Support 6240 6250 6220 6156 6094 Resistance 6245 6265 6276 6290 6321

Good morning. Dipped form the 6245 down to 6215 for the shorts and long to play out though didn’t quite reach the 6285 short level before the bell. The FT100 had a powerful rally today on the back of expectations of further ECB stimulus and by Greece’s preliminary deal with its international lenders on home foreclosures. The only sector to miss out on the rally was commodities with some commodity prices falling to new lows, this in part due to expectations of a interest rate rise in the US in December and weak demand from China. In the short term it feels like the market is doing well but at the 6250 area this is really quite low and is far off the 6700 levels seen in August. Everyone seems to think there will be a “Santa Rally” and if enough people think it will happen then it probably will! – maybe 6500 would be a conservative target for year end.

US & Asia Overnight from Bloomberg
Asian stocks rose, boosted by gains in Japanese shares as the yen held losses before a Bank of Japan policy meeting. Investors awaited minutes from the Federal Reserve after U.S. inflation data bolstered the case for higher interest rates.

The MSCI Asia Pacific Index gained 0.3 percent to 132.26 as of 9:04 a.m. in Tokyo. Japan’s Topix index added 0.8 percent after the yen slid 0.2 percent against the dollar on Tuesday. The Standard & Poor’s 500 Index lost 0.1 percent on Tuesday as data showed consumer prices excluding food and fuel rose 0.2 percent in October, just as much as in September, and in line with economist forecasts. The Fed releases minutes from its last meeting Wednesday while the BOJ gives a policy statement on Thursday.

“The Fed minutes will definitely be focused on tonight,” said Ric Spooner, chief market analyst at CMC Markets Asia Pacific Pty Ltd. in Sydney. “There’s now an assumption that they are going to make a move in December. The bigger question now is whether they will be able to be as gently paced in their tightening as they plan to be as they monitor wage pressures.”

The MSCI Asia Pacific gauge rallied 8.9 percent through Tuesday from its September low, even as traders boosted the odds of a U.S. rate increase in December to 66 percent. As the BOJ begins its two-day meeting, all 41 economists surveyed by Bloomberg predict no change to already record stimulus despite a report Monday showing the economy slipped back into recession. Last month, 44 percent of economists said the BOJ would add to easing on Oct. 30.

South Korea’s Kospi index rose 0.2 percent. Australia’s S&P/ASX 200 Index lost 0.3 percent and New Zealand’s S&P/NZX 50 Index rose less than 0.1 percent.

Markets in Hong Kong and China have yet to open. Futures on the Hang Seng Index rose 0.5 percent in most recent trading, as did contracts on the FTSE China A50 Index of the mainland’s largest companies. The Shanghai Composite Index dropped 0.1 percent on Tuesday, erasing a gain of as much as 2 percent, as technology and small-company shares plunged on concern the resumption of initial public offerings will lure investors away from the nation’s priciest equities.

E-mini futures on the S&P 500 were little changed after the underlying equity gauge failed to add to a rebound from the worst week since August. Separate data Tuesday showed factory output increased in October for the first time in three months.

The Stoxx Europe 600 Index jumped 2.5 percent on Tuesday, the biggest rally in six weeks, as oil and gas producers including Total SA and Royal Dutch Shell Plc advanced. [Bloomberg]

FTSE Outlook and Prediction

FTSE 100 Prediction
FTSE 100 Prediction

We have the dividend today which is 6.4 so bear this in mind if you have a position open later on. There is some significant resistance at around the 6260 area for today, namely the 10 day Raff and a bit on the 30min chart. With the bulls failing to really break through the 6280 area last night I think we might see a bit of a dip down towards the 200ema and S1 area at 6220 this morning. There is still a bit of terrorist worry with 2 Air France planes diverted in the early hours and a shooting near Paris. All that said the 30min chart is still technically bullish though the EMAs look like they are shortly about to cross, which would play out for the drop towards 6220. There is also a rising channel on the 30min with support at 6240 so initial support there for any initial dip.

