Support 6346 6327 6318 6287 6283 6273 Resistance 6351 6362 6378 6409 6421 6442

Good morning. Not the best day for the order trades yesterday with the FTSE long getting stopped out, Dax and S&P missing (just!), but the gold long at 1172 ran to target at 1178 so all was not lost. The Dow had an interesting little spike up at the closing bell to hit the 17250 level mentioned yesterday – thought it might have tried to hit that properly rather than a spike but anyway, hit it it did, and then dropped back 70 odd points so far. There is a chance that was the last little hurrah from the bulls and we are on for a leg down now (16500 maybe on Dow). Certainly Tuesday’s session in Asia has been a little weaker, and the ASX has dropped so the FTSE might we’ll follow suit today. Apart from that quick move to test 6410 yesterday was pretty bearish too in the end.

US & Asia Overnight from Bloomberg
Asian stocks fell, paring the benchmark regional equities gauge’s biggest monthly rally in five years, as material shares led losses.

The MSCI Asia Pacific Index slipped less than 0.1 percent to 134.01 as of 9:08 a.m. in Tokyo. The gauge surged 8.3 percent this month through Monday, on course for its best monthly advance since September 2010, as Chinese shares rallied and traders pushed back expectations on the timing of the Federal Reserve’s first interest-rate increase. The global stock rebound in October has restored more than $4 trillion in equity value.

“The three-week recovery is approaching an exhaustion point,” said Matthew Sherwood, head of investment strategy at Perpetual Ltd. in Sydney, which manages about $21 billion. “Valuations have expanded and 2016 earnings have not been upgraded.”

The October surge pushed valuations on the MSCI Asia Pacific index this month back above their five-year average, Bloomberg data show. The index trades at 13.6 times estimated earnings, the data show. Equity gains came after last quarter’s volatility triggered by China’s surprise decision to devalue the yuan in August.

Japan’s Topix index gained 0.5 percent. South Korea’s Kospi index was little changed. New Zealand’s S&P/NZX 50 Index rose 0.7 percent.

Australia’s S&P/ASX 200 Index dropped 0.3 percent. The nation’s banking regulator will take additional steps by the end of 2016 to ensure Australia’s lenders have strong capital levels, the government said Tuesday in its response to the Financial System Inquiry.

E-mini futures on the Standard & Poor’s 500 Index slipped 0.1 percent. The underlying gauge closed little changed on Monday at the highest since Aug. 20, rising above a level where past rallies since the summer selloff have lost momentum. International Business Machines Corp. fell in late trading as quarterly revenue missed estimates. [Bloomberg]

FTSE Outlook

FTSE 100 Prediction
FTSE 100 Prediction

I have gone for an initial climb off the 6345 support area to test the top of that declining 30min channel, however I think the swing might be gong the bears way over the next few sessions. That spike not he Dow last night looked a bit suspicious (mind you, so did the FTSE spike up to 6410 then swift reversal yesterday). We are just below the daily pivot at 6351 as I write this, and the top of the 10 day Bianca channel is slightly lower today so starting to move downwards. Bears will be keen to 6280 on any downside moves as there is daily support there. As mentioned above looking at dow, we could get a leg down to 16500 from 17250 last night, which would take the FTSE down to 6100ish, maybe lower. Initially it all looks bearish for the moving averages on the 10min and 30min charts, so the bulls will need to be quick out the blocks to break the 6351 pilot for a push up. The 2 hour chart has resistance at 6362 as well, so a small short around these area could be worth a go if you fancy backing the early bears! Other wise wait for 6375.

81 Comments

  1. Morning.
    Whenever IG go down to .2 increments you know it’s quiet.
    No impetus to break out on the upside so far so probably drifting down to a little bit of support in the low 30’s then test 20?
    Glad to see Nick’s put that madness about new highs this year on the back burner 🙂

    1. Took me 10 minutes and 30 pts to type that 🙂
      Pretty oversold around 35, see the strength of things by the size of the bounce (if any).

    3. Morning,I think whenever people see,Yellen speaks on the days events it just strips all of the sense of worth out of them.

      1. She’s one of that new breed of bureaucrat/politicians WSF, impossible to gauge a) what she’s going to say b) what it means c) how the market’s going to react.
        I just look at the numbers, ignore the noise.

        1. It’s the way you can no longer say she even means what she says at the time she says it that gets me 🙂 I think Draghi on Thursday might be less pointless though.

  4. Just missed the b…dy trade. Tried long dax, closed +2 because I asked myself a question: do you think you’re going to win in it? The answer popped up: no.

    1. A decent pull back would be nice to short again. 10150 would be nice. But will we have it? Probably not. And if we have it, the price will decide to reverse all together. So it’s just a waste of time. Plus it might happen at around US open when I will be definitely out.

      1. Going into the right trade it’s like going into a very cold water. Because you feel it’s right but don’t have enough courage. But going against the trend it’s like feeling a bit mischievous, naughty and exciting but it’s not necessarily good.

