Support 6315 6301 6277 6243 Resistance 6322 6347 6358 6383

Good morning. Pretty bearish day yesterday as expected, though it didn’t quite reach that 6385 level first thing before dropping 100, instead deciding to drop from 6382! Having breached 6300, the bulls have fought back a bit and there are a few buying signals starting to appear so we might well get a decent bounce today. We have tested the bottom of the Bianca channels, and for today the 10 day is 6277 and 20 day at 6301. Chinese CPI misseed expectations to print a 6-month low while PPI posted a 44th consecutive month of decline.

US & Asia Overnight from Bloomberg
Asian stocks joined a global selloff amid concern that U.S. policy makers will next month end an unprecedented era of record-low borrowing costs, and as investors awaited a Chinese inflation report. Material and technology shares led declines.

The MSCI Asia Pacific Index dropped 0.4 percent to 133.16 as of 9:00 a.m. in Tokyo as Japan’s Topix index slid from an 11-week high. The Standard & Poor’s 500 Index retreated 1 percent on Monday as investors confronted the increased likelihood the Federal Reserve will boost interest rates this year. For Asian asset managers, the prospect of tighter U.S. policy is compounding concern about the growth outlook as China’s expansion slows. Producer prices in Asia’s biggest economy fell for a 44th month in October and consumer inflation decelerated, according to economist estimates before a report Tuesday.

“In what is now a regular event, global markets sunk overnight and are pricing in the worst of the U.S. and China,” Michael McCarthy, chief market strategist in Sydney at CMC Markets, said in an e-mail to clients. “According to this view, China continues to weaken toward implosion, but not far or fast enough to head off a lift in U.S. rates.”

The Topix fell 0.8 percent in Tokyo, while South Korea’s Kospi index lost 0.5 percent. New Zealand’s S&P NZX 50 Index slid 0.7 percent. Australia’s S&P/ASX 200 Index dropped 1.2 percent. Markets in China and Hong Kong have yet to start trading, while those in Singapore and Malaysia are closed for a holiday.

China Futures
Futures on the FTSE China A50 Index of the nation’s biggest companies dropped 0.8 percent in most recent trading, while contracts on the Hang Seng China Enterprises Index of mainland shares listed in Hong Kong fell 0.9 percent. The Shanghai Composite Index jumped 1.6 percent on Monday to cap a four-day, 10 percent surge.

The OECD trimmed its global economic forecasts for the second time in three months as slower growth in emerging markets spilled over into countries such as Germany and Japan. World output will expand 2.9 percent in 2015 and 3.3 percent in 2016, down from the 3 percent and 3.6 percent predicted in September, the Organization for Economic Cooperation and Development said in a semi-annual report published Monday.

China’s consumer prices probably increased 1.5 percent in October from a year earlier, while factory prices slid 5.9 percent, according to the median estimates in Bloomberg surveys of economists. Export and import figures released at the weekend missed projections.

Futures on the S&P 500 were little changed on Tuesday. The measure’s slump came after U.S. investors shrugged off the threat of higher rates at the end of last week, focusing instead on a blowout jobs report that signaled the economy may be ready to withstand tighter monetary policy. That sentiment was reversed on Monday in the absence of any additional data and after American equities ended last week near their highest level in three months. There’s a 68 percent chance the Fed will move on rates in December, futures trading show. [Bloomberg]

FTSE Outlook

FTSE 100 Prediction
FTSE 100 Prediction

Feeling slightly more bullish today and we have a bullish set up on the 30minute chart just materialising as I write this, so if the 6315 level holds as support we could get a rise to test 6355 and possibly higher. There is a dividend of 11.7 for tomorrow as well, though not massive, it worth remembering. All that said, there is a fairly decent declining 30min channel so the bulls will have a bit of a job to break the 6355 area – we also have resistance here on the 2 hour chart. If they do break it then a rise towards the top of the 10 day Bianca at 6397 is likely. The 10min chart also infers an initial rise this morning with positive moving averages for the bulls and a rising trend line.

109 Comments

  1. Morning,That 6277 10 day Bianca channel Support is yesterdays low too and just over the 50 day sma (6271),so it looks like somewhere we might test.There is a U.S weekly consumer Spending number at 13.55 which I suppose might be meaningful for Christmas spending obsessed,Consumer economy believers 🙂 .

