Support 6284 6258 6252 6236 Resistance 6303 6316 6335 6345 6420

Good morning. The FT100 got off to what appeared to be a sustainable rally in the morning but ran out of steam by lunch time – a pattern which has repeated a few times now, finishing about 20 points higher at the close. In part it was on the disappointment of no clear guidance from Draghi (the ECB President) on monetary policy in his speech delivered in London today. China data was also slightly weaker than expected overnight. It appears since the hint that US interest rates may rise in December that the FT100 is finding it hard to break away from the 6300 area. The weakest sectors were oils, commodities and housebuilders.

In terms of the trades, the rise yesterday from the 6290 level to start things off went well though 6325 proved to be strong resistance in the end with 2 tests failing to break the 200ema at that area, and then an evening decline down to 6265. The bulls have fought back a bit overnight and we are testing 6285 as I write this.

US & Asia Overnight from Bloomberg
Asian stocks were little changed after a drop in U.S. shares. A stronger yen weighed on Japanese exporters, while energy companies retreated after a decline in oil.

About MSCI Asia Pacific Index was unchanged at 133.06 as of 9:07 a.m. in Tokyo. Japan’s Topix index lost less than 0.1 percent as the yen held gains against the dollar. The gauge rose to a 12-week high on Wednesday, bringing its gain for the year to 13 percent. The Standard & Poor’s 500 Index slid 0.3 percent on Wednesday.

“Japanese markets have been pushed to the limit as well as U.S. stocks,” said Mitsushige Akino, executive officer at Ichiyoshi Asset Management Co. in Tokyo. “We haven’t had bullish factors to lift markets at the moment.”

With U.S. data and policy makers signaling the world’s biggest economy may be strong enough to withstand higher rates, investors are monitoring figures from overseas to gauge whether there are any threats to growth that may still concern the Federal Reserve. Reports Wednesday showed Chinese factory output growth continued to weaken in October, suggesting monetary and fiscal easing have yet to spur any notable acceleration in growth.

The odds the Federal Reserve will raise rates at its December meeting have risen to 66 percent from 39 percent a month ago. Fed officials including Chair Janet Yellen are due to speak a policy conference Thursday.

New Zealand’s S&P NZX 50 Index added 0.2 percent. Australia’s S&P/ASX 200 Index fell 0.4 percent. Markets in China and Hong Kong have yet to start trading.

Chinese Shares
Chinese shares in Hong Kong dropped for a fourth day on Wednesday as weaker-than-forecast growth in industrial output increased concern China’s economic slowdown is deepening.

Wednesday’s data show old growth engines are faltering. Industrial output rose 5.6 percent in October from a year earlier. Fixed-asset investment increased 10.2 percent in the first 10 months, the slowest pace since 2000. Retail sales climbed 11 percent last month, the quickest gain this year.

E-mini futures on the Standard & Poor’s 500 Index were little changed on Thursday. The underlying measure’s drop on Wednesday came amid a selloff in retail shares as Macy’s Inc. missed its third-quarter sales estimates and cut its annual profit forecast.

Crude futures rose 0.5 percent today after sliding 2.9 percent in New York on Wednesday. [Bloomberg]

FTSE Outlook

FTSE 100 Prediction
FTSE 100 Prediction

It looks to have initial support at 6284 as I am writing this so I wouldn’t be surprised if we get an initial rise to start things off at 7am. There is then a declining PRT channel on the 30minute chart with resistance at 6303, so this level is fairly key to start with – if the bulls break this then there is a rise to 6345 on the cards, whereas, if the bears defend that level then a decline to 6250 looks likely. Not too much range to play with first thing with arguments for both scenarios at the moment so will be interesting to see which one plays out. If the 6303 short fails then it will be worth flipping to long, and if 6284 breaks to the downside its worth flipping to short for a run down to 6250, and possibly 6236 where we have the bottom of the 10 day Bianca channel.

