Support 6081 6077 6067 6028 5955 Resistance 6148 6183 6191 6236 6329

Good morning. Pretty quiet in the end yesterday as the US was closed for Labor Day, not really a greta surprise. We got the rise initially to 6120 as expected but then it was just a slow drift down and hover around 6070 for the rest of the day. On a positive note the FTSE seems to be holding its support above 6000 at the moment so if there is some catalyst for a rise we could be in a good spot for that – maybe something like not raising interest rates?! We are just above the daily pivot as I write this at 6081 so we may get a rise today back above the 6100 area.

US & Asia Overnight from Bloomberg
Asian stocks rose, with the regional benchmark index climbing from its lowest close since 2012, as Japanese shares advanced and investors awaited trade data from China.

The MSCI Asia Pacific Index added 0.1 percent to 124.25 as of 9:07 a.m. in Tokyo. Japan’s Topix index gained 0.3 percent after a revised report showed gross domestic product shrank less than previously reported. While the Shanghai Composite Index lost 2.5 percent on Monday, traders took solace that the slump wasn’t deeper, driving European shares higher. Data Tuesday are expected to show further declines in Chinese exports and imports, potentially reinforcing concern over decelerating growth there and its impact on the global economy.

“While there are opportunities out there, there’s no rush to pick the bottom at this stage given prevailing uncertainties over the slowdown in the Chinese economy and the timing of the U.S. interest-rate increase,” Tim Schroeders, a portfolio manager who helps oversee about $1 billion in equities at Pengana Capital Ltd. in Melbourne, said by phone. “Investors probably want to sit tight and watch developments closely.”

South Korea’s Kospi index rose 0.4 percent. Australia’s S&P/ASX 200 Index added 0.3 percent, as did New Zealand’s NZX 50 Index. Markets in China and Hong Kong have yet to start trading.

Uncertainty over China’s outlook has stoked market volatility the past month, with the country’s surprise devaluation of the yuan Aug. 11 igniting a selloff in the riskiest investments. China’s foreign-exchange reserves fell by a record last month as the central bank sold dollars to support the yuan after the biggest devaluation in two decades spurred bets on continued weakness.

E-mini futures on the Standard & Poor’s 500 Index rose 0.9 percent from Friday’s close. U.S. markets reopen Tuesday after the Labor Day break.

Futures traders are pricing in a 30 percent likelihood of an increase in U.S. interest rates this month, with the Federal Reserve set to announce its next policy decision on Sept. 17. [Bloomberg]

FTSE Outlook

FTSE 100 Prediction
FTSE 100 Prediction

Could be an interesting day today with the US back from the holiday and the Nikkei having dropped 2.4% as I am writing this – though the FTSE Futures have stayed around the 6085 area. We are just above the pivot and there are some bullish looking charts for today, so I have gone with a dip and rise as the play for today. 6067/6077 looks to have fairly decent support, though if that breaks then a decline to 6028 is pretty likely, where we have the bottom of a rising 30min channel. Below that the bottom of the 10 day Bianca channel is 5955, and a break of 6000 would certainly spook the bulls. Its all eyes join the Fed really and a lot of the big money is probably keeping their powder dry waiting for a clearer signal rather than taking a punt at the moment. Generally for today I am expecting a rise towards yesterdays high at 6115, and possibly higher – I think we might even see nearer to 6187, especially if the US is buying mood after their break yesterday, where we have the top of the 10 day Raff and a major PRT resistance line. The big hurdle for the bulls to jump after that will be at the 6236 area currently, where we have the 25ema on the daily chart and likely to act as resistance.

104 Comments

  1. Morning.
    Got it all wrong this morning, shorting 🙁
    Having one last go at 70 and then giving up to a trend day.
    Should have realised it would be lala land again after the long weekend…”What China?”

    Dax looks in the mood to try and take out its previous highs around 10400 which gives them room for more upside. Whether that’s going to be reachable today is debatable.
    In a wide range market like we are now, 6000-6250, it’s very easy to lose money trying to make stuff happen.

