Good morning I hope you had a good weekend. The bulls tried hard to break the 6400 level last week but its proved quite strong resistance, and the top of the 10 day Bianca is sitting at 6434 for today, so any breach might be capped there. The China wobble is all but forgotten about for the moment as Q3 GDP beat estimates offsetting last weeks disappointing CPI and PPI figures (from China) which kept alive the concerns about the economy slowing down. Its still eyes on the Fed for interest rates decisions as poor inflation data from Western countries will delay interest rises in the US and the UK, and Canada and the ECB could be on the way to additional loosening of its monetary policies. I still think it will be next year till rates rise in the US. UK news over the weekend is starting to get more Euro focussed in advance of the referendum, whilst UK consumer confidence climbed to its highest level in at least four years in the third quarter, as low inflation and rising pay packets saw households shrug-off this summer’s market turmoil.
US & Asia Overnight from Bloomberg
Asian stocks pared losses, Treasuries erased gains and the currencies of Australia and South Korea strengthened after China reported third-quarter economic growth that beat estimates.
The Shanghai Composite Index rose to a two-month high as the better-than-estimated 6.9 percent expansion in gross domestic product, while still being slowest pace since the global financial crisis, signaled the China’s stimulus policies may be taking hold. The MSCI Asia Pacific Index pared its drop. South Korea’s won rose to its strongest since July, while the Aussie reversed earlier losses. Gold retreated and Treasuries were little changed after rising with the yen and euro before the data.
“Sentiment is positive on hopes for some more stimulus as the growth number beats the estimate but it’s still less than the government target,” said Yen Chiu, a Hong Kong-based trader at Shenwan Hongyuan Group Co. “The market won’t be as volatile as before with investors’ confidence on the mend.”
Stocks
The MSCI Asia Pacific Index lost 0.2 percent by 1:01 p.m. in Tokyo, slipping from its highest level since Aug. 20. The Topix index fell 0.3 percent, paring a drop of as much as 1.1 percent, while the Kospi index in Seoul slid 0.2 percent. Australia’s S&P/ASX 200 Index fluctuated.
Hong Kong’s Hang Seng Index was little changed with the Hang Seng China Enterprises Index, a gauge of mainland Chinese stocks listed in the city. The Shanghai Composite added 0.5 percent. Economists had projected GDP growth of 6.8 percent.
Futures on the Standard & Poor’s 500 Index dropped 0.2 percent to 2,021.75, after the U.S. benchmark ended Friday at an eight-week high, capping a weekly advance of 0.9 percent.
“Although there is a lot of skepticism about official releases, markets will continue to follow closely the numbers to get an idea on how far the government is willing to let the deceleration go,” Barclays Plc analysts, including Andres Jaime, a currency and rates strategist in New York, wrote in a client note, referring to Monday’s data out of China. “We see some downside risks for emerging-market currencies in case data disappoint or there are more signs of financial instability in the Chinese markets in the weeks to come.”
Commodities
Gold for immediate delivery slipped 0.4 percent to $1,172.58 per ounce after increasing 1.8 percent last week. Monday’s decline follows a private report on Friday that showed U.S. consumer sentiment rose more than forecast this month and government data Thursday that showed jobless claims unexpectedly slid to match the fewest in four decades. [Bloomberg]
FTSE Outlook
There appears to be fairly decent support at the 6340/6350 area this morning to start with, so with bearish moving averages to start the day I think we will get an initial dip to this area. The bulls will be keen to break the 6400 level which capped the rises last week, though with the daily channel top at 6434, and the top of the 30 minute rising channel at 6421 they might not be able to push too far past it. As such I think that a rise to this level could well be worth a short. If it gets really bearish early this week then there is daily support down at 6278 for the bottom of the 20 day Raff, and the bottom of the 10 day Bianca at 6276. Good area currently for a swing long. If the bears do break the 6340 support area this morning then this area looks likely. Just looking at the Dow though, I think it could push a bit higher towards 17250/350 today. Generally feeling a bit more bullish for today, certainly to start with so buy the dips down to 6350ish.
Morning.
Looks like another fail to break 6400 properly and a dearth of buyers at the mo. Looking for a very oversold long around 65 for a bounce right now. 7.5 on the 1min RSI !!
Treating it as 6350/6410 range till lunch.
Small long at 62 10 either way
Not doing it for me out for a couple
made a nice 20 this morning and now followed you tmfp.
Yeah with hindsight I bottled out custard, hope you got your +10. I wouldn’t be marrying it for much more tbh.