112 Comments

    1. At the risk of p*ssing people off, me me me 🙂
      Nick called it bang on, but unfortunately I only covered my pre mkt 87 short at 50 on a platform order, because IG is as slow as mud this morning and missed the long order. Like about 10 seconds to confirm that “the price is no longer valid”???
      I finally got on at 60 but came out too early at 80.
      Currently short at 92, stop 05 looking for 60’s.
      How about you custard? As a newly converted bull I expect you filled your boots 😉

        3. Hanging fire on the long looks like no bounce, thinking there will be a bit of stop liquidation if we do break 50, also HFT’s may look for it.
          Be a bit careful should we get there, IG guaranteed stop is only min 20 might be worth using, don’t really want to be stuck with a frozen platform and a long.

          1. I’m with Cityindex,I find quite often when their platform goes tits up I can still close trades using their app on my phone.it gives some backup if the Internet drops out as well.its looking very weak at the moment,I’m surprised to be honest good luck

          2. Be interesting to see how far it drops now we are about at <50.The central bankers went to a lot of trouble to get the Dow back up towards 18000,I think it's a double bluff to scare the s#it out of people.

    2. morning, managed to get the long from 6250. Got out at 6295 and reversed it straightaway. target is now S1 at 6370.

        1. I’m in again at 6250! Currently 6254, banged the stop to breakeven. Too tight but it’s not looking as positive as the last couple of bounces.

      1. Could be WSF, what platform do you use? IG have a bit of form for this though, last year they crashed at busy times.

        1. Hi tmfp I think they all have that in their business model.I just reset my comp to yesterday morning and seems to be ok now.It was Cityindex I was in,but everything else was freezing too.Is your browser Mozilla ?

        2. Yes I think you’re right, they are over capacity on old software at busy times.
          No I’m using chrome, other sites are all right.

  3. Morning All,
    Some nice trading there tmfp!
    Anyway all our SnP, FTSE, DAX orders missed by 0.2/1/4 pnts resp., although direction was correct.
    Seems even though algo’s mad this morning….still manages to miss our orders? 🙁

  4. Resistance still at previous bounce high at 70/880, short term range to break 58/72 850/900, as usual bearish and short although we haven’t retraced as strongly as DAX.

  5. Stuck in no mans land between S1 at 6270 and major support at 6250. Not much to do until those levels get hit.

  6. Bloody cold out there!
    So, 45, what to do……wait for a longer exhaustion candle for a very oversold bounce.

      2. Sorry, Senu, typed that before I saw your post, wasn’t directed at you specifically, good luck as ever

        1. Re: next support, sorry to say there isn’t really much I can see for a while. Nick’s Bianca at 36 hasn’t really broken and we might revisit the scene of the crime i.e. bounce to 50ish, but that’s about it.
          Personally I’d dump that long b/e, R/R is terrible even though we’re low.
          Don’t shout at me if you do and we go back to 6300 though please.
          🙂

          2. Stranger things have happened, depends on the DOW for the rest of today, and what can Yellen say to give them a bull excuse?

        1. $64.000 question there custard, the FTSE’s the worst of the three to judge.
          From a basic technical standpoint, look at the weekly and tell me where’s the support before 6050?

          2. Lol, she hasn’t got too many bullets left to fire, like Draghi, they can talk the talk but the only walk they can walk is QE.

        2. Times dont seem as bad as the visit to 5950. Mind you what is worth thinking about is this is happening without any bad news! Rates were going to go up!

          4. Yes, shorted the break of 45, thought I’d posted it.
            No target, still original stop of 62, be interesting to see what the yanks make of this.
            My channel support is 6190.

          2. lol yeah, a keeper alright, keep you poor….
            I’ve put a platform limit at 6180, might get a bit hairy.

  8. I bet they are sat in oak panelled boardrooms smoking big Cubans,and drinking scotch and laughing :0) I’m not cynical honest!

      1. I’m not buying any of this WSF, as soon as some positive sentiment returns it’ll shoot back up,I’m going to make myself a nice dinner,if your trading very best of luck buddy !

