Support 6288 6281 6255 6146 Resistance 6307 6308 6325 6333 6345

Good morning. Well that 6317 level proved pretty strong resistance – weird as the pivot was 6319 and the only thing about 6317 was it was the spot for my short order! I thought the third test later in the day when the US opened was going to break it but it didn’t and we fell away to an overnight low at 6255 – the bottom of the 10 day Bianca channel. Asia has been pretty optimistic and we are bouncing back to 6300 as I write this, mainly fuelled by further Chinese stimulus hopes. That said there is some decent resistance at 6307 not he 2 hour chart, and the 30minute at 6325.

US & Asia Overnight from Bloomberg
Asian stocks climbed, with the regional benchmark index heading for its first advance in three days, as technology and phone shares advanced.

The MSCI Asia Pacific Index rose 1.2 percent to 133.04 as of 9:47 a.m. in Hong Kong. The gauge slipped in the past two days, while the Shanghai Composite Index dropped for the first time in six days on Wednesday after data showed Chinese factory-gate prices matched their biggest slump since the global financial crisis, underscoring headwinds for the world’s second-largest economy.

“Stimulus hopes are putting a pause to the correction that we’ve seen this week,” said Audrey Goh, an investment strategist at Standard Chartered Plc in Singapore. “We’re expecting more stimulus from China since external demand is quite weak and domestic consumption has been decelerating. China could increase stimulus by increasing their fiscal spending.”

Japan’s Topix index rose 0.8 percent, reversing earlier losses of as much as 0.6 percent as the yen headed for its first decline against the dollar in four days. South Korea’s Kospi index climbed 1.1 percent after the nation’s central bank kept its key interest rateunchanged for a fourth month as it weighs a pickup in domestic activity against a continued slump in exports.

Regional Gauges
Hong Kong’s Hang Seng Index gained 0.8 percent. Taiwan’s Taiex index climbed 1.5 percent, while Singapore’s Straits Times Index rose 0.7 percent. Australia’s S&P/ASX 200 Index added 0.3 percent and New Zealand’s S&P/NZX 50 Index advanced 0.3 percent. China’s Shanghai Composite Index increased 0.3 percent.

E-mini futures on the Standard & Poor’s 500 Index rose 0.4 percent. The underlying gauge fell 0.5 percent on Wednesday as Wal-Mart Stores Inc. predicted earnings will decline next year and quarterly results from JPMorgan Chase & Co. disappointed.

Bets on the Federal Reserve boosting borrowing costs at its October meeting slid to just 4 percent and odds of an increase before the end of the year are now 27 percent.

Oil declined for a fourth day, heading for its longest losing streak since July, as U.S. industry data showed crude stockpiles increased in the world’s biggest consumer. [Bloomberg]

FTSE Outlook

FTSE 100 Prediction
FTSE 100 Prediction

Looking at the 2 hour chart there is resistance from the Hull moving average at 6307, so we may well get an initial dip from this area, down to the 25ema on the 30minute at 6385. If that hold initially and the bulls can build on the overnight strength then we might get another leg up towards 6325. However, from there we could well dip again as the Dow is just flirting with the 17000 level and trying to hold above it. If not then a dip down to 16500 still looks distinctly possible. Shorts off the 200ema on the 30min chart at around the 6320 area look like a decent play, and that would double top with yesterdays high as well. The bears will need to break 6255 or a leg lower, though the daily chart has support at 6240 with the 25ema and bottom of the 10 day Raff and then the 20 ay Raff at 6225. As such, while I am still feeling bearish for a dip from where we currently are, its important not to fall in love with the downside, as I think this will turn up again soon for a decent climb….. maybe all time highs before the year end? Thats a bold statement!

77 Comments

  1. “maybe all time highs before the year end”

    A bit early to be drinking Nick…. 😉

    Bemused by this early strength, managed to short that 1min double top, covered half (too early) at 20 on the way down and happy to sit with the balance till DAX has a go at 9970 again. Working on the basis of a ranging morning atm 6300-40.

    1. Morning,US election next year and we are half way through October,so less than 100 points a week would do it and next week is an ECB annc. that could get the ball rolling 🙂

  2. Morning All, we shorted 6320 – first thing, banked +11pnts quickly. Then next spike up managed to catch high 6337 and all out by 6321…now break time. No clue why it spike up suddenly?

    1. There are no reasons. Good scalping Nick 🙂

      DAX looks a bit lively, could drag us with it a way, still short 35, stop 42.

  3. Just thinking about Mali’s “why spike” question.
    It doesn’t do any harm to pull back from charts etc. and see the wood for the trees sometimes.
    What are we trading? The FTSE 100 (or whatever)…. What is that? It’s an index based on the shares traded in 100 different companies.
    Apart from us cowboys, there’s a continual in and out flow of investment going on, pension funds etc. liquidating and reinvesting, the real reason for the Stock Market in the first place.
    In relatively thin conditions, just a modest inflow of funds or a periodic liquidation of holdings can spike or depress prices temporarily, without it being of any significance or having any meaningful longer term impact.

      1. You must be a mind reader WSF 🙂
        We’ve talked about the influence of witching before and I usually sell the spike, been good to me so far.
        Re: volatlity, I just bought a little Nov VIX at 1818, looking for 20, maybe more. Sort of an option which would pay on a sharp down spike, but also maintain value unless we go dead, which I think is unlikely.

    2. Good point tmfp – especially after yesterday – talk of putting interest rate hikes back to middle of 2016 and I think it was the same in the US….for yield hunters some eq’s offer good value. iShares UK Dividend UCITS ETF is a good basket case!

