Support 6730, 6719, 6714, 6710, 6664 Resistance 6752, 6774, 6784, 6790, 6817

Good morning. Well that was rather interesting, both levels in the trade plan got hit but what was that drop and rise at the close all about? Stop hunt maybe? It certainly bounced back having dipped to the 6710 area which was the bottom of the Bianca channels. The Divi will be applied today but its only 0.9 points, but just bear it in mind later on. Thanksgiving holiday int he US tomorrow so the markets might well be quite flat, then black Friday to end November. Apart from that sharp dip and bounce at the end yesterday it was another fairly lacklustre display. The bulls failed to break the 6744 level with any conviction (just as well as the short was there!), but did fight back from the lows…. so a mixed bag of sentiment. As mentioned yesterday this week is typically bullish.

Asia Overnight from Bloomberg
Asian stocks rose, with the regional benchmark index heading for a fourth day of gains, as materials and health-care shares advanced, countering a decline in Japan’s Topix (TPX) index amid a stronger yen.

The MSCI Asia Pacific Index (MXAP) added 0.1 percent to 140.90 as of 9:03 a.m. in Tokyo after rising 1.1 percent the past three trading days. Japan’s Topix slid 0.3 percent as the yen gained 0.1 percent to 117.81 per dollar after advancing 0.3 percent yesterday. U.S. stocks slipped from a record as a drop in consumer confidence offset faster economic expansion.

“We’ve got a mixed picture,” said Chris Weston, chief market strategist at IG Markets Ltd. in Melbourne. “We may see the market run out of steam at the moment, but a pullback will be a buying opportunity.”

South Korea’s Kospi index climbed 0.1 percent. Australia’s S&P/ASX 200 Index gained 0.9 percent, while New Zealand’s NZX 50 Index increased 0.3 percent.

Futures on the Standard & Poor’s 500 Index were little changed today. The measure declined 0.1 percent yesterday. Consumer confidence in the U.S. declined to a five-month low in November, to a level that was weaker than the most pessimistic estimate in a Bloomberg survey of economists. Gross domestic product rose at a 3.9 percent annualized rate in the third quarter, up from an initial estimate of 3.5 percent.

West Texas Intermediate crude reached the lowest level in more than four years after nations supplying a third of the world’s oil failed to pledge output cuts before tomorrow’s OPEC meeting.

Futures on Hong Kong’s Hang Seng Index and the Hang Seng China Enterprises Index each lost 0.1 percent in their most recent trading session. [from here]

FTSE Outlook

FTSE 100 Prediction
FTSE 100 Prediction

Its tested the resistance from yesterday at 6752 in the early hours of this morning, and the bulls need to break that to push to the top of the Bianca channels at 6790 and 6817. However, I do have Fib resistance at 6773 first so if they break 6752 then we might well get a stutter there. I am expecting it to be a bit like yesterday and be relatively flat with a slow bullish element, as long as support holds at 6719 and 6714 which is the bottom of the Bianca channels today. If they break and it drops through 6710 then the 200ema on daily is the next support at 6664. As mentioned yesterday I do still think we will get a dip before the rally kicks in, so shorts around 6790/6800 could well pay off over the next few sessions if it were to get that high this week. Todays pivot is 6730, and we have the rising 30min coral line at 6737, so I expect we may see some support around that area, though we are not far above it as I am writing this.

For today I am thinking along similar lines to yesterday with a rise to resistance at 6755ish initially, a dip to the pivot at 6730ish then a further rise. I think he top of the Bianca channels will hold as resistance for the moment, and its worth noting we also have support from the daily Raffs at 6700/6710 today.

69 Comments

  1. Hi chaps

    Just thought I’d show up to just update from yesterday.
    Software Signal – Sell 6764 T-1 = 67309 T2 = 6688
    Hope you guys have a good & profitable day.
    Cheers

    1. Yes, I had a feeling when last week it was mentioned to short with stop at 9900, I thought it must go over 9900…hence didn’t, as it burnt me before…
      Question is, how close to 10,000 it will get? Or will it set new record with Christmas rally? Anyone got any signals for DAX?

        1. Hi Senu, was out last night playing Badminton, at 9pm managed to close for 7pnts gain…usually avoid keeping a trade overnight if I can, to sleep well… 🙂

  6. When is this going to fall?! It almost has to before the Santa rally… this doesn’t feel like the Santa rally. I feel a fall to 6500 over the next few days then the rally begins…

    1. Hi Ravi, what basis is that 6500? they might very well consolidate at these levels for some days and carry on with the santa rally. The more shorts going in, they keep going higher.

      1. Just an educated guess at best, we know its going to go up mid to late December, but I’m relying on the fact it just can’t go up continuously like this forever in small increments, so at some point it has to drop.

        I can’t see it dropping to the higher resistance areas of 6300-6400 so going for 6500 as there will be a charge for 7000 I feel, later in December.

