Support 6400 6394 6377 6367 Resistance 6437 6494 6505 6510

Good morning. Those 2 longs worked out quite well yesterday despite it being a bearish day overall. The Fed minutes came out at 7pm and alluded to no rush to raise the rates unless the were more confident inflation was moving towards their goal. China worries persist with another bearish day there, with global growth concerns still weighing heavily on the markets. There was a quick sell off just before the bell on the FTSE yesterday, sometimes indicative of a last rush for the exit before the bulls reenter. Having now hit the 6400 area it will be interesting to see what plays out today and if this area holds at all (6400/6367)

US & Asia Overnight from Bloomberg
Asian stocks fell for a fifth day after Federal Reserve minutes showed U.S. officials sought more progress on inflation and investors watched China as concerns heighted over the nation’s slowdown.

The MSCI Asia-Pacific Index slid 0.1 percent to 135.87 as of 9:05 a.m. While the Fed’s minutes quelled speculation the central bank will raise rates at its next gathering, China’s shock currency devaluation continued to roil emerging-market assets, with concern China’s slowdown will limit global growth fueling a rout in commodities. Gold and silver gained on haven demand while oil and copper extended losses.

“While the Fed is looking less likely to move in September, everybody is really worried that China is slowing down faster than what official figures are telling you,” Evan Lucas, a strategist at IG Ltd. in Melbourne, said by phone. “That’s putting pressure on industrial metals and emerging markets.”

Japan’s Topix index slid 0.5 percent. South Korea’s Kospi index fell 0.4 percent. Australia’s S&P/ASX 200 Index dropped 0.6 percent. New Zealand’s NZX 50 Index was little changed. Markets in China and Hong Kong have yet to open.

Chinese stocks fell this week after the securities regulator said late Friday the state agency tasked with supporting share prices will reduce buying as volatility falls. China’s richest traders are cashing out of stocks, while a record drop in yuan positions at the central bank and financial institutions last month signaled investors are moving money out of the country.

Signs of Support
The Shanghai Composite Index gained 1.2 percent on Wednesday, erasing losses of as much as 5.1 percent, with signs of state support appearing as the gauge rallied 6.6 percent intraday after falling to as low as 3,558.38.

Futures on the Standard & Poor’s 500 Index added 0.1 percent. The underlying measure fell 0.8 percent on Wednesday.

Concerns about global growth are increasing as the Fed considers the timing of its first interest-rate increase since 2006. Odds on a September hike were further reduced Wednesday after Fed officials said while conditions for an increase were approaching, they needed more confidence inflation was shifting toward their goal.

The Fed meeting occurred before China’s devaluation on Aug. 11, a move that had already prompted some investors to scale back bets on a September increase. Those odds were reduced after the Fed minutes, with traders pricing in a 36 percent probability of an increase next month, down from more than 50 percent earlier in August. [Ref]

FTSE Outlook

FTSE 100 Prediction
FTSE 100 Prediction

I have plotted the arrows off that 30min channel and the daily support from the 3 Bianca channels for a bounce today. Certainly feels a bit of a left field prediction when all you can see is bearishness (which is usually the best time to do the opposite!). If the 6375 support area does break though then I think there is all likely hood we reach the bottom of the Raffs again, at 6330 and 6310 for today. So short a break if todays long plan doesn’t work out. If the 6375 area does hold then a rise towards the daily pivot at 6437, and possibly the top of the 30min channel at the 6490 area, where we also have the 200ema might occur. Seems wildly optimistic but that 30min channel worked well yesterday and there is good daily support around here. I think the Chinese will step in with some more stimulus before too long.

159 Comments

  1. Morning everyone, 4hr signaling a trip to 10800 on dax and circa 6500 on ftse
    expecting sideways action intraday.
    longs placed dax 97 and ftse 70

    1. Morning, yeah, I’m working cautiously from the long side today too, everything’s oversold, but we must be looking at different 4 hour charts because I’m damned if I see 6500, unless you’re looking at fib rt’s, which can tell you anything you want.

      What are these signals which “will take time to realise”? Not being arsey, genuine question.

  5. Higher lows on rsi and Macd and lower lows on price signalling reversal or approaching reversal.
    unfortunately countertrend trades but has huge profit potential.
    Will try and post a chart later today.
    does anyone know how I take a snapshot of charts on ig mobile?

