Support 6559 6535 6473 6451 Resistance 6593 6613 6628 6632 6646

Good morning. My bullish sentiment was a bit early yesterday as we ended up with another dip and rise day, thanks to the US pulling things up in the afternoon, despite slightly weaker than expected manufacturing data in the NY region. The bears were not able to break 6500 in the end and overnight prices have held up well. “U.S. data were a little softer than people had hoped and that suggests there is increasing nervousness on whether the U.S. is strong enough to pull the global economy,” said John Haynes, head of research at Investec Wealth & Investment. “We’re going to get fluctuations, but the U.S. will come through the current less-wonderful patch pretty well.” “Investors are going to look at Wednesday minutes of the most recent Fed meeting to see how they’re going to react to the recent yuan devaluation and further decline in oil prices,” said Patrick Spencer, equities vice chairman at Robert W. Baird & Co. in London.

US & Asia Overnight from Bloomberg
Most Asian stocks advanced, with the regional benchmark index holding near a seven-month low, following gains in U.S. equities as strong homebuilder data added to signs the world’s biggest economy is improving.

The MSCI Asia-Pacific Index fell 0.1 percent to 137.73 as of 9:05 a.m. in Tokyo with about three stocks gaining for every two that fell. The Standard & Poor’s 500 climbed climbed 0.5 percent on Monday, reversing earlier losses, after confidence among U.S. homebuilders jumped to the highest level in almost a decade.

“There is a gradual strengthening in the U.S. housing market with positive implications for employment and economic growth if sustained,” Matthew Sherwood, head of investment strategy at Perpetual Ltd. in Sydney, which manages about $22 billion, said by e-mail. “While the market reaction to the yuan’s depreciation last week was completely overdone, it will be equally unproductive for investors to believe that the currency’s depreciation will reduce China’s macro risk.”

Japan’s Topix index was little changed, swinging between gains and losses. South Korea’s Kospi index rose 0.5 percent. Australia’s S&P/ASX 200 Index slid 0.2 percent. New Zealand’s NZX 50 Index rose 0.1 percent. Markets in China and Hong Kong have yet to open.

The Hang Seng China Enterprises Index of mainland stocks traded in Hong Kong slipped 0.9 percent to an eight-month low on Monday as foreigners pulled funds amid concern the outlook for the yuan and economic growth have weakened.

Selling China
Net outflows from Chinese and Hong Kong equities reached $531 million in the week to Aug. 12, the ninth week of selling in the past 10, China International Capital Corp. said.

China may reduce the reserve requirement ratio at banks, the China Securities Journal reported, citing unidentified analysts.

Futures on the Standard & Poor’s 500 Index gained less than 0.1 percent. The underlying measure advanced on Monday as investors await further clues from the Federal Reserve on the path for interest rates.

The Fed releases minutes from its July meeting on Wednesday. Traders see a 46 percent chance of a September rate increase, according to futures trading data compiled by Bloomberg. [Ref]

FTSE Outlook

FTSE 100 Prediction
FTSE 100 Prediction

Most Asian stocks advanced which has support the FTSE overnight. The daily pivot is 6559 so support there initially. If we have another weak day then a dip down to the 6473 area where we have the bottom of the 20 day Bianca looks likely. If the pivot holds (and I’ve gone for this scenario with the arrows) then we could be on for 6600 today (6613 is the top of the 10 day Bianca too). Might just repeat the pattern we have had every day with the morning weakness, then brought back up by the US in the afternoon. Still don’t think they will be raising rates in September myself but we shall see. At the time of writing the 30min EMAs are bullish, though the 10 min has juts gone bearish, so we should get a dip initially, down to the pivot area or just below. August is always a funny month, this one being no exception!

114 Comments

  3. Hanging in there by skin of my teeth on the DAX, stop at 880. For a little profit. I think your right Icarus looking like a down day again

  9. Morning All,
    Not surprisingly – everything I’m looking at is …pointing lower perhaps… 6505 – yesterdays’ Low.
    Not surprising really – August sells off – and sometimes forms a base Aug – September.
    Gone Long Here – Stop 6500. Initial Target 6529 ..

        1. If we do Trip 6529 – I’m pondering another Long T1 6542 – T2 6554 – T3 6567 – Stop 6517 – This is a new idea I’m considering 3:1 Trades although it’s taking 1 off as each target is met.

        2. Your 1 min trend break signals are a little over sensitive I’ve noticed recently.
          Can you contextualise them somehow?

          1. Here we are 6505 –
            Struggling with the idea of going Short – in this area!
            Obviously going Short at 6529 would be better (50 EMA / 5Mins) as you suggest tmpf, but that’s not available.
            **
            Looking at the 1 hr chart same format (50 EMA) return to 6562.
            Price is perfectly positioned for a return to 6562.
            http://s44.photobucket.com/albums/f25/FTSEDAYTRADER/?action=view&current=1439893895_zpsf18a54f8.png
            Right Click – Open in new tab
            **
            I’m drawing a blank …

  12. Another dead cat out of the way, just missed my short waiting at 50% ie 38. 🙁
    Looking very brittle, got to expect 6400’s at some point today.
    6510 might hold this time, but not the next.

      1. I’m struggling to make sense of any of them at the mo Argyle. The DOW with the minutes coming tmrw should be pretty dull this pm.
        Technically, they’ve got to make a higher high, 17630+ to give the bulls something to run with.
        A stab at that level tmrw, a fail and more downside?