          1. Isn’t everything an informed guess in this trade anyway? I’m not a day trader, more swing, so hoping on the MACD pivot downwards then when its safe bets, go for a short

  7. I think it will range again today, so trading on 3 min 10 period RSI, 30/70. Two signals so far, sell at 60 and just now buy at 39, looking for and taken 10 points on each.

  9. Too many people relying on this Santa Rally for comfort for me.
    It doesn’t bother me personally, I only day trade, but everything looks overbought, especially DAX and DOW.
    Interesting fact: US equity markets have traded above their 5-day moving average for 27 days straight – the longest such streak since March 1928.
    Read about what happened in 1929…..

    1. First off, Hi Nick, not posted for a long time, had to re register.

      tmfp – nice point, but, March 1928 to 1929 was a long space of time.
      TBH you can not compare the two now, as internet has changed the ways things work. Don’t get me wrong,I think everything is over bought and most longs should of closed due to massive rises in last 35 days.
      What you need to remember though is, they don’t care if they take your money from going long or short, it’s all the same to them.
      So, the longs have closed mostly, everyone is shorting now, lets take it up more and reap the rewards from the shorts who cant hold.
      America is closed now until next week. Low volume = Big swings, and the only way it will likely go is up. Same happened last year. If you are short, (and I am) make sure you can hold.

      GLA

  10. Dax at 10k, S&P 2100, Tokyo strong rise despite terrible economy. It will all start switching off soon and it’s not unlikely that we will soon be waking up to a collapse overnight.

  11. Senu, agree, the more percentage shorts I see, the more market goes up…like DOW all this month…I think IG showed 88% clients short once this month, but market kept going up…I guess it will turn, when shorter’s throw the towel. I got burnt too last 2 wks.
    Anyway new buyers for the rally wont emerge if we don’t get a short breather, but when that comes who knows, its impossible to predict the top, but support we can take from past support levels.
    I think this week will continue flat, low range, as more bullish bias, and low trading volume, as I think US holiday week from tomorrow…so really Monday back to trading…

  16. Gd day gentlemen, look time no post =p. Been busy with uni and whatnot, but glad to be back.
    Been watching on the sidelines and boy the market is fked up as ever! Time to observe and do some paper trades before i get down to business…
    Gl all

    1. If 15 is hit i would then close the 3rd @00. That then means i won’t go long until 6685ish. Just like RC’s system.

  20. Dear Santa
    For Xmas I would really really like to be able to trade successfully,ignore any impulses to trade off my own back or analysis and some trading lessons please
    Cheers
    Ps and some luck wouldn’t hurt either!

  23. One of these days the indices will have a bad day, and buyers will buy the dip and get caught out, but until the big boys decide to sell off just going to wait. Last year this time indices dropped until 2nd week of december. Interesting to see what happens, black friday will see the market move up so looking to next 2 week sfor a possible 2-3% drop before rally kicks in

    1. Good to hear from you mate, Am of the same view, so on sidelines this week. First two weeks of Dec should interesting 🙂

  24. I think all date is known and priced in and expected. It will have to be hell of a lot better than expected to do anything?

  25. I expect today to be flat market and to give consumer boost before Friday shopping, market will maintain this bullish sentiment to consumers…next week who knows?
    GLA

        2. Hi Jim
          Point taken.
          Just phoned up to the local Gym, to enrol the Software
          for a 2 week workout. Must get it in shape for the much
          touted x-mas rally.
          p.s. Hope you are keeping well

  27. So what targets are the punters waiting for? 18000 dow. 2100 saps. 10000 DAX? The main risk is the market will start slipping and they’ll have to get out…

  28. Been holding my shorts for weeks! The day i give up on them it looks like the market could turn around. Still open in my book though

      1. I gave up. I thought the same, but then gave up as I said, it doesn’t matter where it will go. And I did the right thing, it’s 250 points higher now from the moment I exited.

  31. Senu still have my short on Dax at 9861 am more than happy to add a little more at 10000… Never day trade most of my trades are over a few days to weeks… Must say am not sure where this rally in the Dax has come from… Draghi speech really has fired up this rally… Thing Draghi forgot to mention before he gets full QE he needs to get agreement from Germany who have already said they would vito. Then there is the other problem how do you decide which country’s get QE… Europe is not the same as USA.

    1. Sorry late, been out all evening….anyway that’s brave holding short from 9861, doesn’t that add up losses, depending on trading size etc, I found that running your losses and paying fees etc mostly is very risky…
      But you say your trades are over few days to weeks, so you must be doing it frequent…I prefer not to hold overnight, because of manipulation up or down…
      Tomorrow a lot of data from Germany…so will effect DAX surely…and someone mentioned Draghi speaks around 12.30? is that right?
      When he speaks, even if just promises in the future…DAX seem to fly up…
      GLA

  32. Mali I trade on fxcm there is no over night fees when you short the Dax.. If I stay short for the whole year I pay nothing only the spread when I first open my short. On the odd occasion when I day trade I would have at least a 100 point stop out on Dax as this market can move, when I trade a longer timeframe I look at all 30 companies within the Dax and see how overbrought they are on a ie if 20 companies are overbrought then I would have a better chance with a short than a long.

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