Support 6296 6287 6278 6266 Resistance 6333 6344 6352 6356 6402

Good morning. That was a busy start yesterday morning with the various short orders triggering on the Dax, Gold, S&P and FTSE and we did indeed get the dip first thing then the bouche back before the larger declines later on. Was a bit early with the second set of speculative shorts but well done if you held as they all came in well in the end! The big news for today is the ECB later, with the rate decision at 12:45 and the possibility of further stimulus announcements.Talking of the EU the latest one to kick off is Portugal whereby the Portuguese Left has torn up the script and demands the right to govern. Antonio Costa, Portugal’s Socialist leader and son of a Goan poet, has refused to go along with further pay cuts for public workers, or to submit tamely to a Right-wing coalition under the thumb of the now-departed EU-IMF ‘Troika’. Against all assumptions, he has suspended his party’s historic feud with Portugal’s Communists and combined in a triple alliance with the Left Bloc. The trio have demanded the right to govern the country, and together they have an absolute majority in the Portuguese parliament.

US & Asia Overnight from Bloomberg
Asian stocks fell from a two-month high, following a decline in U.S. equities, as material and health-care companies led losses. Investors awaited the opening of Chinese markets after yesterday’s slump.

The MSCI Asia Pacific Index slipped 0.3 percent to 134.17 as of 9:04 a.m. in Tokyo. The gauge surged to the highest since Aug. 19 on Wednesday, extending its October rally to 8.7 percent, as Japanese shares gained amid speculation the Bank of Japan will boost its stimulus program to stem weak economic growth.

“I’m finding it hard to get bullish especially after the run-up we’ve had,” Mark Lister, head of private wealth research at Craigs Investment Partners Ltd. in Wellington, which manages about $7.2 billion, said by phone. “I see more risks than opportunities. I’m pretty cautious on China and the emerging world and there’s more to come there in terms of pain and volatility.”

Japan’s Topix index lost 0.5 percent. South Korea’s Kospi index fell 0.2 percent and New Zealand’s S&P/NZX 50 Index rose 0.1 percent. Australia’s S&P/ASX 200 Index retreated 0.5 percent.

Santos Ltd., an Australian oil and gas producer, surged 18 percent as it rejected a A$7.14 billion ($5.15 billion) takeover proposal from Scepter Partners, an advisory firm that manages assets for Middle Eastern royals. The offer represented a 26 percent premium to the company’s last close.

Markets in Hong Kong resume trading Thursday after a holiday, while India is closed. Futures on the FTSE China A50 Index rose 0.3 percent in most recent trading, following a 3.1 percent slide in Shanghai stocks last session. The biggest U.S. exchange-traded fund tracking Chinese equities slumped 4.6 percent Wednesday, the most in a month.
E-mini futures on the Standard & Poor’s 500 Index added 0.1 percent after the underlying gauge retreated 0.6 percent on Wednesday. U.S. stocks declined after Valeant Pharmaceuticals International Inc. tumbled 19 percent, distracting investors from one of the busiest days for corporate earnings this season. [Bloomberg]

FTSE Outlook

FTSE 100 Prediction
FTSE 100 Prediction

We have bounced back from the 6300 tested yesterday evening and I think we will get a rise towards the top of the declining 30min channel at 6350 area before further downside. We have the daily pivot as initial resistance at the 6333 area, but looking at the 10minute there looks to be a chance that the bulls will pop above this first thing. The Dow managed to reach a high of 17315 yesterday, so still within that 17250/17350 area that I have been watching for a topping out before the next leg down. The bulls have held on pretty well really, as the bears have tried to drive it down from 17250 a couple of time but been fought back. This current drop is over 150 points though so should get a bit more momentum. It will be all eyes on the ECB announcement at 12:45 for rate cuts and any stimulus talk. If the bulls manage to break through the 6355 area then I expect we will see a test of the top o0f the 10 day Bianca channel at 6402. This will be a good area to short from.

