Support 6740 6736 6723 6716 6705 6690 Resistance 6761 6776 6809 6830 6852

Good morning. I hope you had a good weekend. The main news was that Greece is edging closer to a third bail out deal, while it looks like China will be providing more stimulus as there are a few more flashing warning signs, as exports and factory gate prices collapse in July. China’s producer price index (PPI) fell 5.4pc in the year to July, according to the National Statistics Bureau. This compares with expectations for a 5pc decline and represents the steepest fall since October 2009. Persistent weakness in commodity prices and soft demand in the world’s second largest economy mean factory gate prices have suffered 41 consecutive months of decline. It follows disappointing data on Saturday that showed exports shrank 8.3pc in July compared with a year ago. Analysts had forecast a decline of just 1.5pc. Meanwhile, Greece’s creditors agree on draft deal after marathon talks as Finland’s foreign minister criticises the rescue and inists ‘Grexit’ is still the most likely outcome

US & Asia Overnight from Bloomberg
Asian stocks fell after China reported bigger-than-expected slides in exports and producer prices and U.S. jobs data boosted trader expectations for a Federal Reserve interest-rate increase next month.

The MSCI Asia Pacific Index declined 0.1 percent to 140.89 as of 9:01 a.m. in Tokyo. The gauge has slumped the past three weeks amid efforts by Chinese authorities to stem equity-market declines and as investors analyzed U.S. economic data for clues as to the timing of the first U.S. interest-rate increase since 2006. Traders in interest-rate futures are pricing in a 54 percent probability of a hike next month.

“Share markets are likely to remain volatile in the next few months,” said Shane Oliver, Sydney-based global strategist at AMP Capital Investors Ltd., which oversees about $119 billion. “Uncertainties remain regarding Chinese economic growth and a likely Fed interest-rate hike lies ahead for later this year.”

Japan’s Topix index slid 0.4 percent. South Korea’s Kospi index declined 0.1 percent. Australia’s S&P/ASX 200 Index rose 0.1 percent and New Zealand’s NZX 50 Index was little changed. Markets in Singapore are closed for a holiday.

Data on Friday showed U.S. employers added 215,000 jobs in July and the unemployment rate held at a seven-year low of 5.3 percent. The gain in payrolls followed a 231,000 advance in June that was bigger than previously estimated. While the report also showed a pickup in hours worked, average hourly earnings climbed a less-than-forecast 2.1 percent from a year earlier.

Shipments from China shrank 8.3 percent in July, more than five times the drop projected by analysts, stoking concern over Asia’s largest economy, which is estimated to grow at its slowest pace this year since 1990. Producer prices posted their steepest slump since 2009, data showed Sunday.

Futures on Hong Kong’s Hang Seng and Hang Seng China Enterprises Index fell at least 0.5 percent Friday. Futures on the FTSE China A50 Index lost 0.2 percent, while those on the Shanghai Shenzhen CSI 300 Index added 2.6 percent in most recent trading. [Ref]

FTSE Outlook

FTSE 100 Prediction
FTSE 100 Prediction

As I write this at 6am it looks quite positive with a bounce off Fridays lows managing to hold, helped by the thought of more Chinese stimulus and a tentative Greek bail out deal. We have a pretty decent rising 30 min channel, the bottom of which coincides with the daily pivot at 6735ish, so a long here could be worth a go – and can have a family tight stop as if this breaks then the bottom of the 10 day Bianca at 6716 is the most likely next support (we also have the 200ema on 30min here at 6723). Below this we 6690 on the daily chart for support with the 25ema and the bottom of the 10 day Raff. Generally, I feel that we might see a bounce today (famous last words probably) for a push towards 6760. This level is a fairly key resistance level, which if the bulls can break leads towards 6800+. On the last 2 occasions the bulls have failed to break 6766, so if its tested today then 3rd time is more likely to break. I have put a fairly optimistic plan in place for today, with a couple of longs off the key supports, as the movie averages first thing, on both 10min and 30min are bullish, thus favouring longs…. at the moment at least!

57 Comments

    1. That’s exactly what that rise was, bull****.
      The idea that the real market was going to gap up 40 points from Friday’s close to new highs because Greece? was laughable.
      I can see where you’re coming from technically but reading your text I can tell your heart wasn’t in it.
      Next support 6635 I reckon?

        1. Yes mate, now reading blue numbers after rather a long time in the red 🙂
          My VIX long is positive too, so all good at the mo.

          2. Congrats on that.

            I took a short at 61 this morning and reversed at 27 with a 10 stop before leaving for work.

            I was expecting more chop like last friday. Glad I left the stop in there.

