Support 6578 6572 6544 6475 Resistance 6611 6614 6638 6655 6668

Good morning. I hope you had a good weekend. Fairly quiet on the news front over the weekend really, everyone waiting with baited breath to see if the Fed raise rates in September! However, German Chancellor Angela Merkel tried to reassure sceptical lawmakers on Sunday that the IMF would take part in a new bailout for Greece, before a parliamentary vote in which many of her conservatives may break ranks and reject the rescue. And Japanese GDP wasn’t as bad as feared. I’m expecting a bit of a rise towards 6650 early this week, where we have the top of the 10 day Raff and the 25ema on the daily. The FTSE has actually held up pretty well last week despite all the bearish moves, as has the S&P, bouncing back from that 2050 low. could actually be quite an interesting week ahead!

US & Asia Overnight from Bloomberg
Asian stocks rose, tracking an advance in U.S. equities, as Japanese shares gained after data showed the economy contracted less than expected.

The MSCI Asia-Pacific Index climbed 0.1 percent to 138.43 as of 9:01 a.m. in Tokyo after the measure sank 2 percent last week for a fourth weekly decline. The Topix index rose 0.3 percent as gross domestic product fell 1.6 percent on an annualized basis in the April-June quarter. Economists had been expecting a 1.8 percent drop. The People’s Bank of China raised the yuan’s reference rate Friday for the first time since devaluing it earlier in the week, arresting losses in the onshore-traded currency and fueling gains in the Hong Kong-traded yuan. The Standard & Poor’s 500 Index gained 0.4 percent.

“The situation surrounding the yuan has passed its peak and there’s a sense of calm,” said Hirotsugu Nagata, a member of the investment information department at Mizuho Securities Co. “The market’s attention now returns to the U.S. rate increase.”

China’s central bank soothed concern over the engineered depreciation Thursday, saying there’s no basis for persistent weakness in the yuan and that it will step in to curb large fluctuations. Asian currencies still capped their steepest weekly slide since 2011.

Korea’s Kospi index rose 0.2 percent on Monday. Australia’s S&P/ASX 200 Index gained 0.1 percent. New Zealand’s NZX 50 Index was up 0.3 percent. Markets in China and Hong Kong have yet to open.

Futures on Hong Kong’s Hang Seng Index added 0.1 percent in most recent trading. Contracts on the FTSE China A50 Index of the mainland’s largest companies slipped 0.2 percent after the Shanghai Composite Index rose 5.9 percent last week.

Futures on the S&P 500 rose less than 0.1 percent. The underlying measure capped a 0.7 percent weekly gain on Friday, recovering after China’s devaluation sent the measure lower. [Ref]

FTSE Outlook

FTSE 100 Prediction
FTSE 100 Prediction

Feeling a bit positive for today, and looking at the 10min chart there is a nice rising channel, the bottom of which we are currently tracking up. Resistance is around the 6628 area where we have the weekly pivot, then 6654 above that where there are some resistance levels on the daily. Generally looking at buying the dips today for a bit of bullishness. If the bears break 6673 though then a revisit to Fridays lows at 6643 looks possible. That area might well hold as support though, as we have a decent rising support going that low with Wednesdays low (higher lows if it does which is good for the bulls). If the bulls were to push on and manage to break the 6655 area then the top of the 10 day Bianca is 6668, then the 20 day at 6789.

97 Comments

    1. Yeah, I bought that dip to 60 quite expecting a stab a 600 and before I knew it was stopped at b/e and we were on our way to new lows.
      If the saying buy it when it looks at its worst is true, then a huge long is in order now, because it looks like absolute sh*t.

  4. Morning All,
    Went Long at 6552..Stopped out 6530.
    Contra Trend Trade –
    Duh !
    Rusty Monday morning trade .
    1 Min Chart Looks Better
    5 Min Will Turn Positive > 6542

          1. Yes DC – I’m running with the Supertrend at the moment 2/3 , 3/10 (6563.1 at the mo) & 6.6 / 10.

        3. Yes TMPF – I just didn’t have my wits about me !
          Bought at 6552 – went off to do something for a moment – Whack .
          When you were off relaxing on Friday ! – I had some good trades (about 10 trades) on Friday afternoon just doing lots of small trades 1 – 2 pointers. All Ordered – Limit trades – time consuming but quite good when the markets are just wandering around like they were. Ideal during a lazy market like it was on Friday afternoon.

