also which one to buy for DAX? would buy as Nick says at those levels for longer hold – sounds ok?
Or just open a spread bet using a futures contract – go for an annual one or June 2016 or something and then roll it…
http://www.etfsecurities.com/institutional/uk/en-gb/search-results.aspx?term=dax+etf
Long @ 75
out 🙁 where is tmfp?
I wonder.
Thanks for that link Nick. For today I think maybe have to wait for US if they buy or sell, for any possible buying support…otherwise if yanks sell, more bloodbath?
guys, what is the reason behind this sell off ?
I have no clue too
Yesterday people were saying for aiming for 6200 etc and a lot of DAX traders saying possible up today, so market tricked every1 to think long today and started mother of bear down today….typical, now we are talking 5700ftse and DAX 9300…
is this going back to 6020?
Was weak, wasn’t it?
Yes, may be dow will bring it.
just short the rallies I think, until 6000 truly broken and held up?
Missed all the fun due to some boring workshop in school.
Could the change of ftse100 companies cause this much selling, as some index biased funds would sell there holdings in the companies that go down to the 250. ? Just a thought?
Do you think US will drag it up a bit?
Oh, I think all fun it missed. It cannot go any lower, can it?
Just dragged those 21 points out of Dow. Cannot wait for 220. Trade progressed not the way I would want it to. 305 short, first it jumped to 344 then down to 284 (missed 280) That is me being short timed again. Got school now. GL for those who aim 220 if it meant to be.
I’m afraid I missed the good opp to hold.
oh dear
that’s school runs for you. I hate leaving trades open when I come out of the house.
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
What is LOD?
Common problems holding. Once you decide to hold and it comes back and even turns, but another time you come out and it goes further. Does anyone have problems with holding and closing?
what are you holding? your 220 still holding well 🙂 did you went long or what?
Never mind. I meant the overall problem of holding a position. I tend to jump out sooner.