89 Comments

    1. Hello custard, it doesn’t make a lot of sense to me either, but we appear to be in limbo right now. And before I get accused of singing the short song all the time, I’ve longed twice this morning, so there. 🙂
      Stuck 6230/52 and the Germans 10880/930, which will break first, I wonder?

          1. yes. Felt slightly robbed by the 30 point tickup on FTSE at the close where the DOW didn’t move anything like that! Assume it was the oil spike

  2. Morning,I’m 3 points away from being stopped out on a Short,so I’d have to say probably not yet 🙁 🙂

  5. Morning all

    The 6227 level is key. Once that breaks we should push lower. I’ve got a short order at 6225 – I like to waiting for confirmation. Not interested at the mo.

    1. Yeah, just reading IG’s Mahoney saying exact same thing.
      25 would be a bit tight maybe, I going to use my stop procedure and look for 3 X 1min close confirms below 27 before shorting it.
      If I miss the move so be it, I don’t want to be hunted at a recognised price point.

      Fairly clear lower highs on DAX providing resistance around here, looking to short FTSE around here 48, 8 pt stop depending.

      1. Glad Mahony is pointing out that price. The best levels are the ones which are clear as daylight and everyone sees.

        True, maybe worth moving the entry down. I might go in small and add on the pull back. If it does pull back I’m not overly worried though as I’m trading with the trend.

        1. Yeah, he’s their whizz kid 🙂
          Brenda Kelly was my favourite on IG (I like Irish women, sexist pig that I am), I still follow her analysis on Twitter since she left.

          1. Do you remember Edie Lush on Bloomberg – whatever happened to her ??
            Probably started her own prn channel…

          2. Edie Lush lol? She had a head start with the name if she did.

            Important 20 minutes coming up for the DAX, 20 either way from here 890 will continue imo

        2. I always wonder why don’t the analysts just trade at home themselves if they’re so good! Or do they prefer commuting into central London each day?

      4. Morning All – Yes – It’s struck me that that is one area that seems to pull my trades apart…Buying on Support e.g. 6230 and then Selling just below…only to find it’s poked lower and then recovers.
        And then, when I look at the entry arrows – I’m thinking to myself – why did I go Short there …and that’s because of the Buy Support – Sell on break.
        I’m thinking that it’s better to take the Stop (Loss) and then let the pattern emerge before the next trade..
        Hope this makes sense…

        1. Hugh I used to trade that on a 5min chart in a 60 min chart uptrend looking for the last 5 min higher high before the test of Support that failed,but it was really just btfd.

          1. Hi WSF – Watched that Joseph Nemmeth YTVid at the w/e about the HA charts. I think you suggested it.
            Seemed OK – sounds plausible – guess it’s all in the application…

        1. ticker – CL
          Coming off
          let’s face it – these markets aren’t doing anything and we’re fast about approaching snooze time …..before 2:30

          1. Going neutral here, taking -6, DAX downtrend broken, we’re through our highs just, and in a clear short term uptrend, support atm @ 51

      2. Should have gone with the turn round, irritating, either trade your signals or don’t, but don’t be selective. Rats.

  7. LoL – Strong market – just look at that move from 6246 >53 – whey …
    Put an Small short 6252 – for a couple

        1. Senu – I was only messing about …but, yes, I have put in a couple of small (tiny) Shorts here 6250 & 6260…
          Thought they were reasonable entries
          R3 being 6261 & RSI T
          Might go to 6280 – I guess…
          Will we ever see prices lower than 6255 again ?
          :-/

    2. Hi Si just curious but as I have pretty much made all the mistakes my biggest area was position size and taking on too much risk per trade.Just curious but what’s your risk as a % of your account on this trade.If you are uncomfortable answering that question on here maybe you should think about it and I fully understand if you don’t want to answer!!!!