65 Comments

  2. Hi All,
    Looks like all waiting for ECB now….boring range now….but will wait till Draghi done I think.

    1. I suppose it would be logical to look at a long on a dip for the inevitable pre Draghi hype run up into the 50’s?, especially if you think that 20 will continue to hold.

    1. Honestly, I’m out. Hate ranges. +2 Don’t believe it will short, just don’t see it without a spike or whatever.

      1. I was shorting 10250 for 2 hours up to now, too much for my patience limits when the price just sits in one place.

    1. Would have been crazy, hopefully he’s out buying a tree or something.
      10400 might provide a bit of resistance, look like all the positive spin has been spun although Draghi will probably drone on for a while yet.
      So, more QE for Christmas?
      Suppose the Yanks will get happy clappy and head for 17400, although a weaker Euro v $ isn’t particularly good news for them.

  11. I’m thinking if we get a sell off at Dow open might get that 17220,if not I will wait and watch.

      1. I think it’s a calculated risk. I’ll watch the SnP 500 and if we breach 2042 then i might look to close it. I might even move the stop up to 17400. I’ve not taken a massive position. I’m risking less than a 100 points for 300 potential return

        1. I have been short Dow before when all conventional wisdom pointed to shorts being in favour,lets put it this way I don’t take shorts lightly anymore , although I didn’t actually lose on that occasion I had to trade around the bloody position for a while. Best of luck with it though.

          1. I know what you mean. That’s what stops are for. I’ve had a good week so far and think there is going to be downside. In hindsight i should have waited for a better entry nearer 17350

        2. Nick K, I have been short Dow before when all conventional wisdom pointed to shorts being in favour,lets put it this way I don’t take shorts lightly anymore , although I didn’t actually lose on that occasion I had to trade around the bloody position for a while. Best of luck with it though.

          1. SnP 500 moving beyond my prefered limit. the Dow will follow. i’m not sure how far up but i;ve put my stop to 17405. I’m going to walk away

    1. We read so many times about running profits and cutting losses early but we just do the opposite.

      I don’t see this returning before 550 and possibly 635 (tomorrow).

      1. Jack the Dax is an Animal, the FTSE is more docile to trade,I’m really sorry for your loss,try to protect your confidence,it’s not you, The Dax is very lively and not to be underestimated.

  22. Momentum being lost on all three indices at the mo, not saying it’s time for a short, maybe they’re just taking a breather, but these rises are all Dec QE news inspired and I wouldn’t be surprised at a modest pullback all round.
    FTSE noticeably running out of steam as soon as 6400 comes in sight.
    BTD?

    1. I’m very surprised the FTSE isn’t pushing the 6500 mark Tmfp if you look at the Dow and Dax,my feeling is the FTSE is going to catch up but who knows,looking at the Dow I may be tempted into a small short if it hits 17450 for a few points.

      1. The FTSE/DOW differential market is quite interesting.
        It should really be measured in %’s, but basically it tracks the price chart quite well over the past 6 months, 9600-11400, currently 10940.

        Any particular reason for 17450, or just a hunch?

          2. No you don’t mean the Dax I’m not sure about this differential market I know nothing about it.

          3. Looks like you might be short soon then, should coincide with about 6400 for the FTSE.
            GL.

            It’s the difference between the FTSE and DOW Dec futures price, currently 17320-6380=10940.
            You can buy or sell it on IG or arbitrage it yourself. I made some good money in early 2015 selling FTSE buying DAX @ 2:1.

            Surprisingly, expressed as a % retracement of the Aug crash, the DAX is the one dragging its feet (51), with the DOW (74) most resilient and the FTSE in the middle (62)

          4. Thanks tmfp just been reading about these differential markets,there’s so much to learn in trading but the FTSE ,Dow and Dax are more than enough for me for the time being best of luck,BTW 17450 looks a bit early,don’t want to wake up tomorrow with any -200 pt surprises,maybe 17500. My FTSE long is almost in play now and all finance covered over the 2 weeks by last nights Dividend.just going to play it by ear GL.

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