  5. Hi Guys,

    I am new to this site, please can you help. I am long at 6337, do you guys feel that I should exit? According to Nick’s trend the market seems to be going down.

    2. The first thing you need to learn is that we don’t know where the price is going. We can only think, assume, predict and hope (the last one is not the best). We can only think logically and plan our actions.
      Logically the price should pull back to create a correction to a move. Sometimes it doesn’t happen or pull back could be tiny if the move didn’t finish. How to know the end of the move? Oh, if we knew it we would be millionaires.
      At the moment, we don’t know if FTSE’s move has finished but we assume the pull back started (or reverse of the price, whatever it is) and if you take 6321 as the bottom so you HOPE for a pull back to 23, 38, 50, 62%
      Here at the moment of writing it would be: 332, 339, 345, 350. Will it get to any of them? I have no idea.
      So you need to plan the exit. How much you are afford to lose on this particular trade and on what price, and what the reason for putting your stop loss there.
      I cannot find any close support levels apart from given pivot levels. The closest is 323, next one 293. So in conclusion: looking at all this formation I would HOPE that it will not go below 321 as below that it could go to know knows where. Your trade 37-21=16 OK, give it another 4 points and set your loss to say -20 points, still hope it will reverse… But you need to ask yourself a question, do you want to lose more than 20 points?

      1. Just to add, you need also to ask yourself what you are planning to achieve with this trade: to come out on b/e as soon as it gets there or you are planning to win? If you are planning to win so you BELIEVE the price is going to a certain level? If you don’t believe, it’s not the right trade, get out at FOM (first opportune moment).

  7. Thanks for the advice Jack. Now that we have broken the 6321 level I am assuming markets will drop further.

    1. Hi rav, don’t be too hasty on exact points, the market looks very quiet and not every move is steeped in deep significance..

      1. Agree with tmfp. What I said was an idea of possibly actions. Personally I would try to add up first on another dip and see if pull back starts. It’s risky tactics, but I add only once. Plus we are in a relatively bullish market and on 1 hour we are only touching 200EMA. It could bounce.

        1. It’s hard to control somebody else’s trade and hold responsibility for it. I know what Nick feels like sometimes. 🙂

      1. I was selling for the DAX to get turned back again around 10115, but that didn’t happen, holding fire on the stop atm, probably try to take ~b/e and long it now the sideways range has broken out, although 38 is still the bounce high way back at 09.51.
        Overtrading and bored basically. 🙁

  9. That’s your bounce, Rav. It’s up to you if you get out now or try to wait. I cannot advice on that.

  10. Banging my head on a brick wall probably, bu even though 20 held well, going for a fail of this rally, short at 44 10 stop, on the basis of rsi overbought and 50% retrace of the morning.

  12. So, what do we expect from the DOW?
    Usual early run up and an attempt on new highs 17250+?
    Certainly hasn’t seen too much selling recently.
    Quite a few big names coming out with results this week, will have to be good not to disappoint, especially after recent bull runs like Microsoft.

      1. Maybe….FTSE now sitting back on 30, top of earlier support zone, maybe worth a little long with a 15 stop?

        2. Whatever Yellen says, she has a pretty good track record for it being the right thing, combined with the 20 support here and 120/150 on the DOW, might make it a buy around here.
          I think I’ll have a little punt at 23 10 pt stop

          2. I’m hanging on to mine for a bit, 26 stop, if it gets down there again I don’t want it.
            50 by the close….?

          6. and there’s my target, another 1/3 gone at 57 🙂
            Getting a bit hot on the DOW rsi now but they are on a roll, Yellen speak with silver forked tongue and 17300+ easy imo, maybe a little pull back first

          7. I think I’ll hang on to the remaining 1/3 till the close, with a stop at 42 just in case Yellen says It was all a joke or something

  13. Afternoon,just thought I’d chime in and say hello,nothing much happening for me just yet,I had thought we would have been higher than where we are by now,just keeping an eye on things from a distance,best of luck.

    1. Lol yeah saw you in the Forbidden Zone. It can be crazy, but there’s money to be made Hoping for a MLTM (mad last two minutes)
      🙂

      1. And got them…nice little bull run that, all out for +71
        🙂

        Still think we could be waking up to 6400’s, but like my sleep.
        Cheers

          1. You still holding longs then anstel?
            imo if the DOW can’t spin Yellen’s speak as positive and convincingly break to new highs tonight, ideally 17300+, then I’d count that as a bearish fail.
            Put that together with some average earnings from Microsoft etc. triggering worries about P/E ratios, and this week could end substantially down from here.
            If they do end 17300+ then we get yet another go at breaking 6400.
            Who knows……

          2. Hi tmfp,yes I have a long position I have built up,it’s the long side of that hedge from 10 days ago and I have been trading around the various positions that make it up.My B/e is at 6397.2 but I have to take the finance into account as it’s not a futures contract. I didn’t intend to sell the short side first originally,I got that wrong but I think we will edge up as I said 10 days ago or so and I put my money where my mouth is! I think it’s the right position for me but Its obvious I got the timing of the rise a mile off. Best of luck buddy.

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