      1. L 6283 – I’ll Add at 6278 if it goes there.
        Reason – RSI Trio at the same as EMA & TS looking lower :-/

          1. Suddenly the FTSE is looking better supported than the rest.I’m watching the RSI 6 nowadays by the way,thanks for that.

  3. I love the smell of red candles in the morning 🙂

    ~6330 opening, insanity.
    Do not long this sh*t till at least 6250. End of message.

    1. Having said that, the DAX is very overdue a bounce from 740 if it struggles up to 790+ could be worth a short.

      1. and that looks like all it could muster after a 120 pt drop, 20 pts.
        That’s not good.

        Anyway, as I said yesterday, this is standard operating procedure for a ranging market, as soon as the high/low extremes are threatened then the relevant bull/bear gets all rabid about a breakout.
        We’re either going to go for a V shaped day or trend down, and that will depend on the DOW to a large extent.

        First thing the FTSE’s got to do is break 6282 and turn this sideways stuff into some sort of bottom.

      2. tmpf – This is a new one – I’ve almost got a Trio of Trio 1 / 5 / 10 min !
        (The 1 min Flips in and out)
        It’s a bitch – because it just ain’t responding . Trend indicators still look “V”
        Patience me thinks ..

        1. Sure, R/R on a short here is terrible, I’ve covered 75% of mine tyvm.
          Re: no response to RSI, I covered at 0920 with 3m 10 @ 17.7 and 1m @ 14.6…that was 6280 and no lift whatsoever.
          That’s usually a sign for me that it’s a trending day.

          3. They do indeed say patience is a virtue….

            If we don’t bounce now 68 then time for another leg down I think, although mid morning selloffs are rare.

          5. tyvm=thank you very much, I always burn a bit of incense to the Trading Gods when I get it right (figuratively speaking of course).

  4. A trigger for a rally from here would be the Chinese announcing they were going to throw a few zillion of ‘stimulus’ at it, I suppose.

    1. I’m sure there is something lurking in the news or media that is going to trigger a push back up,it’s just playing with traders emotions in my opinion.

      1. Only minnows like us are prey to emotion influenced trading, the market moving trades are mainly by HFT programs which just crunch the numbers.
        I appreciate you’re probably a bit stressed atm being long anstel, and I wish you all the luck as usual, but where and why would your long patience wear out?

        1. I’m not stressed at all tmfp,the way I see it the paper money everyone’s so worried about losing isn’t worth anything anyway,and long term you are right this lots going to collapse,and when it does they will probably want to raid people’s bank accounts because the banks have no money so we will get our money nicked anyway,might as well have some fun on the way hey,just chill out and see what happens,the bankers have put some effort in to get the markets propped back up,why would they stop today,going for a cup of tea :0)

          1. Fair enough, although Financial Armageddon type thinking usually predisposes people to bearishness, see ZeroHedge for example.

          2. Kickin’ myself a little bit re Lonmin .
            Generally – SP touch Rights Issue Prices.
            Lonmin’s Rights Issue Price 1 p – Looked yesterday Quote was at 16p …
            It was up first thing yesterday 10% then fell back – today 9-10p.
            This was a £40 Hi (2007)
            & as pointed out by someone on Reuters – the Lonmin Rights Issue – doesn’t mend the price of Platinum.

          3. The system pisses me off,it’s all a load of bollocks,everyone’s worked their tail off in life to accumulate so called wealth,they have traded heartbeats for money when in fact it’s just pieces of paper with numbers on not backed up by any substance.i.e. Gold standard.i wish I had realised sooner! I’m going to stop ranting now :0)

        2. I used to think the worst case scenario with blowing up accounts was getting a Job digging holes or something,but then I found out you need a Safety in Small spaces Certificate and a CSCS card to do that nowadays,so turns out I’m not qualified 🙂

          2. 🙂 Thanks,you never know. I’ve done a Pergola and a Patio and my tip for that kind of job would be get a Nail brush and definitely agree in advance what it is supposed to look like when it is finished.

  5. OK – I’m hedged out on these Longs .
    The charts are still pointing “v” so until this changes that’s my bias (S).

    1. Be careful you don’t get stuck with your short hedge Hugh if it bounces,we are quite low here and Xmas is around the corner.