          2. Oh – I see – (Short 53 Stop 56) – well maybe – only came up with that as the Supertrend (ST) had gone positive on 1 min and 5 min – 10 min had yet to turn positive at 6556 – hence, why I was thinking of switching at that level.
            Scientific hey ! I knew you’d be impressed !!

  8. Quick drop this morning. Long rise back to 6580 – 6600 during the day before dropping back just before close. Then long for a few days. 6650 target.

  11. Hi all,

    Do people think that the DAX will slowly trundle upwards towards 11600 as Argyle opined at the end of last week, or are we going to float around here for a bit?

    I’m long at 11,010, trying to work out if I should take my profit and run or hold for a bit longer.

    Cheers all

    1. Like the name !
      If you feel like running it I’d stick a Stop in at 10985
      Or if you want to keep a clean bill stick a Stop in at b/e.
      It’s a sound entry 11010 – well it it appears that way at the moment !

      1. Cheers mate

        I’m going to hold it and see, had a good week last week so I can afford a bit of a gamble on this one. Stop at 10975 (This is showing on my charts)

        Hopefully it’ll slowly trundle upwards all week and I can close out in the 500s somewhere.

        Cheers

    2. 11600 is a long long way away, more of an immediate concern for me would be where to put my stop, because I can’t see much between here and a test of the 10900 lows.
      Much as we all value Argyle’s flashes of insight, I think the DAX looks less bullish, or more bearish, than the FTSE: they broke the late July lows, we didn’t.

      1. Trending I was prepared for, falling off a cliff I was not.

        Ahh well, you win some you lose some, on to the next thing!

      2. Actually, if you ignore that book squaring DOW rally on Fri and the silly high opening here today based on that, the FTSE hasn’t really done much since closing at 16.30 on friday at 6550.
        Just about clinging to the previous lows ~ 30, but I don’t know for how long, could easily see sub 6500 this pm very quickly, depending on DOW, which has plenty of space on the downside.

  18. Closed (6518) my earlier S from 6552 recovering from my earlier mis-judgements.
    There’s a PRT Support Line at 6505 – S2 is 6507. (S3 6470)
    Also the CAM Short is 6518 – sometimes good trades to S3 (6470)

  19. LoL
    – I’m think I’m going to have to take the rest of the afternoon off… to stop laughing.

    1. Hey tmfp – Seen the head & shoulders (5 Min Chart) 13:30 (Shoulder) – 13:45 Head – Here we are – other shoulder – kneckline 6515..
      LoL

      1. That’s not a Head & Shoulders Hugh, that’s a Turin Shroud formation, hold your screen at 32 degrees and you’ll see it.
        Basically it means if you go long Jesus, you won’t get stopped out in the Next Life.

          2. The DOW isn’t really even trading for another 5 minutes yet Hugh, when it does, keep an eye on 17325, if that goes t’will be mayhem imo.

  21. Developing this engulfing candle approach: since 13.32 all the one minute action has been contained within that one candle, 6507/6523.
    As the prevailing trend is down that is maintained until 523 is broken, and accelerates if 6507 goes.
    6507 should coincide with 17325 on the DOW, so we could see some downside fireworks if they both go.

    1. On the basis of this still beta theory, looks like a breakout on the upside, saying downtrend now neutralised for the time being, so closed my remaining short at 25 and gone day trade long, 10 pt? stop.

      1. Taken 17 on that at 42, look to replace on a pullback to low 30’s, getting a bit overbought short term.
        The DOW bounced well off the danger area but still a lot of resistance for the next 150 pts.

  23. bot the ftse 6512
    looks like the downtrend is over
    stop at 6500
    tarrget i am aiming for 6550
    will make a quick 48 points

  25. hugh
    i am following your superb triple system
    it works great and i have changed my trading round
    is there any system you apply for your stops ?

    1. I find your system better than tmfp – 1 min 10 rsi
      its more a 50 : 50 system
      yours is robust and has a better than 80% success rate
      in this context – how do you safeguard the 20% failure with what type of stops?

