Support 6162 6134 6120 6090 Resistance 6181 6197 6218 6267 6312

Good morning. It was a long brutal day on the markets yesterday with a number of conditions pushing the FT100 downwards throughout the day, closing near its lows at 6178. A strong dollar and concerns about oversupply sent copper to a six-year low, while an OPEC report that a market surplus in oil would persist sent the price of Brent lower. US data reinforced concerns of a US interest rate rise in December while a profits warning from Rolls Royce sent them and other UK aerospace shares in a spin downwards. Only a cost cutting exercise by BAE prevented them from joining the group of worst performers. All-in-all a negative day with only the ‘shorters’ coming out of it with a profit. The worst sectors being commodities, oils and aerospace. Also frustrating was that the 6303 short oder missed by 1 measly point… drives you mad sometimes! Maybe the sell off should have been today, what with it being Friday the 13th and all!

US & Asia Overnight from Bloomberg
Asian stocks followed U.S. shares lower, with the regional benchmark index heading for a third weekly decline, as energy and material shares slid amid a renewed selloff in commodities.

The MSCI Asia Pacific Index fell 0.6 percent to 132.81 as of 9:01 a.m. in Tokyo, poised for a 0.7 percent retreat this week. The Standard & Poor’s 500 Index slipped 1.4 percent on Thursday, the most in six weeks, as a rout in commodities pressured oil and raw-materials companies while investors braced for the first rise in interest rates since 2006. Federal Reserve officials stressed that policy should be tightened only gradually, with New York Fed President William C. Dudley saying the conditions for liftoff “could soon be satisfied.”

“Central bank policy continues to be a major trading theme in the market and the other one is the pressure on commodity prices,” Matthew Sherwood, head of investment strategy at Perpetual Ltd. in Sydney, which manages about $21 billion. “Most central banks will be easing and the Fed will be hiking very very cautiously. That has investors nervous about equity prices and potential earnings growth and so we’re seeing quite a pickup in volatility.”

U.S. crude oil maintained its drop below $42 a barrel and copper futures extended declines after touching a six-year low, spurring a seventh day of weakness in Bloomberg’s commodity gauge.

The odds the Federal Reserve will raise rates at its December meeting have risen to 66 percent. Fed Bank of St. Louis President James Bullard said rates should be raised from near zero because emergency policies are not needed with the labor market and inflation near the central bank’s goals.

Regional Gauges
Japan’s Topix index sank 1 percent as the yen held gains against the dollar. South Korea’s Kospi index dropped 0.9 percent. New Zealand’s S&P NZX 50 Index slipped 0.5 percent. Australia’s S&P/ASX 200 Index fell 2.2 percent, heading for its biggest loss since September. Markets in China and Hong Kong have yet to start trading.

Futures on the FTSE China A50 Index slid 1.2 percent in most recent trading, while contracts on the Hang Seng China Enterprises Index of mainland shares in Hong Kong dropped 0.9 percent. The Shanghai Composite Index lost 0.5 percent on Thursday, as technology companies slumped on concern recent gains were overdone.

E-mini futures on the S&P 500 index added 0.2 percent on Friday. [Bloomberg]

FTSE Outlook

FTSE 100 Prediction
FTSE 100 Prediction

The current commodity slump obviously weighs heavily on the FTSE being quite miner heavy. Despite this the ASX200 (Australia) which we often follow has so far not been too bad for Friday, actually rising from its lows from the open, though its dropping again now at the close. So the FTSE might well do the same today (inverted V). There is a bit of support at the 6144 area on the 10min chart so if we do get an early bounce from this area then a rise to the daily pivot at 6197 looks possible. I can however see the bears wanting to build on yesterdays weakness so further declines are highly likely. I have drawn an orange arrow for a possible extension rise past the pivot to the top of the 30min channel at the 6230 area, though I don’t think it will get this high today. 6218 has resistance also on the 2 hour chart. However, below 6100 could be a reversal area so if we see this level then start thinking about a change of stance to bullish, though obviously the charts won’t confirm that its bouncing there till it does. Could be worth a brave long at 6097 if you fancy it!

