Support 6639, 6624, 6611, 6575 Resistance 6696, 6728, 6748, 6801

Good morning. Well that was a pretty bearish Monday in the end, with the FTSE following the oil price down as it made 5 year lows. I mentioned last week that I was expecting the S&P to drop down to the 25ema daily area at 2052 and it nearly got that yesterday. As its nearly there then that could set up bounce today. We are also at the bottom of the Raffs on both the FTSE and S&P. Santa Rally will have its work cut out if it keeps selling off! Bulls will be desperately keen to get the FTSE back above 6700 early this week, preferably today. This has become a bit of a regular pattern though with the weak bearish Monday, and then if we rally today, another bull Tuesday.

Asia Overnight from Bloomberg
Asian stocks fell, after U.S. shares dropped the most in almost seven weeks, as oil extended its decline and a stronger yen weighed on Japanese exporters.

The MSCI Asia Pacific Index (MXAP) slid 0.3 percent to 139.70 as of 9:06 a.m. in Tokyo after adding 0.1 percent yesterday. Japan’s Topix (TPX) index decreased 0.7 percent after the yen added 0.6 percent against the dollar yesterday. Brent crude and West Texas Intermediate slumped to five-year lows.

“The oil move we’ve seen has been large and rapid, and whenever you see those large and rapid moves in the market, it creates a large degree of uncertainty,” said Angus Gluskie, managing director at White Funds Management in Sydney, which oversees about $550 million. “In the long term, it will be positive in many ways, but in the short term, it’s an immediate blow to the financial positions of companies participating in the oil sector.”

South Korea’s Kospi index slipped 0.1 percent. Australia’s S&P/ASX 200 Index sank 0.7 percent, while New Zealand’s NZX 50 Index was little changed. Markets in China and Hong Kong are yet to open. The Shanghai Composite Index yesterday topped 3,000 for the first time since 2011 as brokerages surged on bets the world-beating stock rally will continue.

Futures on Hong Kong’s Hang Seng Index fell 0.1 percent in their most recent trading session, and contracts on the Hang Seng China Enterprises Index lost 0.5 percent.

Futures on the Standard & Poor’s 500 Index gained 0.1 percent today. The equity measure slid 0.7 percent yesterday, the most since Oct. 22, retreating from a record high as energy shares led declines.

WTI slipped 0.2 percent to $62.93 a barrel today after dropping 4.2 percent yesterday to its lowest since July 2009 amid concern hedge funds and other money managers bet too much on rising prices. Both Brent and WTI tumbled 18 percent in November as OPEC decided to maintain its output target.

FTSE Outlook

FTSE 100 Prediction
FTSE 100 Prediction

Im going to stick my neck out and be bullish today, with support at 6635, 6624 and 6611. Only in the even of the latter breaking will I then change stance to bear. I have been expecting the S&P to drop to test the 25daily ema and its nearly done that; we are at the bottom of the Raffs on the FTSE and the S&P so we could get a bounce after yesterday trending down day. I do hate trending days as that long obviously got stopped out and rather than just flip to short I decided against rushing in.

78 Comments

  1. No surprise for me today. Been calling this and been a bear for weeks! Just a shame i didn’t sell more!
    Anyways got to work with my bull now aiming to get short again as soon as possible.

  2. What a fall overnight!
    Had some DAX shorts yesterday, which I closed around 10,000 level, saw a lot of traders discussing next aim of DAX 10150….look where DAX is now…if I just held over night, never mind, better safe….
    These overnight positions can cause a lot of trouble for a day trader if wrong way, I guess those with longer view and margin can hold longer for bigger reward/ also bigger risk.
    For the month of December FTSE falling from 6750 to 6580, is quite a huge blow to the Santa rally, and like this do we call off Santa rally this year? GLA

    1. THat’s a lot better mali. I too had a dow short order @ 870 during close to keep it overnight, but cancelled it. WHo knows what will happen during night?
      Earning in day light is very much suffucient by God’s grace . Good day 🙂

      1. yes, and we need the sleep. 🙂
        Yesterdays last message from me: “Closed all my FTSE longs at profit” 🙂
        Shows best to stick this strategy – avoid overnight business while asleep.

  3. BTW a kind of mistake this morning, went long DAX @9925 (S1 support level), and it fell to 9880 or so, didn’t buy anymore, and watching FTSE falling like a stone made me nervous, so waited a bit, and soon after open DAX recovered and I closed early @9930 – only 5pnts+.
    Never possible to get that bottom, is it? Buying below 9900 and selling above 9940, would have been ideal…:-)
    No DAX positions now.