    1. Minor salvage, took 15 on the short , suppose better think about longing around 50.
      I doubt it’s come all this way to roll over now.

      1. “I doubt it’s come all this way to roll over now.”

        If you find yourself thinking like that to justify trading, just turn the computer off.

  2. Hi tmfp,

    Yea a bad day for me aswell, I wonder what wave this is? probably looking now for a long entry @6100 even though that looks unlikely

    1. Hi Pete, yeah the problem is you don’t have to do much wrong in this sort of market to lose a lot of money.
      I’m cutting right down on my trading until we get near the extremes of this range, there are too many variables, including the “invisible hands” that Nick’s just retweeted about.

      What wave is it? LOL, f*cked if I know, just make sure it isn’t the one that drowns you.
      Good Luck, be careful and don’t run losses unless you’re pretty damn sure. And then don’t run them anyway.
      🙂

  3. Blimey the tides have turned, I’ve had a great start bagging 70 points on the rise. And you guys are in a fluster. Makes a change normally the other way round.

    1. Good for you mate.
      With the benefit of hindsight, shorting was a sucker move, but there was nothing I could see that indicated 6160+ by 9am.

      Presumably this is the start of an attempt on the 6260 area, so I guess we should buy the dips this week. Woopee.

  4. Morning All,
    Wonder if it’s safe for the bears to come out now..!
    Went Short 6130 – RSI Trio thereabouts & Yesterday’s Hi …hedged out 6154 (L) – closed.
    Charts looking a bit more southerly now…

  5. Yea tmfp, its a serious market one day it will make you the next it will burst you, I dont really know how to read it, I honestly thought it would have tested the lows this week and then would have been a good buying time, but 6400 is looking more likely now

  6. Perfect day for Nick. As for me, the train has gone because of 1st day of school today and when I was back it’s gone. Nothing to do now, wait for a pull back or something?
    Yesterday it formed a narrow channel on Dax so I thought if it breaks one way of another and just goes there on a line. Long was my more preferred option for some reason when I thought yesterday.

    1. That’s looking like a bleed to death short, but good luck.
      If it does stop out, I’d go long, wouldn’t you?

  7. Pete that’s sonething I don’t quite get, my brain tells me I’ve had a good morning so carry on. But your right if I carry on id probably lose those points again. Difficult to learn when to walk away.

  8. The pattern looks not dissimilar to 2011. Loads of whipsaws for a month or so. I’m expecting it to test the low/make a new low in early-mid October. For now my 2-hourly is on a buy so I’m holding longs for now. I’d expect price to consolidate over lunch and have another move up when the US come on board – classic one-direction Tuesday. 7 companies going ex-divi this weeek – haven’t bothered to work out the divi but looks like it could be a larger one for tomorrow? Reuters haven’t posted it yet.

    1. I expect there’ll be a lot of short covering going on which only has the effect of driving it higher. It’s when the bulls are lulled into a sense of complacency the the bears will strike again. I’m expecting this could rise into next week with FOMC. The daily MACD moving averages are just crossing over today. Still expect we’ll get whipsaw days as well.

      1. Do you think the market’s short then ZZ? It doesn’t seem that way to me, if anything currently a bit overbought.

        1. It depends on your time-frame. It looks overbought on the shorter time frames, but I know on trending days like this trying to short it is a nightmare. On a daily time-frame the market is only just moving out of being oversold and could go a lot higher before it becomes overbought. No idea on the general market position at the moment. Some of the US indicators suggest the smart money is long for now. Bulls need this to get over 6265, bears will be salivating if it fails again there. It’s the third try so it’s do or die time.

        1. Yes, if you’re going to short I suppose here is the place to do it, PRT line, high rsi and all that.
          Where d’ya stop it though?

  9. Yea really dangerous standing in front of this, was thinking of a 6200 short but I think I’ll just watch

      1. See, look at the pain and loss I’m taking in the Bear Cause for you guys 🙂

        And, seriously, look at the DAX/FTSE divergence in the last 20 minutes.