139 Comments

  1. Well, that was fun yesterday. I’m long from 6345 avg. Can never seem to pick the right direction! Today I’d like to see a nice rise to 6267 and carry on up from Monday. 🙂

        1. Listen Si,dig deep it’s really difficult, options are to hedge part of your position to reduce risk,liquidate part of your position to release margin and stay in the game longer it’s damage limitation.other option is if you can maintain margin is to dig in, I would say try and hold as much of your position as you can and try and take the pressure.

          1. Depending on what margin capital you have hedging will enable you to spread the fight over a longer period of time,check with your broker I’m not sure about this but I think you only need one lot of margin if you hedge your position on the same instrument.BE VERY CAREFUL to tick. The hedge box if it’s on your platform so you don’t get OCO one cancels the other.They will close your original trade on you,who is your broker ?

          2. OK doing the sums you are at £100 pp I’m thinking a 50% hedge Will break it down into more manageable numbers? That’s an option to reduce the immediate pressure.

        2. One more thing…….try and remain rational,you must recognise that your brain is in fight or flight mode.

          1. That’s true,a Friday night when you can forget about trading and a weekend when you can think about it logically is worth more than the cost of holding an opposite trade.Realistically if it’s take a loss,get lucky,or live with it and trade it out eventually then there isnt a choice and no reason to regret it if it turns out some 3a.m Monday news would have been lucky for you.No offence intended with this link It just rings true to me about Trading:
            http://traderfeed.blogspot.co.uk/2015/10/the-real-reason-we-trade-emotionally.html

          2. I think there’s alot of truth in that article WSF. I hope the OP can get a positive outcome here. We are now looking at a Dow that’s down over 600 pts in a week,And the Ftse is the puppy dog following obediently behind.

          3. Or it might recover now, it’s 61.8% on Daily. But there’s no guarantees. I feel for you as I’ve been there many times.

          5. I have just reread your post Si,you look to be around £66 to £67 pp not £100. I was a bit distracted earlier.

  2. Morning all, just a quick one and I’m out till later.
    A classic example yesterday of simple technical analysis working, breaking twice tested 6250 resistance turned all that sideways 250/450 into a shallow top with no support once that neckline had gone.
    The equivalent to 6250 on the DAX is 10690, with a hole underneath of about 400 points. One to keep an eye on.
    Despite it being the 13th, I’m looking for a quiet end to the week and just RSI trading for the moment, currently short from 62, trying not to cover too early for a change, although getting tempted around these levels (42).
    Good Luck all.

    1. Morning 40’s to 60’s and back for a bit longer then ? City Index said net client exposure was 84% long at 07.52 this morning FWIW 🙂

    2. Looking pretty brittle at 36, what to do, take +26 or let it run while I’m out (don’t do smartphones) with a 52 stop?
      Answers on a postcard pls.

      1. Your in good company tmfp Anton Kreil has dumped his smart phone :0) ive heard he’s had a couple of winning trades in his time :0)

    3. Bang on tmfp.

      You can forget about your MACDs, RSIs and whatever all those indictors are called. Once that level broke it was as close to a certainty in trading as it gets. With no support it was a clear short. Not as straightforward on the Dax, looks like it’s having another go at that level now though. A short from 10700 with a stop at 10720 is a massive R/R. Tempting.

        1. Nick,I do a weekly poll like that on Saturday and they do some interesting stuff with the numbers.
          You probably know it,but this is this weeks from Monday (Historically the Users are wrong,the Indicator is a new feature and has been right,but too early to tell)It is a bit american,the Dont Care answers re Presidential nominees were mine 🙂 :
          http://timingresearch.com/downloads/TRReport110815.pdf?

      1. I havent seen it either,was going to ask if anyone has read it how they feel about EW and wave counts now and whether they thought that bit was useful ?

          1. It’s a pity,I think this has potential for a sharp rise,Still it’s Friday and you have points in the bag,and it’s more important to enjoy your life than hustle for a few extra points.Well done Senu,

  7. Hello again, well we’ll see if my DAX theory was right, this could be messy afternoon. Once again chaps, no catching the collapsing cutlery. Yes, I know it doesn’t have yesterday’s freefall feel…yet.