      1. Hi Anstel – A few months / weeks ago I would have let these run, but I am trying to be “good” and set stops etc and close at the end of the day.
        I’ve closed the hedges – now.

        1. Hi Hugh I have used hedges before a lot but when the market was at 7000 ish and had dropped to say 7650 or so.its a bit low in my eyes at this level.i used to have short hedge on a contract and be long on the FTSE cfd so the dividends would help to pay the finance on the long side.Then I would trade long at 66.6%the size of my long term short contract.If the market crashed even if I didn’t close the long I would be up 33.3%.

          1. Atleast someone understands my angle of the hedge !
            It’s been a bit of topic in the past . I did quite well with it when the FTSE was 6850.
            I’ve found I have to be a careful where I’m considering a hedge market highs – lows.
            I’m not really to sure where we are at the moment though…
            Alternatives to CFD FTSE is IUKD
            isharesUK Dividend

      2. Hi Hugh,I made a mistake though when I was hedging,my hedges started to show some quite attractive blue numbers,I got three cycles out of it but then when it really would have made my a lot of money I’d taken it off for short term gain,Sods bloody law,that’s why I’m all about being patient.

        1. Yes I know what you mean…
          I’ve done similar and am aware that I’m actually trading my p/l rather than the chart if you follow me 🙂

    1. Over the last few months …
      I’ve become aware of how different traders view charts…

      Set “A” – views charts & trade “what they think” will happen.
      &
      Set “B” – view charts “as is” (small time frames) & trade accordingly letting the
      chart components guide them.

      Which set would you be in – “A” or “B” ?

      I struggle because I know I jump from one set to another !

      1. I have been trading off and on for 44 years, I learnt my trade on the LME (as I have probably bored you with before). I learnt 5 minute ‘ring craft’ and that’s why I trade like I do.
        Good entry is of paramount importance to a good trade and fight for every point.
        I don’t do pivots, MA’s or highly technical stuff like clouds etc. just get in there well with the help of rsi and deviation from mean, book profits (too early usually) and fight.

        A bit of bargain hunting about now, if DAX can get through 10780 there might be a bit in it, but I’m looking for a fail, stop to 72.

        1. Thanks tmfp – I miss posted it in this “section” & know you’re an experienced trader.. I’ve learn’t alot from following your posts.
          What is 5 Minute ‘ring craft’…if you’ve got a moment

          2. The LME was open outcry, 5 minute rings in copper, tin, lead, zinc and silver, later added aluminium.
            The ring would start with a number of orders on our book and more constantly coming in and build to a last minute crescendo.
            You had to be aware of many factors, it was great fun and gave me a ‘feel’ for weakness and strength over short periods.
            The closest I can get to that is the 80 spread on RSI 1min, you’ll see me happy with a turn on that, price is secondary.

            Bugger, missed the 13.8 long.

  8. Over the last few months …
    I’ve become aware of how different traders view charts…

    Set “A” – views charts & trade “what they think” will happen.
    &
    Set “B” – view charts “as is” (small time frames) & trade accordingly letting the
    chart components guide them.

    Which set would you be in – “A” or “B” ?

    I struggle because I know I jump from one set to another !

    1. Or …to set out the two sets again
      Set “A” – would use oscillating indictaors

      Set “B” – would use trend based indicators..

      1. You can see my point from my earlier post (9:16 / 10:16 – FTSE 6290)
        Trend “Down” assessed (S) = SET B
        Subsequent Trade (L) (10:03)
        RSI Oscillator = SET A

        1. Hugh what you said earlier about Rights Issues,Lonmin and the general rule you can play the exact opposite way with dodgy Co’s on AIM ,where a placing can put a ceilling on the price not a floor because the headline number isn’t the “real” one.So xx Capital Partners or somesuch name, take the placing at a discount to the mkt price and actually at a discount to the stated price for whatever buried reasons/methodology then dump them and short it down(probably).They take a fast guaranteed profit that way in exchange for cash.Always worth looking to see how long they are required to hold them (if there is a time period)and shorting to that time scale.Talking about classic AIM co’s with no income,heavy administrative costs and some wonderful story about massive profits later.The sort of Co’s tipped in unsolicited emails.There are always the same Finance Co’s taking up the Placings too and usually the same professional Directors who have this experience in more than one of their PLC’s.