      1. Just like to add,I know exactly how you feel right now but chasing losses is going to bite you on your a*se more than likely,it did me.

      2. I almost always lose – I just keep plugging on for the win! I usually end up depositing every penny I have in order to save a trade. That dip on Sunday was the first time I can recall managing to “save” my positions by depositing more cash and lowering the stops. It was such a large amount, I wanted to protect it and not get closed out.

        I’m not cut out for short term trades because I don’t know how to take a loss. So, I’d prefer longer term trades now but it’s been a difficult transition because I never allow for enough movement. My typical FTSE trade would be £20/point, but I’d only deposit enough for say, 50 points in either direction. If that went against me, I’d add more cash for another 50 points, then another 50, and so on.

        Currently I’m £40/point long, avg open of 6358 and stops are 6153.

        1. Hi Si I have done in the past exactly what you are doing,I remember I was on the Dax short at a stupid pp and they announced qe in Europe,Jesus I got out of it by grim determination and Ladyluck,I’ve been long Dax when the Ukraine crisis was on and it collapsed into the 8000s literally needing the toilet,and the same short on the Dow when it got pumped up.My first year I made some money twice but I didn’t hang on to it stupidly,when you make some money you get euphoric and start thinking it’s easy,that’s when you get bitten.Im now at the make or break point.If I try to continue to chase losses Im not going to be successful unless I am very lucky,and if I’m lucky that’s probably going to put me back in bad habits.Im thinking of drawing up a plan with all my good things included but addressing all the problem areas and remove them.then look at gaps in my knowledge I.e.technical analysis and try and improve that.Then start with a very small account of maybe £500 or £1000 and trade at £1 pp till I can double my deposit.then I will allow myself £2pp.etc.Its easy to sit here though and say this but I know when I’m seeing a trade I will be tempted to break my own rules. That’s what’s stopping me from trading now apart from I need a break.i have to focus on a strict process,if I can make £5 or £8 on a trade consistently that’s better than making a large gain every here and there. I want consistency at small stakes then slowly as the account builds I can increase pp.i hope you get out of this trade Si with some of your account intact Si,For me I don’t know whether to continue or not,If I stop after 2 years of experience it’s seems a waste of not only my money and time but also the experience gained. I just know that I push it to much,always have with whatever I do.If I keep pushing here in trading I could have problems,it comes down to can I control myself?i don’t know? Like tmfp says there’s always another trade……… If you have any capital!

          2. I think for the first 3 years, you should just try and learn strategies, psychology and market info. If you make money along the way then great, if not, then you’ve learnt a whole bunch of stuff. If you’re learning then trade at 0.50p a point on City Index. I think its madness people trading £20 a point on the Dax or Dow, or even the FTSE with small accounts, little experience and low confidence. Think of trading like any other trade, you wouldn’t watch a few Youtube videos about being an electrician then try and re-wire your whole house the day after. Take it slowly, learn and build your confidence. It’s also supposed to be fun and empowering so when it stops being that take a few steps back, shut down your positions and come back to it in a few weeks. And remember, the most important aspect of trading is staying in the game.

          3. Chaps you have got some balls trading >£10 PP.
            Maybe that’s where “the issue” is :- starting with such high leverage would seem to be misjudged.
            It’s OK to be at these levels if you’ve worked your way up to these levels, if you follow me.
            Nick’s spreadsheet is a good demonstration of the best way to run an account.
            I’m still of the opinion that Trading is a compelling business – it’s got so many things going for it when you compare it with traditional businesses.