    Re: tops, the DOW partially completed its too yesterday around 17540, but may see support off 200 I reckon.
    The questions I would ask now before trading for the rest of today: it’s Friday, one big weekly red candle coming up, would shorts cover around here? Are longs going to average down before the weekend?
    Two no’s from me, although I’m taking 100 profit on my VIX long.

  8. 2 cheeky fake outs on the FTSE and Dax have put me in the red. Back into range, although there are lower highs on the 5min.

    1. Always difficult, fri pm trading after a trend week. If we get through 6130 convincingly, could get to 6150, the underside of the downward channel lows.
      I’m resting on my laurels I think, no MHH for me today.
      Any German/American weak hands won’t show up till later, I shouldn’t think.

          6. Yeah it’s a compliment, you are sh*t hot under these conditions especially, well done mate have a great weekend.

    2. Got out of my short -10. Can’t be bothered looking at red ink on Friday night.

      Nice trade from 25 tmfp, got a quick 20 points there?

  10. Is it normal for cash balance to go down by 20 to 30 pence a day or every couple of days or so even when you are not in a trade or if you are in trade but you haven’t closed the trade(s) to influence the cash balance? I have noticed my account keeps going down by 20 to 30 pence at City Index. Of course, I understand net equity will fluctuate whilst you are in trade and then upon closing the trade then the cash balance will go up or down. But why am I losing cash even when there’s nothing to suggest it should.

  11. Upon closing a trade the cash balance will go either go up or down. But I am neither opening or closing a trade or I am already in the trade.

      1. I should add you will be credited a dividend when one is due too and then your balance will go up due to having an open position ,if it is long or down if you are short.

      2. Hey WSF while you are about I have read some of those articles you posted earlier.Very very interesting and I had started to recognise it in me sometimes before you brought it up.Its fascinating when you look at why and how we do what we do, there is so much more to trading than is immediately apparent. Thanks for posting it.

        1. Hi anstel,yes some good stuff out there.I think sometimes it really helps to look at it like that.The numbers in that Video from the other night really impressed me,the size of the % losses some of those guys were carrying and yet they still finish the year up 25% after taking out their Salaries,expenses and bonuses 🙂 Mind you tmfp day after day racking up the points is an inspiration.I think sometimes when you are stressed,missing targets or whatever,just seeing him trade can change your mood in a way that reading about Tudor Jones or someone cant.Really appreciate that and the fact that it is intraday… what I want to do when I grow up 🙂

          1. Hi WSF I quite agree, tmfp is extremely good, and he try’s to help us all.I think every trader has different areas that they are good at and if we can learn as much as possible from each of them we will then find our own little trading niche. That Dunn composite was impressive in your video,also Joseph Nemeth has an interesting approach using hedges. if we can stay in the game long enough while we are learning we have a chance.Its not easy,Its very very difficult Have a great weekend :0)

    1. Yeah Senu you did the right thing,I think we both thought 6197 was possible or there abouts.Its not the way I wanted to go into the weekend,I’ve had to take some measures to cover myself I didn’t really want to take.I have a fairly good tolerence for pressure but I have been trying to size my positions to keep myself in my comfort levels,this has taught me that even though I’m much better than I used to be I still need to make changes.All the best Pal:0)

        1. Thanks Senu,i just hope it opens around this level or above Sunday night.The Dows dropped about 750 points in a week! There’s no stability at all,im beginning to think trading consistently is virtually impossible.Goodnight Senu.

  16. I don’t mean to be insensitive because markets can seem trivial in times like these. But I hope there is no over reaction.

    1. Hi Senu,
      it’s extremely sad what has happened in Paris,I send my love and best wishes to all those people who have been effected by what has taken place.

      1. I think a 200 pt drop on Ftse is within the realms of possibility,i think downside on the Dow as well by how much i have no idea,I don’t do giving up easily but sometimes discretion is the better part of valour so after careful consideration I have decided to act accordingly.

