Support 6730, 6714, 6698, 6663 Resistance 6755, 6775, 6790, 6828

Good morning. Well that bullishness continued pretty much unabated yesterday and wasn’t too good for the 2 shorts that I put in the trade plan. Fortunately they had tight stops so only lost 20 between them, but the long that ran from 6638 more than made up for that. We are nearing the top of the 10 day Bianca channel at 6775, a level likely to be hit if we break 6755 today. Today is of course the Autumn Statement from the chancellor so there could be some market effecting elements to that. Todays dividend is only 1.1 so won’t bring out the divi hunters in the closing part of the session. Just bear it in mind if you have a position open over the closing bell. Bit of a bearish article here today from the Telegraph for some festive cheer…. still think we will see 7000 before anything majorly bearish, whether the bulls can hit that this year or not remains to be seen…. Was yesterday’s rise to suck in the early Santa Rally bulls who are about to be squeezed?

Asia Overnight from Bloomberg
Asian stocks pared gains, Australia’s dollar slid to a four-year low after economic growth unexpectedly slowed and crude oil advanced.

The MSCI Asia Pacific Index was little changed by 3:13 p.m. in Tokyo, with Japan’s Topix (TPX) index adding 0.1 percent to the highest close since June 4, 2008. Hong Kong’s Hang Seng Index fell 0.5 percent. South Korea’s won fell 0.5 percent, while Japan’s yen fluctuated after touching a seven-year low. The Aussie weakened to its lowest level since July 2010 as local bonds rallied. West Texas Intermediate oil rose for the second time in seven days and silver retreated 0.7 percent.

The yen’s 15 percent retreat versus the dollar since June 30, spurred by the Bank of Japan’s record stimulus as the Federal Reserve wound up its bond buying, has helped boost the competitiveness of the country’s exports. Gauges of Chinese and Japanese services rose, with similar data for Europe also due before a private U.S. jobs report. Australia’s economy grew at less than half the pace predicted by economists in the third quarter, slowing to 0.3 percent from the previous period.

“There’s a partial flow of money from commodities to equities,” said Hiroaki Hiwada, a Tokyo-based strategist at Toyo Securities Co. “Liquidity is gathering in the U.S. market, and we’re generally experiencing a ‘triple-high’ of a stronger dollar, higher bonds and higher stocks for the first time in a while.”

Asian Stocks
About five stocks gained for every four that retreated on the MSCI Asia Pacific Index. (MXAP) The Topix earlier climbed as much as 0.9 percent. The Nikkei 225 Stock Average closed 0.3 percent higher. Toyota Motor Corp. rose as much as 2 percent after U.S. sales increased 3 percent versus an estimate for a 2.1 percent increase in November.

The Hang Seng Index in Hong Kong dropped after rising as much as 1.1 percent and the Hang Seng China Enterprises Index fluctuated. The gauge of mainland Chinese shares listed in Hong Kong jumped 2.8 percent yesterday.

The Shanghai Composite Index rose 0.8 percent after jumping 3.1 percent yesterday amid speculation the central bank would cut lenders’ reserve ratio requirements. The benchmark gauge for China’s biggest equity market has climbed nine of the last 10 trading days, driving its 14-day relative-strength index to 88, the highest since January 2007.

China’s official non-manufacturing purchasing managers’ index climbed to 53.9 for November, from 53.8 the previous month. A private services gauge from HSBC Holdings Plc and Market Economics came in at 53 versus 52.9 in October.

SGX Error
Singapore Exchange Ltd. delayed the start of trading in the city-state’s securities market by more than three hours, citing a software error. The second disruption in less than a month drew a rebuke from the Monetary Authority of Singapore.

Australia’s dollar dropped for a fifth straight day, declining as much as 0.7 percent to 83.89 U.S. cents. The country’s gross domestic product expanded 0.3 percent last quarter from the previous three months, when it rose 0.5 percent quarter-on-quarter. Economists surveyed by Bloomberg predicted growth of 0.7 percent. The Reserve Bank of Australia kept its key interest rate at a record low yesterday.

Three-year government bond yields dropped six basis points to 2.36 percent, near the more-than two-year low touched on Dec. 1.

Brent, WTI
The yen traded at 119.25 per dollar after sliding to as weak as 119.44 to the greenback, the lowest level since Aug. 9, 2007.

South Korea’s won slid to 1,112.80 per dollar, approaching a 15-month low amid concern the country’s authorities will seek to weaken it further to shield exporters against the effects of the yen’s retreat. Samsung Electronics Co. Vice Chairman Lee Jae Yong told employees at a semiconductor plant last month to come up with ways to sustain competitiveness amid a weak yen, the Maeil Business Newspaper reported today, citing the company.

Brent and West Texas Intermediate crude rose for the second time in three days amid speculation that losses stemming from OPEC’s decision not to cut production have been excessive. Futures rebounded as much as 1.3 percent in London and 1.6 percent in New York.

