Support 6655, 6646, 6639, 6624, 6608 Resistance 6678, 6689, 6775, 6780, 6790, 6834

Good morning. Well that bounce from the pivot yesterday was fairly short-lived, with prices falling back down to the 6655 area just after the close. All European stocks declined, amid continued debate over Greece’s fate, and speculation the Federal Reserve will signal a slow pace of monetary tightening. Greek stocks erased earlier gains after Prime Minister Alexis Tsipras said he’s ready to take responsibility for rejecting the terms of a deal on aid if creditors’ demands are unacceptable. The ASE Index fell 3.2 percent to its lowest close since September 2012.

“The situation in Greece is foggy and things can change any second,” said Nicola Marinelli, a fund manager who helps oversee 114 million euros ($128 million) of assets at Pentalpha Capital Ltd. in London. “The U.S. has picked up some momentum compared with the start of the year. The Fed will likely keep its stance and stay the course unless we get a big disappointment in terms of data on the labor market or growth.”

The Fed concludes its two-day policy meeting Wednesday, amid speculation mixed U.S. economic data and a deadlock over Greece may complicate the central bank’s drive to raise interest rates.

Greece
Even as Greek Prime Minister Alexis Tsipras intensified his criticism of the country’s creditors, German Chancellor Angela Merkel has said she will continue to do everything possible to keep Greece in the euro.

Greece has snubbed European pleas to submit a new proposal to avert insolvency, saying it was up to creditors to make the next move. The lenders say it’s the other way around. The focus now shifts to a meeting of finance ministers on Thursday and a June 25-26 summit of European Union leaders.

US & Asia Overnight from Bloomberg
Asian stocks rose for the first time in four days after the Federal Reserve said the pace of U.S. monetary-policy tightening will be gradual, with the central bank preparing to raise interest rates this year.

The MSCI Asia Pacific Index gained 0.4 percent to 146.71 as of 9:01 a.m. in Tokyo. E-mini futures on the Standard & Poor’s 500 Index were little changed after the underlying gauge added 0.2 percent on Wednesday. The Topix index slipped 0.2 percent as the Bank of Japan starts a two-day policy meeting.

The Fed maintained its forecast for the benchmark rate to rise to 0.625 percent this year, while lowering its projection for 2016. A rebound in job growth is giving officials reason to look beyond a first-quarter economic slowdown as they consider when to tighten policy. At the same time, inflation remains below their target, and central bankers say the timing of a rate increase depends on how economic data unfold.

“Yellen was dovish in the press conference,” said David Buckle, London-based head of quantitative research at Fidelity Worldwide Investment, which manages about $285 billion. “She was at pains to point out that monetary policy will likely to remain highly accommodative for a long time after the first rate rise.”

Australia’s S&P/ASX 200 Index fell 0.1 percent and South Korea’s Kospi index advanced 0.6 percent. New Zealand’s NZX 50 Index lost 0.1 percent after the country’s economy grew less than forecast in the first quarter.

Futures on Hong Kong’s Hang Seng Index slipped 0.3 percent and contracts on the Hang Seng China Enterprises Index of mainland firms listed in the city dropped 0.5 percent in most recent trading. Singapore-traded FTSE China A50 Index futures lost 0.1 percent.

Greece’s Prime Minister Alexis Tsipras said he’s ready to assume responsibility for the fallout of rejecting a deal with creditors, with talks among euro-area finance ministers to take place Thursday. Officials from the Netherlands, Portugal and Germany said they were bracing for a breakdown in talks that could roil the currency bloc. [Ref]

FTSE Outlook

FTSE 100 Prediction
FTSE 100 Prediction

It all looks pretty bearish at the moment so we will probably see a rise soon! There is Bianca support at 6624 (10d) and 6608 (20d) today, with resistance at 6775 and 6780 – so a good area to short if it were to get that high with both at similar levels. There is a fairly decent declining channel on the 30min and we are just at Monday low at 6655 again as I am writing this. However this is the 3rd test of this area so we could well see a break lower today (third tests of a level tend to break), but maybe the bulls will step in at 6645 for the bottom of the channel. If we do move lower then a long around 6630 looks viable. The moving averages are pretty bearish at the moment, with the 30min staying so since crossing over after that pivot bounce yesterday fizzled out. Todays pivot is 6689 so we may see a rise to that if the bulls are quick out the blocks this morning.