  19. Very sad indeed. RIP all.

    I’m new to trading and have left a long open over the weekend at 6097. Any chance I can close this on Sunday hours?

    I’m guessing we will see a lose of around 200 points in Monday? Or do you think I’m over reacting?

  20. Horrible events. I cannot see that level of drop. I am long too and bracing for c50 points on Ftse. The spread betting sites will go over drive no doubt but try to stomach the Sunday madness.

  23. Hi guys.
    Well, I signed off Friday jokingly saying see you in the 5900’s Monday, but to be right for these reasons is awful.
    If the various Central Bank Rescue Squads are active, they will have some weakhand liquidation to soak up (someone came out with City Index punters ~75% long late last week) first thing, but after that I can see a strong bounce back to 6250 during the week.
    OR a week which will go down in history as the start of the Black Winter…..

    The non Apocalypse version is based on a common phenomenon that I trade off, a break of a significant resistance with heavy following liquidation, then a light volume bargain hunting/profittaking rise back to the original break level (before trend resumption).
    I’ll be longing extreme dips, but bear in mind that this will be the third test of the high 5000’s, and that the DOW certainly and maybe the DAX, could hold above their equivalent August lows while we make new ones.
    The FTSE is leading the bear charge, it refused to retrace the August crash more than about 60% and broke the support necklace (6250) first.

    Good luck all, remember that the only heroes are dead ones.

  24. Hi tmfp, interesting comments,with the markets closed only certain options are available to minimise exposure.I sometimes wish we as traders could communicate with each other personally without making public posts.I don’t know how you feel about that idea,I had thought of putting a post on here if it would be acceptable to Nick about the possibility of some of the traders on here meeting up possibly in the central part of the country so we could share views,knowledge,and experiences.I would be interested to hear your views on this idea tmfp, Nick,Senu,WSF, Hugh,and the other contributors to the message board. At the moment I am at a crossroads in my trading career.Im unsure whether I should continue as it appears the goal posts are moving around by large amounts and at increasingly regular intervals.as the saying goes,…when you get in a hole stop digging!

  25. Hi anstel.
    I quite like the internet as a method of communication. As an old man, I try to see the wood for the trees in situations, and personalising general concepts isn’t always helpful but….
    Re: your recent trading, it’s difficult to see how you are going to move forward if you keep denying some form of technical analysis. I’ve asked you from time to time about how you see the market developing, at what price levels you will exit and enter, and you’ve answered in generalities or about it all being a joke etc.
    You appear to have the time to devote to trading, you need (imo) to clear your mind, develop a strategy and stick to it.
    You’ve been a bull in a falling market recently, this doesn’t mean that it’s inevitable that you lose money. This is when your strategy and discipline kick in.
    Try trading without a view, actually trade the market itself, as opposed to using it to express your opinion/judgement about its direction.
    You and others have kindly directed some flattery towards me and my trading recently. I am known for being a bear, but make money in any market. I trade the numbers with a system, that’s all.

  26. Evening all,terrible news headlines.Very sad.
    Draghi is scheduled to speak at 10.15 tomorrow and the Sunday mkt has 6009 at the moment with the low as 5981 and the high 6082.9,guess we will see in a while.I still havent looked at ASX charts,but good luck to anyone trading later.
    anstel I know how you feel.I remember Obama destroying my plans and account one night after Ldn closed,during his first term,with a few empty words.I didnt have the margin to ride it out and I had an S/L in an area I thought was safe for a long term trade.I guess that is part of why I see Intraday as attractive now.

    1. Hi WSF well the news of what happened came up on my phone via a Bloomberg push message after close Friday.after careful thought I decided to let my positions go.Im not sure yet what my next move will be so I’m going to watch for a while,very best of luck.

      1. That sounds good,take a break &/or wait for a day that really suits you and ignore the rest,maybe scale the stakes back and try that Tony Loton £100 to a £1000 thing as a separate set of trades.It’s too easy to forget about quality of life.All the best.