    1. Last chance for cheap stuff lads, no whinging this afternoon when the DOWS +400….

      Look 6170, a positive bargain….. 😉

          1. No serious, only small amounts, long at 70 and a bit more at 58, will hold them till the DOW opens at least, stop at 42.

            My comment above serious too, easy to lose money in this type of market, please don’t give much weight to my decisions, really out of touch atm.

      1. Taken 2 points on the 70 long hurrah!
        keeping the 58 and adding to it after this upcoming little overbought sell off.

  10. Went out for a bit with my limit at 6200, came out and saw that i missed it by 1.2 and was closed out for b/e…. gutting!

    Long again at 6158

    1. It got pretty overbought, 100 points in 4 hours, 50% pullback and off to the races again with the help of the Fed/DOW.
      Could happen.

  11. Missed the small pullback, but I think I’ll add a little to my long on a break of 75.
    Honestly getting a little bullish for this pm now, but small amounts and immoveable stops.
    Very aware that this area is ~50% of 6200-6150 though.

  12. Closed out of my long for 13, might go back in though

    Anyone else going to be buying the pullbacks for the afternoon?

    1. Yes I was hoping, but not looking too clever is it atm….. I’m after 16470 on the DOW, 10400+ on the DAX and 6200+ on the FTSE today or tomorrow or back to bear mode.
      At 6150 now, I think it’s a day trade long, better be with my 67 average… 🙁

  13. 46 clear points taken on Dow: 14.30 – 16392, SL 50 points, to 14.50 – 16438.5
    It’s all nerves. Planned to hold till 16492, but looking at the test of the high 16446 I thought maybe that’s enough for that rally…

  14. Yea that what I was thinking but it seemed to be stalling a bit was hoping it would break 20 before the close to give me a bit of breathing space

    1. Would have thought 6130 was possible – maybe 6120 as an overshoot.
      6130 is the break out price, roughly, as I’m seeing it – so would expect something – perhaps after hours maybe, to let people square off a bit.

      1. Hugh
        are you drawing your charts from IG?
        if so – is it the pro-real time?
        i dont trade with ig, if i open a demo account – do i have access to the charting platform?
        thanks

        1. Yes they’re ProRealtime.
          Open an account with IG
          It’s “free” to use if you place four trades a month B/S + B/S.
          (You could do these on with something like VOD)

          What do you use Paul ?

  15. Still holding shorts from morning. Would expect a trip to 16100 on dow before a meaningful rally develops

  16. Ha ha I’m just looking for 5700, I’d say there would be a good few rides on the roller coaster before we hit that tho:)

    1. I’ve watched a few horror movies Pete …Friday & Monday are apparently the days to watch out for…..

      1. Yea I hate been a bear, I keep looking for the drop, probably hold this now & end up with nothing, I might set stop to 66 & at least I’ll come out with 10

  17. Well done to everyone who managed to turn a bob or two today.
    Messy day again for me …!
    Even Gromit – my computer enabled hound – “messed up” popping in -22 pints which is a shame as he’s been doing OK.
    He did 40 on Eur$ but since it was the 1st day – may have been a fluke.

    1. Hugh
      i am with city index
      ” It’s “free” to use if you place four trades a month B/S + B/S.
      (You could do these on with something like VOD) ”
      what does this refer to?

    1. Paul Min on FTSE is £2 but you can close out £1 straight away or
      if you’re good with maths !
      you could use 3 & 2 if you want to pair it down a bit.
      I was going to say IG is the best platform around really.

  18. Hi Hugh,

    What do you have Grommit doing at the moment? What are his signals? If you don’t mind me asking, must be very tight stops and limits if he is trading that much.

    Interesting that it was such a big gain on Eur$, woinder if he’ll do the same tomorrow?

    Cheers mate

    1. FTSE – It’s Top Secret at the moment LoL !….and wouldn’t be much use as it is too fast much of the time. It interesting though in the way it trades and yes, your correct in saying, Gromit’s using v.tight stops and limits. Work in progress – hasn’t gone live yet.

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