I have gone for an initial bounce off the channel, however if it starts to break then flicking short down to 6630/20 would be wise. if we break through the Bianca channels then the Raffs have support at 6590 (10d) and 6562 (20d). The ASX200 had a fairly bearish session today so I might be getting too optimistic with a rise to the pivot but we shall see. Short off the pivot is a good play if it does get there.

86 Comments

  1. While 52 holds worth a little long, if we get through 62 could have another go at the highs this morning. Stop 44.

        1. 1 Min – 3 RSI Alignment
          3 Min – 3 RSI Alignment
          5 Min – 3 RSI Alignment

          In the column REF (Colmn C) denotes time frame
          Large amounts of data on 1min and 3 min so very difficult to back test more than a couple of days. Hence why I thought it was good enough to keep a manual record.
          We’ll see how it goes…
          Once you have a back test complete you can ask it to “Auto Trade” – which works well. The only limitations I’ve found are my own programming skills !

          3. Gotcha, looks good. The only problem for me is that if I had an Auto trade program I’d have to do some gardening 🙁

  5. The market is only going one way. Everything points to more downside. Trying to catch the bottom is madness.

    1. LOL you post ‘6500’ and then go long at 6630
      Should be good for ~10 though, 60+ now on the 1 min 🙂

      2. 6500 as we were saying last week. remember you asked 7300 or 6500. I just reminded you that market is going that direction. 🙂

        1. sure, but it looks like your long is doing a lot better than my short atm
          Added a little at 53 stop 62

    1. I was going to long on Dax when i seen it hit 10814, now looking at it at 10902, drat

      2. I didn’t plan to trade, just saw such the opp, could not help my fingers. Once I mistaken and accidentally pressed sell, but came out quickly with -0.72 it was just after the spike. I need to be more careful.
        I was astonished as soon as I took long it flew 25 points up.

        1. Something about rumours EC and ECB are going to release a statement on greek debt relief…..humm

  10. “tmfp says: June 18, 2015 at 10:25 am
    out
    Haven’t broken 60 rsi on the 1 min for 2 hours. That’s what you call weeeak.”
    tmfp, I noticed as soon as RSI showed a reading ot 60 or more after that you can notice the continuation of the rise for some time until it finishes, settles etc. It’s good enough to go long on such readings for some pips. Is that what you do? if yes, could you tell me the reading for the sell?

    1. I’m waiting for it to settle higher up. Appears rumours will fuel market up with hope of a deal, before a drop back down

      1. Wish I knew Jack 🙁
        40 can be resistance or support, depending on the overall trend, like 60. When a prolonged period above/below ends, then it says to me that a change of direction is on the cards.
        Doesn’t work all the time, as you may have noticed.

        1. I know what you mean. I have been thinking about it now, indicator cannot always be right. It’s the combination of things that “make” the price matters like trend, levels, waves etc. Just hoped for a second that this could be a Grale.

          1. I like rsi because it’s as ‘real’ as an indicator can be, it tells you the immediate situation regarding momentum and how strong and substained the buying/selling impetus is.
            I am sure people succeed with more abstract analysis, Ichimoku Clouds for example, but they seem divorced from reality for me, maybe because I used to be a floor trader.
            Trading extreme rsi readings can usually get you in at the top or bottom, what you do after that is another matter.

          1. Indeed, hit it and bounced back off it. Should have just let it run. But when I seen it come back above the support at 10909 I thought we might be heading back up to 10940.
            Oh well, at least I got some pips in the bank.