  9. If Jack 2 is about Lufthansa cabin crews are planning a strike between 11nov and 13 nov.might be useful to know if trading the Dax.

      1. The cabin crews of Lufthansa the German airline are planning a strike between 11th of Nov and the 13th Nov. It’s worth bearing in mind as it could effect lufthansas share price which trades on the Dax.

          1. It’s only one company in the 30 on the Dax but it might have a negative impact,so worth making a note of.good luck.

  10. Reversal trade from 6250. Bounce from the low on 14th Oct. Looking for about 70 points, but I’ll scale out on the way up.

      1. thanks tmfp. I’m favouring orders at the moment to get exactly the price i want. If the order doesn’t get hit then that fine.

      1. out for 6

        To the DOW then: IG expects around 684, 45 below last night’s close.
        Downside, 660 and 620 should hold, plenty of room on the upside although 780 previous lows/bottom of top might slow things down.

        72 held again, see if it can bounce a bit better this time

  14. tmfp
    I just wondered how many points you’ve netted today
    – Just trying to get a gauge of how useless I’ve been 🙂

  17. Charts are not my strongest point but we seem to be getting the higher lows in the last hour,if the Dow can push up north of 770 and find support I will be encouraged.

    1. You’ve certainly got good support so far at the 17660 level I mentioned earlier, but you’ve also just had a second failure to get through 17740.

          1. Third attempts are usually the make or break, watch the rsi too, if the rsi is overbought 80+ then it makes the break through less likely.

          3. I think it is an hours thing. I am starting to feel like the short term trading is getting more reliable for me.In the past I probably would have taken an a.m loss on a different timescale and carried a losing streak into the intraday stuff but now I have a better perspective on drawdown I think…fingers crossed etc etc and intraday Friday and today has been better and felt better than I remember it being in the past 🙂 Profit on Friday and trading into a profit today.I’m guessing that is true for you too anstel,learning from putting the hours in.tfmp creates a good motivation that is for sure.Thanks tfmp.

  19. Hi WSF,I have traded individual stocks over the years with mixed results,but I have only been trading CFDs for just over two years.i don’t think there is any substitute for putting in the hours to gain the experience,I have had a couple of friends that tried it but they didn’t make instant gains so they gave up.Its very difficult to be consistent,I can make the gains but I’m trying now to learn how to keep them.Overconfidence,trading to many contracts,and wanting to always be in a trade are areas I have failed on in the past so I’m trying to make the changes I need to become consistent.Very best of luck and never give up.

  20. I’m on the 5min dow chart RSI 14 period…..the Rsi is about 58 ish and we are at 17724 tmfp said if the Rsi is over 80 it may not break through 740 maybe this time it will hopefully.

  22. Hi Chaps – Still here …
    Just going through some of the stuff today.
    Realised that I’d fiddled with one of my RSI and had set it from Close – to High. This seemed to give me entry a little bit to soon this morning. Tut …tut …bummer !

    1. I don’t trade individual shares at the moment hugh I’m concentrating 100% on indices.Great we have just broken 17762 quite strongly all hands to the pumps.

    1. Let’s break 17800 next I have a renegade long at 816 which can’t wait to deliver some points hopefully :0)

  26. And through, there you go anstel 🙂
    It was the 10 period rsi on 1 or 3 min that I suggested keeping an eye on.
    Anyway, you’re in clear air for maybe another 40 pts I reckon.

    My pleasure, WSF 🙂

    1. Thanks tmfp i will experiment with the 10 period RSI tomorrow,I just have the standard 14 setting at the moment.if I don’t catch you again this evening have a good night.

        1. Just moving it up a few points from the 61.8% ,be a shame not to get the dividend and it looked like it was climbing at a fair rate a while back 🙂

          1. WSF just a quick mention,I think the dividend is applied tomorrow evening after 10pm.we used to get it Tuesday nights but now it’s wednesdays to the best of my knowledge.

          2. Thanks,that sounds right now you mention it.Must be tired.Cityindex are a mess with the div anyway,they dont even say what it is in their email or on their platform anymore because they dont want to pay for the newsfeed.Have a good evening.

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