I don’t like starting the week with red ink and saw a possible test of 50 which I didn’t fancy.
out for +12. Didnt like that!
may test it now
Had a nice short from 6400, just closed it out at 6365 (R1 to S1). Be interesting to see if 6350 area holds
still buy the dips Nick?
Till 6350 breaks, yes
Looks like longs unbeatable.
Appears to be doing one of those quiet drift ups which can accelerate so I’ll jump on for a little long at 70 6pt stop. Not a very good trade though.
No, out for nothing. I hope it’s not going to be one of those days.
I don’t think I’d want to be short DAX right now, there’s a push up brewing I think…
The swings today have been very kind to me. I went short on the DOW at the close Friday which i thought was a no brainer but worried over the weekend it was going to open 100 points. it didn’t, dropped off 70 points and I closed for 60 points. then a long on the ftse from 6365 closed up at 6395. then short back down from 6389 to 6372.
Long ftse 6367. I can’t believe it hasn’t moved with the DAX passing 10200
The Dax is still below its Sep highs the U.k is above its highs.
I was thinking just of the terms general momentum. The CAC moved in line with the DAX the FTSE went in reverse.
I had a different feel off the CAC,was trading it and didnt like the way it seemed to have found resistance and be testing support,low 20’s to around 12 I think it was,started the day expecting 30 to be retested after it came down from the mid forties and it never got near it,so I gave up on it.Maybe later 🙂 4670/4650 seems likely at the moment though.Heres to a good afternoon.
Third time lucky to break 58 for the FTSE?
Autochartist have just popped up on IG with a short looking for 6252.9…..
What support do you see at 50 Nick, cos now we’re below friday low I don’t see much till 20?
Weekly pivot, and also the 200ema on the 30min here. Also the 20 Hull MA on the 2 hour
OK ta
Just that I saw that 12.52 candle as a good short @56, after breaking through 58 it came back to bang its head, failed to regain and staggered off back down.
Very oversold again here at 36 so taken 20 but it looks rubbish till 20 for me.
-5 for me on 50 bounce!
That’s one of my favourite scalping moves btw.
Break a recognised specific resistance, up or down, and invariably the break will get overdone rsi wise and bounce back to the original break level and odds on turn back and resume, giving a good R/R entry with a stop above the pre break trading range, in that case 12 pts.
Mind you, probably find they don’t count for anything and I should have held that 6400 short till tonight!
I think we have time for another dig at the lows before the DOW so short again at 46, 6 pt stop, no heroics.
Not really doing it for me again, taking a handful and waiting for the DOW.
Off for a walk.
Good buy signal that one 😉
Where do you see a buy signal?
That’s my patience gone – out 40 from 33 dax. 1 hour 10 minutes wasted. All I did is won back the previous loss.
I feel US will great us with a collapse first.
OMG, Dow looks really weak (haven’t seen the chart until now)
Yes, if it gets under 17100 convincingly, I reckon there’s another 150 on the downside.
They seem to be on their customary early run up, probably won’t be happy till 17200+.
Weathering the storm for the mo here with the short, difficult one to stop, probably 84 which is a bit wide.
Ho hum.
Does it mean that 6350 is officially broken?
Very good question Jack, let’s hope so, short at 60
Well easy enough tp place the stop now, 64, but trying very hard to restrain myself from doubling up the short for some closing weakness for a change.
A 190 DOW fail on this rally would be a perfect set up for us to crash 35…
I cannot get out of a bearish frame of mind, I think I’ll try hypnotherapy or something. ;(
Doesn’t look like downside fireworks, DOW seems quite really, so out for +15 and searching Yellow Pages under “H”….
*quiet*
It’s holding well. I expect it will follow the other indecies up after the close
Also shorted dow, but a bit early, plus lost 20 quid before that, now recovered to less than 10 points from today’s start. Wasn’t that lucky with dow today, didn’t figure out where it’s going. I think I started shorting 155 where I lost 20, but then shorted 65 and 85, like I said, recovered.
I’m finished for today to avoid acting irrationally.
LOL You and me both Jack 🙂
I shouldn’t worry too much about the Chinese slowdown — the market probably overreacted in the first place and they’ll maintain growth by running our strategic industries. They might even help with steel, just think!
By now, bears will have forgotten their August bonanza, yearning for a new plunge. Things are slightly peaky right now, but I shouldn’t worry unless the Dow falls below ≈16500 — the tramlines are headed North. 😀
Right click on link [Open in new window] —
http://td.md.it-finance.com/ProRealTime/display_chartimage.phtml?name=lbip3idxd489ohw5o6wq163em&type=png&purpose=file