    1. Thursday 09:00 ECB
      Better yet use this for data:
      http://www.dailyfx.com/calendar

      Personally don`t have my `rhythm` do trade regularly. Personally can`t see it going up, but with `possible` Santa rally, right now caught between a rock and a hard place…
      Though have to mention the growing numbers of buyers which could mean stop-hunting

    1. I hoped that its not too much bearish to break S3, also today FTSE bouncing from S3. Thinking of short near 6624 or long near 6577 range.

  6. I thought 6640 was a support level, glad morning market just went below that without any delay, otherwise might have bought at that level….now can see 6630-6640 being top for today max I guess, any thoughts?

  8. There should still be a christmas rally but those who were dreaming of 6900 and above won’t get that. We could still finish the year around 6750 though assuming central banks make some sort of effort to prop up markets again. The FTSE is getting destroyed by miners, oil and gas and supermarkets but these have fallen so much there can’t be too much downside left. Would be great to see a test of 6050 this month just to see the faces of the so called experts who are calling for 7000!

    1. Been selling to those betting on a santa rally for weeks! The market has rallied since middle of October. Was it really going to go that much further?! What’s there to be positive about? Downside has always been the bigger risk.

      3. I didn’t see that, Senu. Just commented on arrows as usual.
        Mlawrence, I said it a couple of days ago when it was long, it didn’t refer to today’s or yesterday’s days.
        I have a losing day.

  11. Buyers disappear, stops get hit, bulls give up and become bears (like the majority on here)? Always the stairs up elevator down.

    1. looks very similar to the start of the October crash! Could it happen again this month albeit a smaller version??? Maybe santa got his calendar wrong and visited in November haha!

  14. Will the US drag us up?! They probably want to hit those records and i doubt they care too much about Tesco?

  16. yes, its full on bear!
    DOW 18,000 – dream on…
    FTSE 7000 – dream on…
    DAX 10150 – dream on…

      1. Added some longs, but looking to short around upper resistance levels, waiting for those to reach, so waiting, don’t want to enter a short at lower support levels…
        I doubt any move up until maybe Thursday when ECB speaks, or next week now, I have feeling. GLA

  17. Today WallStreet won’t be happy and I doubt they will move us up today…
    Things are changing today…18,000 not coming, maybe the full on bear started in Dec instead of Jan…
    However got to say, lower fuel costs, has resulted in less money filling car and more money in pocket, ie consumer spending power up.

  18. FTSE hits 6550! WOW, there Santa rally gone down the drain 🙁 long stopped
    Bad day…no more trades today for me, let the market cool down

      1. Heh. it was Dax, I decided to try something different. I was long 9928 in the morning and was +17 but it dropped to 0 to close b/e. Then I’ve seen my short signal and even took short 9931.5 but it didn’t last as I was thinking it should go up it should go up, Nick’s arrows are too bullish. And against all common sense I decided to open stop loss as I thought it just gets hit all the time so better avoid it, what was next – no need to explain. US didn’t help, on the contrary so I closed -92 points, plus those 30 odd in the morning: 135 points total or pounds it was. £1pp I am down to now until I start making good results no point to increase stake. Now break till new Year def.

      1. yes, sat with shorts, and never did it fall like this, and just added some longs and they decide to fall like a stone…anyway days up for me today, so don’t care what happens today anymore, back tomorrow hopefully refreshed with better plan. GLA

  24. Nick what’s your target? I went long at 50 as well. Reduced 1 of my bulls @70, perhaps ambitiously looking to reduce again @90?

  25. Should have bought TESCO first thing in the morning and is not the reason FTSE further down since morning, opened at 155.55p and not 174p…did anyone buy?

    1. Agree, its same for all, I think most bull just thrown the towel today like me, so waiting on side-line to see what happens, restart fresh tomorrow. Never overtrade…if wrong admit and stop, and refresh. Not happy today, but its part of the game I guess 🙁
      Good luck those in, but looking to see a solid support base forming first.

  29. Its funny, how all headlines seem to bearish when market is already down, and so bullish when markets already up…typical

  32. Jack, if you not settling in well and still want to trade, better choose one index and follow it closely.

      1. I bailed at 6635 unfortunately, should have stuck to the gut. But still a nice amount before the rally.

Comments are closed.