Good morning. Not too bad yesterday with some longs that actually worked out, though the bulls field to break the 6630 area. But the bears couldn’t break 6550 either. After the volatile start to the week everyone was just catching their breath probably! Now the yuan devaluation has passed, there is a chance for the bulls, though they might be a little cautious in light of possible rate rises next month. Certainly going to be interesting to see if rates are increased in September in the US.
US & Asia Overnight from Bloomberg
Asian stocks fluctuated, with the regional benchmark index headed for a fourth weekly decline, as investors weighed an increase in China’s yuan reference rate and a slide in energy shares on a drop in oil.
The MSCI Asia Pacific Index fell less than 0.1 percent to 138.35 as of 10:14 a.m. in Hong Kong after rising as much as 0.2 percent. The gauge is heading for a 1.9 percent retreat this week. The People’s Bank of China’s fixing strengthened after slides of at least 1.1 percent in each of the last three days. U.S. retail sales added to signs the world’s largest economy is strengthening, and raised expectations the Federal Reserve may raise rates next month.
“As yuan concerns dissipate, there’s probably room for a short-term rebound in the markets,” Nader Naeimi, Sydney-based head of dynamic asset allocation at AMP Capital Investors Ltd., which oversees about $118 billion said by phone. “It’s hard to imagine sustainable gains given the prospects of the Fed raising rates next month.”
Chinese equities climbed after the fixing, while the freely traded offshore yuan advanced 0.6 percent, trimming its weekly loss to 3.5 percent. The onshore spot rate was little changed at 6.3993 per dollar.
The Shanghai Composite Index rose 0.7 percent. The Hang Seng China Enterprises Index of mainland stocks traded in Hong Kong advanced 0.2 percent, as did the city’s benchmark Hang Seng Index.
Energy shares led losses among the 10 industry groups on the regional benchmark index. Crude headed for a seventh weekly drop, the longest run of declines since January, amid signs the global glut that’s driven prices to the lowest in six years will be prolonged.
Japan’s Topix index was little changed, heading for its first weekly decline in three weeks. Singapore’s Straits Times Index climbed 0.7 percent. Australia’s S&P/ASX 200 Index was little changed. New Zealand’s NZX 50 Index rose 0.3 percent. Taiwan’s Taiex index fell less than 0.1 percent.
Futures on the Standard & Poor’s 500 Index were little changed. The underlying index slipped 0.1 percent on Thursday. [Ref]
FTSE Outlook
Pivot is initial resistance today at 6583 and it will be interesting to see if there are any bears waiting there – above this then I expect the top of that 30min channel to be tested, with resistance at 6600. Support from that channel is 6530, though yesterdays low at 6550 is likely to offer some support, at least initially. The 10min moving averages are pointing to an initial rise, whilst the 30mins are bearish still, having stayed that way since 2pm yesterday, with the bulls failing to break 6630. Usual Friday weirdness expected today really after a volatile week, so might just rocket up to 6600 from the off! The daily chart has support around 6540 and the bottom of the Bianca 10 day at 6517 might give the bulls a bit of support if the bears manage to drop it that low. Its all been fairly news driven this week with the Chinese yuan devaluation (twice!) so bulls might be a little hesitant at the moment. They could probably do with some help so I am looking for the news flow to turn bit more positive shortly – usually get a run of 2 weeks bearish news, then the first positive ones start coming through. There is a bit of US news out at 3pm so will be watching that with interest. Delaying US rate rises would certainly help push the US indices up. I am still feeling a little bit more bullish than bearish – the bears had the perfect scenario early this week to drive it down to 6400 or lower, and the FTSE has actually remained fairly resilient. I have plotted the arrows to 6530, but we might only get down to 6550 on any dips.
Perfect Nick!! Happy that my plan for the day matches what you showed in your picture. Hopefully I am getting better at this trading game.
just out of curiosity did you get Tesco shares? I have a buy signal so got them out of market today.
I bought Tesco a while back at 160
good trade! near enough the all time low. I was thinking about jumping in then but bad news from tesco was being released nearly everyday.