  27. Hi tmfp,thank you for your reply to my post,I do need to have a rethink,When I started trading CFDs two years ago I did so because I thought the market was due a 2008 style decline,I lost money the first 2 months not a lot though but then I did extremely well buying the dips before the announcements of when they would stop qe,i did phenomenally well for the next 7 weeks.then Nick was talking about the market dropping to 6300 and I agreed I did really well shorting but then I learnt something that has influenced my trading ever since.The central banks push the market to where they want it to be,when they get it to their target area we get our free market back to trade as normal.everyone trades it at that level as if that is true market value.When the traders consider that the central banks have pulled out their support system it gradually starts to drop and drop and drop.traders are thinking are we going to get some central bank help,it’s only when that help is obvious that the market will maintain a level with some degree of confidence.So when I was short in early 2014 it was the right position technically and fundamentally but the market rallied constantly back up to 6800 plus.after that I had to consider that the market was ……………let’s say not what I thought it was,and that’s being polite.i lost all my gains and some original stake ,not happy,but I learnt what the market is really about,I spent the summer of 2014 regaining first my original funds and then almost all of my earlier profits.So I made a load,blew the account then made it all back,then in September last year I got overconfident and blew a big chunk of my account again,I had most of it back by the Greek crisis but I have struggled ever since.The problem I have is you never know when the bankers are jumping in or out,that’s why I think it’s a joke.its not of course but the system is.So for me now I will get closed out at open to the best of my knowledge,I really appreciate all the advice you and others have given to me thanks for that.I need to think carefully now ,I enjoy the trading,but this time I don’t seem able to regain my account for a third time.Maybe one of Nicks courses on technical analysis would help but I must have done something right to have been able to regain my first blown account.I think I’m going to watch you and the guys and clear my mind like you suggest.thanks tmfp and as always all the very best of luck.

  28. Just looking at the Google business news, full of headlines like this “Paris attacks seen causing short-term global markets drop” from Reuters.
    Currently at 6015 on IG, if the touted scenario plays out then a flash -100 more could be likely, but there are others for Monday’s trading:
    1) it is a flash and we rebound immediately + some more, maybe to 150/200
    2) there is no bounce and we just plummet towards a test of 5800
    3) it’s already priced in at -100 from Friday’s official close, -60 from 22.00 and trade is comparatively restrained between 6000/6100.
    These are the possibilities as I see them, obviously bear your margin in mind if you’re playing.

  30. I don’t know I have not been closed out for some reason tmfp any ideas? My margin indicator is 0 and my resources are negative.

  31. I wonder if the brokers are going to hold the positions open for clients must be a technicality,it’s nudgeing upwards very slightly.

  32. God knows what’s going on there. I could close my trade for a little while but it’s back blue now with a massive spread.

  34. Risky business that. I would prefer it to close. I wonder if the drop wasn’t as bad as first feared hence the broker keep the trade open?

    1. It’s possible to draw a line of support on Australia back to 2009 and say that is basically where they opened,so even though it’s back to 5000 I’m cautious about anything they are influencing,mind you I dont have any faith in their economy or their ability to manipulate it.
      anstel I had a similar thing once with II where they didnt take the money they originally gave me when I signed up with them.Did you have a signing bonus?

  35. I’ve moved my stops down to 5967, sold off half of my position for a huge loss and currently clinging onto £35/point long. To be honest, I’m glad it didn’t just shoot down below 6,000 at 11pm. Now I’m deciding whether to close out more in order to move the stop lower.

    1. i’d probably go long on dax if i were you. the gap is just too huge and it’ll probably close within couple of days. the market is just overreacting imo.

    1. I have no idea 🙂 All I know is that I’m going to be fairly upset if I end up with nothing, so I’m glad it appears to be drifting upwards at the moment! I was £85/point long from the high 6300’s, originally.

  37. I just don’t know,it’s nudging up best case scenario is it keeps regaining points till I have resources again?

    1. I don’t have a margin account, but I have seen what you’re talking about once before. It didn’t last long (maybe 5 minutes) and then the positions closed out – as if there was a delay. Fingers crossed for you!

  39. It’s very steady, if we was going to have a bad reaction we would have had it by now. Has anyone’s popular markets disappeared on their IG index app?