FTSE Outlook

FTSE 100 Prediction
FTSE 100 Prediction

Initial resistance is at this current level of 6755. Above that I expect us to hit the 6775 top of the 10 day Bianca, and also the top of the 10 day Raff at around the same area. we have had a decent and rather rapid bounce off the 6635 bottom channel area so I think this will be a good spot for those bulls to take some profit and hence we get some bearishness there. That said, above that we have resistance at 6790, being the top of the 30 minute rising channel. We will just pop straight there? I am not sure, so will look to go short at the 6775 area and see what happens. There is always the play of going in half stakes and then add at 6790 to bring the average up to 6783ish, but that starts getting a bit riskier when the levels are far apart. Above 6790 then the top of the 20 day Bianca is 6828 so note that resistance level too. Doubt we will see that today though (famous last words)!.

Support wise we have 6730 which is the bottom of the rising channel, with the daily pivot at 6714 below that.

49 Comments

      1. 55 Senu. Had my price in @60 but just hit the button.
        Thinking of just hitting the button around 20 but guarantee it will do exactly the same and go further the second i do!

        I think the market knows my prices and toys with me. It’s stressful enough as it is…

  2. Morning Lawrence
    Software signal – Sell 6741 T1 = 6711/08 T2 = 6684 T3 = 6663/0
    Bizarre as it may seem in this Bull Market ?
    ( Bounce from T1 to Sell signal – ??? But what do I know )

    2. Was hoping for 6765/6775 to short this morning. Might be a big ask now, as its failed to break 6755

  3. I’ve been scalping 6-8 points from the long side against the RSI on the way day, but I think 6720 held very well and it might look cheap later on.
    How can Osborne say anything that’s bearish?.

    1. Personally, I completely ignore the US markets until they open properly at 1.30. The markets that are actually open are the ones I look at, like after 16.30 I ignore the ftse and trade US.

  7. Anyone else feeling the strong resistance in going up again? I’m stilling holding onto my gut feeling of another down before the rally

      1. Something still is telling me there is more down days to come, the charts just dont look right for another massive jump

        1. Grammar correction*

          Something is telling me that there are more down days to come, the charts just don’t look right for another massive jump, it just feels all wrong! My gut, ignore me if you disagree, is saying down to 66** as a minimum then up.

  8. Had a FTSE short@30, closed it now for 6pnts, as FTSE not moving, if it jumps back will come in higher…if not maybe once US opens…GLA 🙂

      1. That’s a weight off my shoulders Senu! Feel about 10 stone lighter. 3 left now… It’s slowly sliding and what small rallies there are are failing.
        Will Sandps really push past 2070 and take FTSE with it or will they dip from there?
        6720 is being very stubborn though..

  11. It will maybe go lower, once all shorters like us fedup off waiting, and close our shorts…typical.. 🙂

  15. Hi everyone.anyone else long at 6715? Had a dismal few weeks intermittent internet and plenty of bad form on my part=in the red .comon long!

  18. Yea Shane, I was stuck with a short from yesterday @30 & when RC said it would drop I held on and closed it @14, must be great to have a system to give you reliable direction, takes a lot of stress out of this game

  19. And again US push us up at open, I guess that’s more or less 99% certain now, everyday same story 🙂

    1. sanps still high so confident 00 will be hit. Sandps regularly seem to switch off from this 2070 level.

      FTSE isn’t reacting to other markets moving up but follows when they move down.

      I’m unsure on how the market will react tomorrow if at all.

  23. Shane
    T2 & esp T3 are Strong Generally.
    If market gets there – Then expect a bounce.
    You remarked you were a novice, So don’t get
    carried away with

    shane says:
    December 3, 2014 at 4:18 pm

    on the way down now 🙂

  24. Can someone explain to me what will happen if they DO and DONT ease QE? Surely easing QE means the market falls, not easing it means it rises? I don’t understand.

    1. Hi Ravi – general rules are:
      Good news = Up
      Bad news = Down
      However
      Expected good news = Down
      Expected bad news = Up
      Buy the rumour sell the fact etc.

      As for tomorrow i’m not sure. People have been buying the rumour but i think they might be fed up of hints and want action. So there will probably be not much change to whats said and not much change in the market.
      I’m likely to stay short.
      Only thing would be a shock announcement tomorrow is that QE is confirmed in which case i would buy. Still a tricky one though as it’s expected but not expected at the same time.

      The Scottish vote is a good example of ‘expected good news’ yes there might still be an initial rally if you can trade it when the news is announced but even being short before was a safe bet.

      1. Thanks Mlawrence01, I got the good news/bad news bits, its just yeh, I don’t understand whether QE is good or bad! Because it could be spun both ways.

        e.g
        QE easing, is good (buy) as it shows the economy is all good
        OR
        QE to carry on as normal, is a buy as in the past when they carry on with QE the markets really

        Its incredibly difficult to predict, sitting out of these sometimes gives my heart more comfort and going for the easy wins, maybe thats part of the trick in trading.

  27. Sorry late message been out all evening.
    For tomorrow be warned…or at least be aware…that MR. Draghi speaks, ie ECB

    No matter what’s on offer from ECB, as long as Mr. Draghi speaks, I recon DOW 18,000 and DAX 10050 and FTSE 6800 possible tomorrow, hence be aware. To avoid risk I think best not to have any shorts at all now, until after ECB speaks. (This is what’s been happening recently, he opens his mouth and markets fly up)

    Draghi just needs to speak and promise, no action needed from ECB and markets around world will fly up tomorrow, be prepared, I think some quick longs should make easy money tomorrow – Agree?/Disagree? GLA for tomorrow!

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