    1. Higher lows on rsi….ok, we’re definitely looking at different charts.
      The only thing remotely bullish about rsi readings atm, imo, is the fact that if they go any lower they fall off the bottom of the page.
      Sounds like you’re dressing up reversion to mean trading in technical clothes, in simple terms, buying because it’s “cheap”.
      Good luck honestly, but falling knives can cut your fingers off.

      1. Snapshot Icarus – iPhones to take a snap shot – hold down the power button and press the home button.
        The screen shot will be in your camera roll…

  6. This combined with divergence signal on 30 min shows potential intraday reversal to around 700

  7. Nick, do you know why I keep getting logged out from the site every 10-15 mins. Is it some kind of setting on the website?

    1. Yeah lol, only trading 30 below its lowest close for seven months.
      🙂
      Holding a nervous long at 66 atm, with a 15 pt stop.
      I want to buy more for an oversold upturn, but every time it pulls back, I just see a bottomless pit…
      Target 1 hour 10 rsi 45, which is probably around 400. Later today if the Yanks play ball.

        2. What I didnt want to miss – I missed. Took profits blindly. Excuses on my part but stupidity is the biggest reason!

        1. Lol, “strong buy signal”…..where have I heard that before? 🙂
          There will be some bargains around after these large falls but they should be treated as imminent dead cats on their ninth lives, not some New Bull Dawn.

    1. It’ll go as far as it goes (cop out).
      You can paint rosy scenarios about 6500 6600 whatever because it’s oversold now, no question, but take your money and run on the long side.
      There is no other technical approach that I can see.

      Also, with all due respect to the forum and its visitors, when little retail traders like us are queuing up to buy, it’s not good.

      1. Re: upside targets, Joshua Mahoney is a new TA at IG and he knows his stuff, although he’s a bit young and naive.

        He’s looking at 6384, 6410 and then big 6429 resistance.
        Can’t really argue with that.

    1. LOL, ok, I think I must be in a parallel universe today, all these uptrends, positive reversals, divergencies and whatever….
      All my charts look the same: the price starts in the top left hand corner and ends in the bottom right hand corner.

      By all means bargain hunt, but don’t dress it up as something else.

      Meanwhile, back at the simulation of the FTSE they are running specially for me, we have now had three goes at 90 which have failed, a minor uptrend says 72ish might be a good buy.

  12. Hi tmfp,
    I’m of the same opinion as yourself, I think this is so over sold it needs some rest and as you said earlier “if they went any lower the indicators would fall off the bottom of the page”, although there is a good chance of 6500 over time the bull, but its going to be a push because from what I can see the Bull has left the farm, btw sitting with a 6375 short here and will prob hedge if it closes above 6425

  13. Hi TMPF, its been a long time. Just wondering how are you trading today? I don’t see rsi hitting under 20 at any point this morning on the rsi 10.

    1. Hi milka, how you doing?
      No, it’s been pretty quiet for rsi signals today, the triple top confirm @ 85/90 had good divergence +80 reading, otherwise I’m just doing what everyone else is, buying because it seems cheap. (Those rsi trading parameters that I’ve mentioned are not set in stone, just a day to day default.)

      1. Without sounding like an idiot (well sounding like one) what exactly is a triple top confirm and divergence reading at 80. I sort of get double tops but I have recently realised I’ve been misunderstanding terminology for sometime!

        1. Triple top is a double top with another bit added on.
          Divergence, look at the 1 min chart, 10.48 high 89.5, rsi 80.1, then pullback and second attempt 10.56, same high but lower rsi 73.9, ideally with higher high for true divergence but the reversed hammer candles made up for that.
          Cheap bet to short the second attempt/fail with a very close stop at the confirming 10.58 70.3 candle.

  14. tmfp
    traded my strong buy signal 6370 to 6372
    good signal made 2 great points
    what do you think, great trade wasn’t it
    i’ll give you my next strong buy signal

      1. hope you know you are walking on very thin ice!!!!!!
        you might have to spend the rest of your time there..

        1. Actually, just booked flights for a month at Christmas.
          Agonda beach, Google it, been going off and on for 12 years.

  15. tmfp
    but seriously what happened to the biggest bear on this forum.
    dont tell me you have been influenced by …..
    nah……. cant beleive that

    1. 🙂
      Actually, I’m still smarting a bit from taking my big short out too early, but it was an interesting and profitable experience that I have no desire to repeat for a while.
      Should have shorted at 86 when I closed my long, would have done 99/100, but obviously influenced by the all pervading bull sentiment today.