          3. Yeah I covered too early as well, but managed to resist the falling knife temptation.
            I don’t think many people were expecting 100 off the opening within an hour.
            It doesn’t have that reversible feel about it either, not like a nervous sell off would, or maybe that’s my bear goggles seeing that.

      2. True. Felt more upside for a bit more manipulation – 6710 broken by the bulls, more China stimulus, bullish ASX all day today, Greece deal. etc etc

  3. Morning All,
    Finally got some real internet issues experienced last week resolved at the w/e – would place a trade – 5 mins later – off it went. Not good right ??
    Managed to Short higher up 6752 to 6730 – errand to run so had minimal time.
    Have we based here 6652-57 ?? Possibly …just waiting to see if how things develop…

  4. “Ex – divs to take around 34 points off FTSE 100 on Aug. 13” …could this bring some bulls back to the table ?

    1. Yes, probably from about 16.10 to about 16.29 🙂
      Excellent, love big divi days, the mad half hour is great fun.

    1. I’m just not getting a positive vibe – and am wondering if it will just be another couple of hours of sideways action..

    2. I don’t know about 90, the 70’s are providing enough resistance atm, if we can’t do 76+ soon, then another look at 55 would seem in order.
      I’m tempted to ignore that nonsense before 08.10 and count this drop from Friday’s close ~6720.
      That makes the bounce to 90 a 50% rt, and this attempt at 75 a 30% rt, which if it fails, measures down to 6635 for me.

        2. Probably technical: commodity price sensitive FTSE stocks are under pressure, energy and mining, because of China.
          The DAX 30 doesn’t have many of them, it’s mainly manufacturing and the German export surplus is at record levels.
          I don’t see why anyone trades the DOW before it opens at 14.30.

  6. Yes tmfp – See your logic..
    Think you’re position maybe on a roll …
    Big Ole Candle on the daily and you tempted to pencil a few more back to 6500.

  12. last week I said 6800 before 6400
    this miners downgrade caused the blip down
    nothing to be worried about

  13. How to trade using the pundits at the financial press
    ——-
    6h ago08:53
    Financial markets react favourably to hopes of a Greek deal
    Financial markets are opening cautiously higher, with the FTSE up 0.5%
    ———
    5h ago09:25

    Miners take the shine off London markets
    So the cautiously positive opening on the London markets hasn’t lasted, with shares now in negative territory. The FTSE 100 is off more than 50 points at 6665 as mining stocks, both in the top index and below the top tier of companies, lose ground on a broker’s downgrade. Broker Investec downgraded several stocks in the sector and lowered its commodity price forecast due to China weakness

  14. Poss pull back for a run up to 6800 & I’m still short 6680, so not so smart, I new I should have took my 15points this morning

    1. I was referring to Pete selling it because it was the high pj, rsi through the roof, a nice easy 10+ points.
      Let’s see if we can drag ourselves back up there again.
      Did you take those longs today, or last week?

      1. ok
        i bought them today
        actually i bought at 6740 early morning after gap up and lost 15 on that
        these buys were after that
        looks like we have opposing views on the market
        whatever crap the pundits are saying, the charts are still very bullish

        1. Ok, I was just interested.
          So, you saw the market open near the highs of the move (so far), then drop 100 points, then you bought?
          That’s a fair shout, buying the dips, although we obviously interpret the charts differently.

          1. the fact is that the charts did signal a dip this morning
            but i got flustered when it went up and then lost the plot altogether
            regrouped in mid morning and now am confident that we are on our way higher

  18. tmfp
    as a matter of interest how long have you been holding those shorts of yours?
    or have you taken profits already?

    1. Lol what profits would they be?
      Still hanging in there, about 60 pts underwater on average atm.

      1. tmfp says:
        August 10, 2015 at 9:28 am

        Yeah I covered too early as well, but managed to resist the falling knife temptation.

        1. Don’t quite understand the relevance….?
          I shorted at the opening but covered too early and only took 26 pts. dc said he did similar but also went long at 27 and got stopped out, I said I managed to avoid the same thing.
          That was just a day trade, my shorts are from last week.

  20. Despite today, Dow looks to me to be listing. EMA_200 has a negative gradient, and descending peaks are there to behold! (Looking at 4hrs and daily.) The Fed is probably delving deeply today. On the FTSE front, let’s just say that I am not buying shares at this time. 😀

  21. That was an interesting day, wasn’t it?
    100 down out of the blue and then got most of it back, partly helped by the DOW which seems to be on a mission for some reason today.
    Wonder where it will close?

    Catch you tmrw.
    🙂

  23. What a day! looks like strong uptrend now in place. Spx could see 2114 and 800 on the Dow.
    that should coincide with 800 on dax and 800 ish on ftse before the downtrend starts again (hopefully)

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