Morning.
Taken out nearly all of my shorts this morning after burning a bit of midnight oil.
Still bearish, but veering away from the immediate meltdown viewpoint, as the FTSE especially has held quite well this week, all things considered.
Off out for the day today too which was an influence.
Any sustained rise has got to break 6640 and I see today/Monday giving that a try again, with the help of a bit of book squaring and lack of bad news.
Enjoy
🙂
Good call tmfp. Bottom formation should be underway
Long on the Dax 915 – stop at 870
Good call RJ. If this is the bottom you can ride this up to 11600 over the next week.
Hi Argyle,
Thanks, that is my plan. lets see how this turns out. I was thinking it might get to 890 before reversing but took it at 915 that is why I have left a stop at 870
argyle
do you reackon that it can go above 11600 to the all time highs?
that would make it a good trade
Argyle, are you expecting retest of lows and potentially exceed by a few points?
The pull back from mid morning on the Dax will be the bottom. Will drift upwards now.
Long on FTSE 555 hoping for 6600
what is your stop on this
30
dax 11800 imo before bears start all over again
Thanks Argyle, a little bit of low volume rally and the big boys would offload some of their stock Don’t you think?
Contemplated opening a small position but prices too expensive atm. Need lower prices before I buy so will stand aside until I am comfortable with higher price or we retest lows.
alternatively will short highs
cant understand why everybody has become so positive about the market
it looks like a one way bet down
tmfp must be cursing for removing or closing his shorts
looks like we are going to get to 6400 as he had predicted
stops at b/e for Dax, if it pushes higher after Dow open will try to add monitoring 11030, 11070, 11150 if it gets there.
I have taken 1/3 of my position at 11012 – it is for my instant gratification monkey inside me. I would really like to run this and resist my temptation of closing it prematurely.
its hit fib resistance, so well done
whats making you hold on to your 2/3 makes no sence
Afternoon chaps, not much happening by the look if it.
That dip to under 550 got bought quite well didn’t it? Maybe it was pessimism about how the DOW would open. Will be interesting to see if the bounce sticks.
Hey Paul H, to be honest, I’m still as bearish as ever but running this short has absolutely exhausted me: I was looking at running it over the weekend or taking 5 figure profits. It was a no brainer.
I do think they will try to make a rally stick over the next few days, probably starting with a run up in the next couple of hours.
I want to see how far they get and then they can have it all back and more, probably low/mid 600’s.
But for the moment, just gone long at 55, 12 either way
Nah, not working, out.
Have a good weekend all.
good weekend mate 🙂
icarrus
what makes you say 11800
whats your logic on this
i am short dax from 11950, 900, 850 , 800 right till 500 every 50
looking to see 10700 to take profits
Do you mean to say that you are holding your position from 11950 till it went to 10700 and came back up to 11800 ??
Paul, the simple logic is markets don’t move in a straight line. Expect a snap back rally soon. Atm I don’t see 10700 but what do I know!
just hate it when somebody completes their views with ” what do i know”
well – why risk your money then
Risking money is different than gambling. I enter a trade to make money not to take a side. Break of 11000 means a drop to 10500 not 10700. Having had a look at my charts after close i can now tell you what I see, I see 11500 before 10700 on dax. If 600 breaks, 12500
Wish you all the best
tmfp
tell me about it
running any multiple position trade is exhausting
looking at the gyrations of p&l
but if you beleive & backed with fundamental & tech analysis
then as you said the 5 figure profit is the only incentive
most of my trades have been holding for 3 weeks thought
smaller £<1 as tester trades for over 4 months
Sorry Paul no offence or pun intended. I see the weekly chart and I see 11900.so that target is not something I am expecting overnight.
When I see the daily I see 10700 and 11250. Atm I really don’t know if I am bullish or bearish. If we get to 250 on dax first I will be bearish. If 10700 is hit first then I am a bull. Although I am inclined towards 250 as first target.
Short Dow 450
Stop at 51