      1. Anytime the 1 min 10 RSI gets near 60 and there’s a bit of context, I’ve been shorting. i.e. @20 (~50% dead cat) and 12 just recently (revisit to broken support area), but stopped that for the mo until new lows.
        Covered half at 06 for the hold, stop on balance at 16, higher high.
        2 min downtrend now broken so I expect it to try to consolidate off 6505, so will square up on a dip and maybe long with v close stop.

          1. I dunno so much mate, a sell off the day before the minutes would be a bit of almost sacrilege these days.
            We just broke prev mini high @13, so I be adding to my long, could be some noon upside coming.
            Target 25 then 35, buying pullbacks with tight stop.

          5. Nice one custard, I should have shorted it too, would have been happy with a pullback to around 15/18, don’t think the bull side is quite dead yet.

  18. Here we are 6505 –
    Struggling with the idea of going Short – in this area!
    Obviously going Short at 6529 would be better (50 EMA / 5Mins) as you suggest tmpf, but that’s not available.
    **
    Looking at the 1 hr chart same format (50 EMA) return to 6562.
    Price is perfectly positioned for a return to 6562.
    http://s44.photobucket.com/albums/f25/FTSEDAYTRADER/?action=view&current=1439893895_zpsf18a54f8.png
    Right Click – Open in new tab
    **
    I’m drawing a blank …

  19. Argyle, can you elaborate on your last comment of buy signals over all indicies? What do you class as a buy signal?

      1. Dead cats are always hard to spot without some sort of fib analysis, that’s what I meant about contextualisation.
        Mixed signals = do nothing, there’s always another trade.

  22. Lol, I mean what told you the indicies were about to rise? Levels, indicators what are you monitoring. I know this will be a complicated answer but just wondered what you prefer to use to analyse the markets.

  23. He has a wheel with a pointer. He spins it and it says long or short. He has a 50% success rate.

  24. Tmpf – You doing any trades ?
    Always the same at the moment – quiet.
    RSI 6 on the one min I think is the best option…
    L 6518 (Saxo not IG)

    2. Yeah scroll up, I got on this rally at 07 and 14 and out near the high, back in long at 19 atm, 15 stop, don’t really fancy it but you’ve got to show willing, haven’t you?

        1. Not at all, it’s quite pleasant day trading without having any particularly strong view or large position.

          If we don’t get through 27 in the next few minutes I think this long can go.

  27. 6400s on the cards. Opportunity to go long at 6480 ish if it gets that low. Dow 17325 on cards.

  29. How positive is this housing data?
    It’s obvously not mind blowing but it’s not negative which is a good sign but it could be less positive than expected?

    Does anybody have any views?

  31. Hi RJ, yes I am. Nearly bottled it this morning with those dips and rising but held. Gonna stick to the plan. You?

    1. Good, I was hoping you did. I also added another position at 920 before the dip, looking to add more at the break of 980.

  32. I’ve just checked the 1pm candle and the lowest was 81.5 on IG. Missed my stop by 1.5 points. Am so glad I didn’t get stopped.

  33. Well, against all odds, no 6400’s yet. If we can get above 34 ish then a reverse head and shoulders, with a nice neat neckline, is there for all to see, next stop 6560.

    These rate rises.
    FOMC is supposed to want September, maybe a bit later, and BoE maybe early next year. No matter how they change the indicators, even without Chinese de facto devaluation, the West is deflating.
    So, what happens when the Fed bite the bullet and admit there’s no need to raise rates this year and, anyway, the economy couldn’t take it.
    Bullish (QE4) or bearish (reality)?

    1. it seems to be all unravelling.
      7 years of stimulus, how can they remove it without cold turkey
      and thats a painful negative move
      agree with you whatever fomc does or does not do, the rumblestrip
      effect is going to cause a real shake

    2. It will be Bullish..
      No country wants to raise interest rates.
      Really the US is a little out of step with other countries hence the difficulty.
      **
      I’m actually having quite a good day !

      1. I suppose it all depends on where the surprise lies.
        Would it be a surprise that they don’t raise ?
        or
        Would it be a surprise that they do ?
        Not sure where I’d sit …(or lie).. with either

  34. Just bounced well off our uptrend which started at 13.18.
    If that doesn’t break beforehand, it should be penant decision time for 6532 by 16.00.
    Strong close, anyone?

      2. Yes, that 20 line held well and gave enough bounce to get through 34, but not exactly a stellar performance since.

  35. looks like everything is building to a breakout at 6532
    good for 25 points atleast
    tmfp & hugh your take

    1. Was seeing the same till the uptrend went, neutral/bull now, but breaking 34 will be that much harder. DOW ran out of puff too.

  36. L 6532
    All my charts are showing positive – so have to follow these…
    6552 maybe a good target
    6567 PRT Line

    1. Could have improved on my entry 50 ema would be good @24 .
      B. hope this is right – don’t want to undo all my other sterling trades…

          1. Custard are you Short or Long ?? Can’t remember ..
            Bit cheesed off I’ve been stopped – my charts are still positive.. !
            Yes …know what you’re thinking….
            Afternoons are busy for me so limited amount of time..

  37. Hi guys,

    I just got a message from somebody I follow and he said we could see a bit of selling this afternoon in the US, just thought I’d put it out there,

    1. Shows how crap it really is, we’re getting all excited about a 10 point upside break out.
      The fact that we make new lows virtually daily………….

  42. tmfp
    you still doing that 4.30 ftse price challenge still
    or have the number of participants dwindled

  55. Crikey 3 times down within 5 points of my stop and then back up. Come on the DAX, GET UP. ……….

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