  16. tmfp
    know it very well
    spend every year there as well, but further north at fort aguda, at the taj
    i like calangute – but hire a royal endfield while there

    1. LOL @ the Taj, I stay in one of those garden sheds on stilts on the beach.
      Enfield is a must, agree.

    1. Yes Benaulim beach was my favourite for a long time, but started getting a bit commercial, so I go south now, ride up into the Ghat mountains and down to Karnataka when I get bored with the beach.

    2. double bottom on dax, Icarus? Did you close out the dax long at 97?

      Thanks a bunch tmpf for the above esp on divergence. Going to get my head around it, and may (emphasis on may) ask you a few qs later.

  18. never been there icarus
    tmfp – you been to coorg – mercara also mysore
    tried halebid – fantastic

    1. No, that’s quite a long way on an Enfield 🙂
      I usually end up around Jog Falls and the nature reserve, sitting up trees spotting leopards (pun).

  19. Out off all trades, no real direction & too much stress but if I where to bet, I’d back the long team this afternoon

  20. wow! Coorg…excellent place, coffee plantations and stuff.

    I used to visit goa every year but haven’t been there for a while.
    have you ever been to mangalore

    1. yes been there – 3 years ago – we rode from karwar to mangalore and back via coorg mysore. great palace at mysore. also at murudeswar huge temple
      so a small world then.

  21. Closed all dax longs. +50
    Hitting some resistance. Will buy again. Targets stay unless Dow spoils the party. Holding ftse

  22. paul, tmfp, just because you were acting snobbish earlier – here’s a spanking for you and I hope you continue to hold shorts

  23. Milka, if this rally has legs it will get to 890 Or until you see weakness in the daily or 4hr

    1. I closed out a 597 at 606, after giving letting it slide 2 bounces to 540! kicking myself. I missed the 570 bounce, and entered again at 591

  24. icarus
    i leave all the snobbery to tmfp
    i’m just a simple guy who likes to trade against the crowd

  26. Yes, DAX is looking quite strong comparatively, just bouncing off 11am highs, a bit overbought, we’re still 16 points away from ours.
    Important that 67 holds for us, otherwise 78 confirms as a 61.8 deceased feline.

          3. as you can see I did, was quite overbought and there’s that resistance around 10. Being a little bit careful though, DOW’s a bit of a wild card today.

  32. Dax closed 650
    Hitting resistance
    prices need cooled off

    Will buy lower

    All in all nearly +150 today:-)

  49. A Consolidation Day, to be kind.

    Wonder if we’ll see 16000’s on DOW and four figures on DAX before the bounce?

    1. I remember watching BBTV through gritted teeth and seeing the guys on the floor wearing 18,000 caps! Quite easy to make a 6 out of an 8 now!

      1. We could do one of those teaser guerilla marketing campaigns….
        The Bounce is coming…!
        Don’t miss the Bounce…..
        Get a bit of Bounce in your life….!

        🙂

  51. Closed long no 3 again at 50. Will it break 50?

    If it doesn’t break 50 in the next 30 mins I am closing the original long

    I saw the gap on IG tmfp, 1 min chart

  52. It’s all gone a bid mad recently. The bounce will no doubt appear out of the blue. Maybe more Chinese stimulus tonight will kick it off.

  53. Or maybe the Yanks will come back in the market this evening anticipating the Central bank of China will act.

    1. 100 looks like one of those suspiciously round numbers to hold, but also a bit of a magnet to attack.
      GL.

  57. Hey BB, re-arrange these words in a well known phrase or saying –
    straws at grasping you 😉

    The Chinese situation is in two parts: There’s the crashing stock market which is only a big deal to a relatively small number of Chinese investors and I think, has been overblown in importance.
    The thing that is more important imo, is the basic fact that the world is importing less Chinese crap quarter by quarter. This has one meaning only, effectively a global recession: despite all the CB stimulii, world trade is decreasing. While that is the case, equity markets will fall: developing markets have tanked already, now the first world is getting it.