      1. Thanks Paul – I only made it up on the fly from what tmpf was tweeting.
        The best thing I have found to do is to just tuck your entry in a candle or two back – also beware that you can be trading bull/bear flags.
        What i mean is… it will hit a high or low – trade sideways and then breakout again in the same direction.
        Also – what I have found & I might be wrong suggesting this….
        If the signal goes against you … do not trade the other direction – trade again in the same direction – you should be able to square off atleast.
        I think alot of it’s a personal thing – you’ll find what works for you.
        So like now the alert has gone off – 6542 – now 6547 –
        RSI Trio Here 6542 + PRT Resistance Line (now green @6548)

  28. Hugh
    thanks for your comments
    so you use prt lines along with the triple rsi.
    your explanation of the stops ” tuck away in prev bar” – what timeframe do you use for this – 10mins or 15 mins
    i generally use the prev low/high,
    i agree with you regarding changing direction, it does not make any sence to reverse just because your stop has been hit
    but truly a brilliant system,
    thanks for all your great ideas

    1. Paul – I’ve got plenty of ideas .. I have OCD which is also complicated by also having ADHD ……a wicked combination ! plus I can’t stop laughing when pushed …TMFP distracted me earlier and I’ve gone to pot ..LOL Haha.
      Will add some more later – got a bit of work to do !

      1. Paul –
        With reference to RSI stuff…
        As I mentioned – I only put the Trio thing together having read TMFP’s words of wisdom so I’m sure he could add far more than I could as to their good points and bad points.

        (I have a limited amount of time to screen watch, so I need something that is visual and precise hence, why I need the three points to agree and that’s my decision made.
        I use it on a 1 min.

        You had a good trade today “off of it” but you have to be careful with it.

        As with everything in TA – use it in conjunction with other basic S & R TA.

        I’m weary of it because it trades against the trend. I’d prefer to find something that is more trend based, hence why I’m using Supertrend at the moment – on different timescales & different setting and seeing how I run with it.

        PRT Lines – I’ve looked at them in the past and again recently – I’ve come up with a way they can be used but need to spend a bit longer with them to suggest anything meaningful !

    1. Seems to be bouncing off it at the moment.

      Would you go long again if it breaks through and holds?

    2. Resistance from here on up, but would be wary of shorting into close, looks a bit of a mission atm.
      Nothing broke on the bear side because of this bounce, probably a good shorting opportunity.

  30. After being 200 points up on the trade from friday, managed to get only 35 points as it closed out at 950. (1/3 was taken for 97 points)
    I’m up 140 points on this trade, it could all fade but I’m going to hold it
    564 on Dow will match 11010 or 30 on the Dax.

  31. So, still a bit of DOW fuelled life in the old dog yet, but still lower lows and lower highs.
    6507 or 6607, which will break first?
    🙂

      1. Technically it’s bearish, but I don’t feel it the way I have recently.
        Put it this way, I’d refer to sell into a rise over 607 than buy into a dip under 507.

  32. RJ, I’m long on the Dax from 859. Good few points up this afternoon, I see your holding too, what’s your time frame for holding, next few days?

    1. Hi Coombsy,

      My plan from last week was to hold it until end of this week or 11500 and it got stopped. If this is the bottom, I have a good entry at 830, I’m planning to run this atleast end of this week if doesn’t get stopped. I have it currently at b/e and have taken some profit of it so not worrying much.

      how about yourself ? What is your target ?

  33. Hi chaps
    looks like the market is still negative
    just travelling back from a business trip abroad so could not trade
    looks like a lot of people have nailed it today
    hope to see you chaps when i return home

  34. I too plan to hold and see where we are day after day. Have a target of 11400 but if I know myself will get tempted to carry on holding. I picked 400, as the peak on the daily chart could be seen as a slight decline across the tops.

  35. Fingers crossed our stops don’t get hit then. Just hope I have enough clearance as the dax can be volatile as we seen today. My stop just off break even.

  36. Just closed longs. Dow looks as if it about to wobble. Will look in morning. Have a bad feeling about the Dow.

  37. RJ, I thought Dow would stall around the 480 area but it didn’t. I see this going to 630 at the most.
    lets see what tomorrow brings.

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