        1. Thanks,just read something about low volumes on Fri 13th’s and had a look at the annc’s due this week and feeling a bit cautious.

          FWIW John Burford had the 6200 area as a target 50% retracement area on the climb to the Oct high and the 61.8% below that just over 6100.

  9. Hi Chaps,
    Bit distracted with other things this morning …..
    Missed the early 6250 Long – nerves got the better of me.
    Here 6233 seems a logical place to go Long for a bounce

    1. The price of crude is a good indicator of how crap the world economy is, and despite Yellen, Draghi etc. that’s exactly what it is.

    2. We are in a “lines on a chart don’t matter” territory now mate.
      Don’t do FOMO (fear of missing out) trades, just watch.

      1. Yep …Rubbix Cube …when you consider all aspects, it’s a case of ‘scratching your head’ and think “how do I get out of this one?”

        1. I was serious it is good to hear it said.Sorry if I sounded sarcastic 🙂 (we are going to get stuck in a misunerstanding loop.)

      2. 🙂 Yes I think the rule is, Technical Lines work best when you dont have an open trade.Re what anstel said earlier, a shot across Yellen’s bows before she opens her mouth has happened before too.

          1. Sorry WSF, wasn’t meant to sound like that, just don’t like seeing the chaps get cut fingers.
            There’s always another trade and another day.
            I mean what does one do at 6200, jump on the bear waggon, or buy it cos it’s “cheap”? People have been buying it cos it’s cheap for the last 50 points…

          2. Posted in the wrong place above,no apology needed tfmp I was serious it is good to hear it said.Sorry if I sounded sarcastic 🙂 (we are going to get stuck in a misunderstanding loop now.)

    1. Hiya mate,I’m just eating my dinner,rump steak,leeks,potatoes,carrots,sweet potatoes and some broccoli, well thought I’d enjoy my last supper :0), of course I still have my long,I don’t think everyone’s dumped their index linked pensions so I thought I’d hang on to my long as well. It’s goin to collapse one day for sure but maybe not yet good luck buddy.

          4. To be honest, it has been confusing with the direction, I personally think the rally is not over but not sure how much the market wants to pullback. I’m thinking 17250-300 depends on today’s close.

            I had a short on Dax and took 50 points of it.

            I now have a binary on the Dow which I bought at 9, I will leave it for the day.

          5. Well done getting your 50 points from the Dax RJ, I know nothing about Binarys I keep it as simply as I can, Today has been full of unexpected surprises,With this trade I’m in now,as it has not gone to my original plan I have adopted the old investing adage,it’s not timing the market it’s time in the market. It may work it may not,time will tell.very best of luck buddy.

        1. Yes it will Senu, either rally on short covering and profit taking, which I don’t think there will be much of, because this sell off feels like long liquidation, or collapse under stoplossing and weak hands not prepared to hold overnight.

      2. haha, yes! Works very well with historical support levels and pivot points. None of that this time though, took a quick 6 points and got the hell out.

      1. The area to watch then, potential toxic combination, Yellen’s tired bullsh*t and a big support area.
        Getting a little overexcited here, sorry chaps.

  18. So MHH approaches…
    Dow stuck and not particularly interesting, between 515 and 570.

    We’re 82/05, so three failed attempts to rally over 200.
    I’ve taken out my short, so playing those ranges atm with small stakes and 10 stop on the short side.
    Watch the comparison with the DOW, if we sell off <80 and they don't, might be worth a long for after hours.

      1. Hard to tell Senu, I’m short at 06 obviously looking for last 10 minute weakness despite breaking out of the range.
        How many times does the DOW rally about half 3 to 4 oclock? Seems like every day…

          4. Yeah, was a good day that I’d been expecting and I was lucky enough to recognise it early for what it was.

            Catch you tmrw briefly, I’m out most of the day.

  19. One final trade for the day…long from 2057 on the S&P. We’ve got current and historical support and its S3.

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