          4. That’s what I am trying to do: trade £1 pp building up to £2. In the last 2 months I won 450 points (pounds) and decided to start £2pp and when it all went to drain: I broke my rules, opened the stops, chased my losses etc. It is difficult to learn how to control yourself but every time you start fresh and you seem to know better how to react. I learnt to accept occasional losses, not always, but it got a way better since last year. When I won those 450 points I was doing all by the book, taking my stop losses. When I started £2 I became more cautious and started chasing losses on which I lost those 450 points and more. What I remember, when I was on £1 I didn’t care if I took a loss or a win and it allowed me to win some trades. But when you are on £2 you want to win every time. I think you need to abstract from the meaning of money somehow when you trade and only follow your technical stuff.
            About £20pp and more. I think, there is an element of being cool about it, but it’s all illusion. If you have to add up to your account every time 50 points passes – I think it is a path to ruin. Stakes should be adjusted accordingly. To be able to trade £20pp the account should be at least 10000 to start with. But I am sure experts would advice more substantial amounts.

  13. Hi All,

    Anyone got a longer term view on Dax ? Currently got a long from 907 taken half now at 980 ? Will it break 11060.

    1. I’d be surprised if it failed to have another go at the recent highs RJ, looks up for it on today’s showing. If it goes through 11060, sky’s the limit really.

    2. I’ve been scalping it from 30 and think it will,longer term,but with FOMC minutes later I dont expect the U.S to head up and I dont see the advantage in holding from here it’s not big enough for the r/r I’d rather buy it lower before the ECB tomorrow or miss it.You could stick a S/L in the 20’s and leave it though.

      1. Thanks Tmfp and WSF. I closed the rest at 975. I will wait for a pullback to go long again or I might have lost a good position if it keeps rising.

        1. 200day sma is at 11000 and there is a lot above that so plenty of time for a long term trade.Going in over the 200 on a pull back towards it is the worst case scenario and if you did that without any other trades on the way you’d probably only be down 50 odd points on what you could have made by holding.It doesnt seem as eager as the Dow at the moment anyway and it is basically where it was at the close yesterday right now,which seems a bit off.GL.

  14. Well, nearly DOW time after a good performance this morning over here.
    17600 would be the obvious target first thing, then 700 where they start hitting the big top.
    17440 needs to hold to keep the momentum going.
    There is an FOMC minutes release later, about 7pm GMT I think. Could be mixed to lower till then. I think they’ve made a right Horlicks of the rate rise drama, but have no idea how it will resolve.
    I’m buying the VIX again soon, around 17.5 for a short that isn’t a short.

        1. Wow,that is nostalgia,”lets all do a Seaman tra la la la ” with the leaning back and the hand gestures 🙂

        1. Well mate, it’s the same old story isn’t it?
          On Friday closing at 6080 the FTSE didn’t have a friend in the world and it was time to buy, despite Paris.
          Now, only three trading days later, the shorts are getting hair cuts and there’s bullishness everywhere. Important levels are being held, like 6230 today. You can’t argue with the numbers.
          It’s the DAX that’s providing the upward momentum as much as the DOW, and that’s QE money doing its job.
          Maybe this rally will continue grinding its way up and morphing into the widely expected Santa Rally…..

    1. “Some participants thought that the conditions for beginning the policy normalization process had already been met. Most participants anticipated that, based on their assessment of the current economic situation and their outlook for economic activity, the labor market, and inflation, these conditions could well be met by the time of the next meeting. Nonetheless, they emphasized that the actual decision would depend on the implications for the medium-term economic outlook of the data received over the upcoming intermeeting period. Some others, however, judged it unlikely that the information available by the December meeting would warrant raising the target range for the federal funds rate at that meeting.”

    2. Barclaycard think Rates are going up :
      “We’re making some changes to the Terms and Conditions of your account. From 1 February next year, your interest rates will start to move in line with any changes to the Bank of England Base Rate.”

  19. Went long at 8.30pm Friday night. Survived Sunday and closed Monday evening well into the black which was strange. Sold as I read it may have been a patriotic rally. Went short at lunch time so bad timing with those Fed minutes. Still a bit unsure what they will do and expect a pull back this week to 2050 S&P. If it goes to 2100 it’s time to really start adding short. No way has the Santa rally begun. Amazed the market ignored the collapse in oil today. AAPL up a lot helped today on the rally.

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