    1. Don’t disagree. However I am talking about today and tomorrow not next month or year

  58. tmfp
    yes agree with you once more
    but for slightly different reasons
    1. chinese stock market is actually very small – smaller than belgium as not stocks are listed
    2. how many TV’s cameras, smartphones can one have. novelty factor has worn thin . infact even in china smartphones are on a decline as saturation point has come
    3 with growth only coming from the lower income esp in developing countries – what are they going to buy a samsung edge smartphone for £600 or a £10 microsoft offering
    4 as you said pay back time for all that £ $ E – who is going to pay it back ?
    5 walmart – dismall sales, oil co’s dismal ,
    —-
    I think the only guy who is going to save the world is Trump , is the world this desperate!
    where has sanity gone
    I’m off to Goa

    1. Even I shorted the revisit to 100 for a quick 25, and I don’t even trade the DOW.
      Don’t get married to this shit.

  60. I take your point tmfp. I too like a quick dip into the market and out of it.
    so far its not working, but still holding due to technicals, close to key support and the fact that it hasn’t so far eaten into my profits made earlier today much

    1. Aaaargh, half of mine just vanished. 🙁
      I’ve got 25 points in the bank on the DOW tonight, so stop at 17120 on this leaves me about b/e overall.
      Limit 16999 or close on the bell.

  65. Well, finally out at 90. Pear it is for dinner 🙂
    Not mortified, as haven’t lost. Luckily closed the second long for +6 when there was a brief bounce.
    ended the day in in profits so okay.

  66. This has happened to me once before. I closed the positions as I usually don’t like keeping positions open overnight and the next day it just rocketed up.

  71. Although I think we could easily be at 6320+ by the morning, I’m out of that 295 for +12.
    I wonder how many people trading now have seen a raging bear market?
    It’s f*cking frightening, even if you’re not long.
    🙂

    1. Tmfp, hope you won’t mind sharing…genuine question 🙂
      I usually use overbought stochastic and an overbought rsi on the hourly to get back into trend. For example, now I would be running shorts using that. By I don’t get many entries.

      Can I ask what you look for to enter in the direction of trend and how you decide it is potentially not going in the direction you intended it to?

      1. I use mainly rsi/stoch extreme readings to get a good entry trade. I watch 1min through to daily.
        Almost by definition I trade counter trend, but at the same time have a longer term view which will affect my readiness to hold for development or take a quick profit.
        This means I rarely enter in trend direction, but like tonight with 17100, I’ll happily trade an important level break.
        I stuck around tonight and traded the DOW for the first time in a couple of years because I sensed something was going to happen. Yes, sensed, as in not explainable.
        Every trade I open with a stop which I rarely move, and never a risk/reward of less than 1:1.

        1. Effectively counter short term trend but in the direction of the long term trend isn’t it? What readings on the rsi and stochastic do you use for oversold or overbought?

          My biggest problem is i enter the market sometimes without thinking much, worrying that it will all get over in the next minute. Result – bad entries and usually these are at the top on he 1 min chart

          1. Default 20/80 on 10 p RSI get me interested. Hugh’s system with triple period confirm is good.
            A good entry near or at the immediate high/low is all you can ask for, trading craft then takes over and you either develop or close the position as per prevailing conditions.
            I treat stops as the potential price of that trade, not as something shameful that implies failure.
            There’s always another trade.

  73. The difference today is that more people can go short and you don’t need your broker to pick up the phone

    1. Yeah, but people don’t go short. As I said earlier, how many traders are there with experience pre 2009?
      Levels of complacency are still high, Motley Fool just this morning “Everything’s fine, buy the pullback”.
      It’s only retail and buybacks on the long side now, industry is just holding bonds and $$, screw equities, Yellen’s even trying her best to pay them interest for doing it.

  75. Tks tmfp, its good to have you on this board, I was here last year when I lost all and so I went away and tried to learn as much as poss, I’m much calmer now, RC was good when he was hear aswell, but I’d say he is making too much money now to bother with us, its a pity he was very good, anyway good night all.

    1. Evening Jack, hope you’re good.
      Nick makes a rod for his own back with those arrows, but his text was pretty accurate
      “If the 6375 support area does break though then I think there is all likely hood we reach the bottom of the Raffs again, at 6330 and 6310 for today”.

        1. Please carry on with arrows, it’s interesting to see your idea. I think they help a lot for new traders. Plus add to it the joy when they match the direction!
          I will read more carefully next time for remarks (just back from holidays 🙂 )

  77. tmFP, what was 17100 in terms of important level. I don’t find any supports at that figures on the daily or 4 hour charts.

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