    2. Depends Jack.
      What is the trend, for a start?
      Weekly is up, 30 min is up, daily is down, hourly is down.
      EMA is a series of lines which get broken or held all the time.
      I suppose it comes down to the way we are hardwired individually. I’ve always been a contrary type person, so I’ve developed a way of trading that’s based on selling strength and buying weakness. Other people are successful doing the opposite because they’ve developed an approach which works that way, and suits them psychologically.
      It’s all very well people saying being emotionless, trade the system, but we pick the system to trade with.

    1. Apart from when it goes down Senu 😉
      DAX seems to be leading the way slowly up, but bit of a nothing morning so far really.

        1. Yeah a couple of -‘s to start thr day is a bummer, isn’t it? I’m on +3 -1 atm, still short.
          Those pesky Germans won’t give up though, without them we were looking very flat still are really, compare: 08.30 10020/6338 to now 10070/6331.

  8. Morning Chaps,lots of fun and games over the last 24 hrs, I’m just sat up a tree waiting to pounce,as crazy as it sounds right now I agree with Nick,I don’t think we have seen the last of the all time highs! Have fun chaps catch you later.

  9. The 6340 level is holding very very very well. The majority of the other index’s keep on moving to daily highs and the FTSE is just ranging and i’m expecting a move downwards this afternoon. Famous last words

    1. LOL indeed.
      Got stopped out, ironically with us making new highs and the DAX not. Short again 47 for very overbought pull back

      Took +10

      1. Good trade. I moved my stop 6363 and left my short open. I don’t usually do this but had a good day yesterday so thought it was safe to risk more than usual

      1. I’d like to see <10030 on the DAX before getting too excited on the downside.
        Also we're only a couple of hours away from the DOW which put in a crappy performance yesterday. We're only above 6300 today because Asia liked the weak dollar.
        Not convinced at all on the long side.

  10. Im just wondering when QE4 with get rolled out. US inflation figures today and analysts forecasting deflation. Same plan as Euroarea earlier in the year? Going back up my tree now :0)

      1. I have that, pre judge a market and lose all confidence in where it is going when it moves against where you thought it would 🙂 I guess being bothered by that is what separates people from Central Bank Governors.

        1. WSF
          My typing may have mislead there – Short 6343 closed out for + 10 at ” All the threes ” (63) 33
          I haven’t got any thoughts about the market as such. WTFDIK
          Just haven’t got time today to watch the screens “in detail”.

      2. Nice to make a profit even when you’re not in the mood.
        Bit of a “will to live” scenario here too atm.
        Life.
        🙂

        1. tmpf – I never covered that RSI thing that we were talking about yesterday – will try later. But in brief – IGS has a tendancy to zero trades – e.g 1 Long + 1 Sell = 0 (Yep – Iknow you can do Force Open).
          On Saxo (which I’m using ATM) they open new positions. These are netted off at EOD unless you put Limits and Stops in. Based on the belief that RSI Trio entries are pretty good – most come into profit at some point or other.

    1. Yeah apart from the 11.48 short @35 lol.
      I’m a bit Thursday jaded and disinterested tbh mate.
      Grinding days don’t float my boat.
      Thinking about starting a medium term scale up short program from here to 6440…

        1. No, it was slightly oversold rsi after a trendline break usually means a rally back to test that level (35/38) and then a retest of the break low (25).

          Just failed at 33 indicates to me that 24 won’t hold this time but nearly DOW so be careful.

  14. Just to update in the forum, we shorted 44 ftse and banked all 25/26 region….for now out of all positions.

  16. My IG watchlist is all very exciting at the moment. Flashing away like nobody’s business but not actually moving

    2. It’s been suspiciously regular recently for the DOW to be firm between 1600-1630 supporting strength over here.
      I don’t fancy buying FTSE at these levels on the basis that that may happen, but will be looking for a last minute spike for a small short and cover after our close.

      1. No, missed it waiting for 60, got 43 at the close though, b/e stopping it for half an hour.
        Had enough today, that grinding boredom is more tiring that frenzied activity.

  18. Well I tried RSI 6 on the 1 min today on the FTSE and the Dow and based on other posts today was good day for it,but it didnt work for me,I found it added frustration to my day,skewed my R/R and contributed to a 42% SL rate and even without todays pretty dramatic slippage from the S/B co that’s a rate that I think is too high for frequent trading.I’ll try it again sometime,but not at the end of a week and not unless I’m sitting on a higher Cash balance,ideally one a lot higher than the one I had on Monday morning which,unbelievably,is where I’m back too tonight 🙂 Have a good evening everyone.

    1. WSF
      – Sounds like you had a bit of a tough time today. I was looking at it most of the day & thinking what a good day it could have been..
      I’ve run a Back Test on IT Finance Selling >80 Close at 30 or 10 point Profit
      & Buy <20 Sell at 70 or 10 point profit. It's a bit crude as you will see from me next post…
      The equity curve looks like this.
      It all went pretty well until 5:00 ish
      The chart is here:
      http://tc.md.it-finance.com/ProRealTime/display_chartimage.phtml?name=1j0lk7kg7flmsyf0kqcfx17x8&type=png&purpose=file

    1. Just rebounding above rising short-term trend, despite yesterday’s dip. It’s a bull’s world really Senu! 😀

  20. tmfp, I looked at 10min, 30 min and 1 hour and have seen the trend line was broken. On 10 min chart price was above 200EMA (dax, ftse), plus MACD was above 0. I would never short that hence experience so I let it go today as I was very busy all day out. Before opening charts right now I said: it was going up all day, I bet. The only option today was longs after pull backs.

  21. Evening all if anyone’s still around,I’ve been playing the waiting game this week mainly,just closed one trade for today,it was my two Dow positions I put on last night,opened at a combined 17046 and just closed at 17159.9 for +109.9pts,I’m pleased with that,goodnight all.

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