    1. i don’t think it’ll drop anymore. the market has already digested the news and it’s not that big of a deal. we’ll have a stimulus package in europe so it should go higher. i manage to go long on ftse at 6009 and dax at 10482. i am so glad i got stopped out of my position from dax on friday.

    1. Hey WSF I’m still in don’t know why unless I have a liability and there is some small print I have missed.i can’t access funds to top up resources.bloody hell I really hope it goes up.

  43. I can not access funds to top up my resources at this time so if I’m kept in its my brokers that are helping keep my positions open?

      1. I have an email with a negative cash balance which is not pleasant,to add to that the negative amount in my trading resources has now reduced on my screen slightly,i have no positions on but the figure has changed.i am not liking this situation.

        1. There isnt much you can do before the daily statement.It is just how you react to it now and what kind of a story it ends up being in the future.Maybe take the break and just trade the days that stand out and see how it goes.There is a lot to be said for building a pattern of trades with small stakes,taking the stress out of it.Sorry that happened and hope it doesnt take over everything.

          1. I will bounce back, it’s a setback but I’m pretty resilient I need a break from it all though,I will give them a ring tomorrow and find out where I stand,I may well change brokers depending on the response they give me, When I decide to start again it will be with small stakes and I will try to improve my methods.time for some sleep now all the best WSF and thanks for your support.

          2. Look after yourself anstel I’m sure that when you have had a break there will be a trend waiting and you’ll be ready for it.Sometimes we dont need to beat ourselves up about things that happen,hope you can get a good break.

  46. Australia is looking like 5050 is more likely than 5000,Draghi is at 10.15 and I still cant see next year as Bearish,or even next month but none of that is based on honest fundamentals 🙂 Oh and Japan is technically back in Recession.

    1. Hi WSF, reading IG’s Evan Lucas this morning he notes the correlation between ASX and TSX and looks to Canada for leads, i.e. sub 5000, both countries having big commodity price exposure.

  47. Morning.
    Hope you have your margin prob sorted anstel, sounds weird.
    Looks like option 3) in play atm from my last night’s post….but mutterings about the last NFP’s being seasonally anomalous starts the week off with negative sentiment, keep an eye on the VIX, I see volatility till Christmas.

    1. Morning tmfp, I have been left with a negative net equity quite a considerable one.My understanding was that my trade would be closed when I got to 80% of the margin needed.i got an email saying my margin requirement was below 75% and I needed to close out or increase resources which I understand.i could not add to resources via card for reasons I won’t mention on here so I phoned broker but got the Asian branch……Meanwhile my trades were all still live and the loss was increasing as a negative balance in my resources.i then had another email saying my account had reached my 50% margin minimum requirement and would be closed but still my trades were live with 0% margin and a negative resources figure. My trades were only closed when it seemed to be indicating the market was going to increase in value,it closed me out when it was going up again. This makes me think that if the market had crashed I would be liable for unlimited losses and I would not have been closed out. On top of that the negative figure that is quoted in the email they sent me when they closed me out , which was the same figure originally in my resources has now reduced by just under 2% ……. Even though I have no positions in the market at all? I am going to ask them to send me a printed paper copy of their terms and conditions and read it all again very carefully.

  48. I’m starting to think what a massive mistake the Fed will be making if they raise interest rates… they’re only doing it because of their own credibility issues, very bearish potentially for equities.

    1. Morning tmfp,I agree about Australia,nothing there now the Chinese dont have a use for raw materials.Re Fed Interest rates the Japanese have tried to get back above 0.5 % twice and ended up coming back down.Wonder what Draghi will say in a couple of hours.

  49. Half hearted stop search on downside didn’t yield anything. l have very light shorts at 6100 and 6120 stop 35.

        1. Clawed a little back off 25, running into resistance again at 6150 with the DAX leading the way.
          Tricky one to call this morning, would rather be short side than long between 150/200 but the chances of a go at 250 are improving.

  51. **
    2nd RSI T Short 6120 – Please note this is a “signal” not an entry as it seems better to let the candle break the hi or lo of the bar signal.

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