            Keeping an eye on DAX, if it breaks 10880 then could be looking at where we were earlier at 10820. So will set a sell order for 10876

  14. tmfp, I appreciate the importance of RSI, I use it as a back up confirmer, when it Stochastic crosses down and RSI drops that indicates possible start of move. But MACD is more solid indicator for me alongside with EMA. Apart from indicators of course you look at price actions.

  15. Hugh, you got me going on trading systems again! 😀 This one is high frequency/short term. Up about 30 points on the day atm — has been about +50. Now short from 6665 and looking for 10-15 points say.

    1. Aye Aye Jim – I know – they’re a pain and a distraction really ! – I’ll send you over the code I’ve done (probably later tonight )

      1. Thanks Hugh, shall be glad to reciprocate. Current system just under 40 pts up since open. Too much trading during flat spot from 12:00 to 14:30 — perhaps not a problem though with automatic trading.

  16. I’ve placed a short order on the DOW at 18117 100 point stop.

    i just have a feeling we’ll have a big spike then a drop then further downside next week, I’m just looking for a good entry

    1. No new positions today (so far). Was hoping something that something may happen at 3:10 – but the 3rd RSI just didn’t make it.

  20. This IG is getting worse in order execution. Any suggestions for better platform guys?

      1. ETX is faster than Spredex. I am impressed. You close on an instant. Really fast execution. Just don’t like these OK tables jumping up after closing a trade. It’s just not necessary. You want to move on to the next trade, but here we got some OK button to press.

  21. I am short on the DOW from 17755 and getting absolutely and utterly murdered. Can anyone see any downside looming?!

    1. doesn’t look like it will come down before 18300 looking at the daily charts. Your best bet would be to hedge if your platform offers that capability.

    2. Get out now, Si and switch long onto cac. That way you will get your money back. Dow is moving in one direction only in the next few days and will drag the others with it. FTSE at 6700 is inviting, but £ has shot up and makes London overpriced to overseas investors.

    3. I’ve been there. Last autumn I ran into nearly a 1000 points loss, closed somewhere on -600 or something like this, 2 grand with tops and pieces were gone. £2 max pp. I have it in records somewhere but like everything bad it tends to erase from your memory. I don’t know if it will go down or not, but -400 points is worrying especially on Dow. When all the rest of the markets retraced Dow didn’t. It may drop to 18000 though who knows, retrace to the top of 17June. or the worse case it will continue to drag up. Maybe Friday some sell off?

  22. It seems I do better when not boring you guys with my running commentary, got on the long side b/f US opening and out on the bell, so repaired earlier wreckage (and I’m sure you’ll be glad of the P&Q).
    🙂

      1. Lol, thanks guys, I’m not fishing for compliments, it was an interesting experiment.
        Sitting on my own for 50 hours a week operating a pretty rigid system was driving me a bit crazy(er) and I thought it would be fun, also so I could look back at my decisions with a bit of context.
        Got a bit out of hand, when I was doing well I felt like I was showing off and when badly looked like a d*ck. (not duck).
        You won’t get rid of me that easily though, just everything in moderation.
        🙂

  24. Hey Hugh, have you thought about the stop loss aspect of an automated W&G?
    Stops are always difficult with an rsi based system because usually when it goes against you it just makes the original position look wrong in timing, but still right in concept.
    But one can get mullered on trending days, so could you at least get it to suspend itself, say if the rsi stays continually within a certain percentage of the extreme for a number of time periods?
    A counterpart of the 100 point auto profit might work, say 50 auto stop, but it’s a bit crude.

    1. Remember I mentioned about my programming abilities ! 🙂
      I’m sure there is a way of doing this though.
      I agree with the point you’re making though.
      If I run the same Back Test on the DOW – the results are poor.
      So as always – I’m a little cautious !

  26. Hey nick, like the new layout for gold dax etc but am having difficulty loading up the links others are posting. Anyone else having the same?

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