Support 6818, resistance 6865, 6900

Good morning. 6840 didn’t hold for too long yesterday though the 6820 was better as it bounced back 20 points. There is a real battle going on between bears and bulls at the moment and this choppiness isn’t ideal – most are waiting for the ECB on Thursday and NFP on Friday which will see some bigger movements, as the range on the FTSE was still relatively small. The S&P held its support at 1918, though failed to break 1925 for a push to 1930. We will probably get more of the same on the FTSE today, though for the bulls we are on the bottom of the 10 day Raff and the 25EMA on daily at 6822… will they hold that level?

Asia Overnight from Bloomberg
Asian stocks fell, with regional benchmark index retreating from a seven-month high, as investors await a report on U.S. jobs and a decision from the European Central Bank on monetary policy.

The MSCI Asia Pacific Index (MXAP) slid 0.2 percent to 142.78 as of 12:29 p.m. in Hong Kong nine of the 10 industry groups on the measure retreated. A private survey on the U.S. labor market is due today, while investors are assessing European inflation data to gauge if the ECB will announce an interest-rate cut tomorrow.

“With U.S. economic data starting to ramp up, some investors feel this warrants a bit of caution,” Stan Shamu, a markets strategist in Melbourne at IG Ltd., said by e-mail. “At the same time, we have the European situation where traders just continue to speculate what action the ECB will take this week.”

Japan’s Topix index gained 0.3 percent. Australia’s S&P/ASX 200 Index slipped 0.3 percent as a report showed gross domestic product rose 1.1 percent from the previous quarter, beating economist forecasts. New Zealand’s NZX 50 Index (NZSE50FG) was little changed. South Korea’s market is closed for a holiday.

Hong Kong’s Hang Seng Index and the Hang Seng China Enterprises Index of mainland shares traded in the city both lost 0.6 percent. Taiwan’s Taiex Index added 0.1 percent and Singapore’s Straits Times Index declined 0.4 percent. Thailand’s SET Index was little changed and India’s BSE S&P Sensex Index slid 0.1 percent.

Europe Inflation
Euro-area inflation slowed more than economists projected in May. ECB President Mario Draghi has signaled he will act to prevent deflation in the 18-nation bloc. Of 50 economists surveyed by Bloomberg, 44 predict the ECB will become the first major central bank to take interest rates negative by cutting its deposit rate. All but two of 58 respondents said the benchmark rate would also be reduced.

Today’s ADP National Employment report in the U.S. is expected to show an increase of 210,000 workers for May after recording a gain of 220,000 in April, a Bloomberg survey of economists showed.

Futures on the Standard & Poor’s 500 Index lost less than 0.1 percent today after the U.S. gauge closed little changed, near a record high.

FTSE Outlook

FTSE 100 Prediction
FTSE 100 Prediction

The 6820 lower level held ok and today that also seeing the 25EMA and the bottom of the 10 day Raff at that level too. If the bears were to break that then 6800 and 6785 are likely next supports. Todays pivot is 6839 so likely to be initial resistance (below pivot says bearish bias, above daily pivot bullish bias, generally speaking). If it can get above the pivot and the 6845 level then 6865 and possibly 6890 beckon. Longs around 6820 could be good but I think that we might well see another fairly small range day. All that said, I am preferring shorts off the resistances so look to short the rallies to those levels, assuming we get some!

59 Comments

  10. From cob 1st May the FTSE has risen a mighty 5 points! Would have thought ideal conditions for range bound day trading.
    For those of us trading over longer timeframes a bit dull but at least not damaging to the pocket or nerves.
    Thursday and Friday should provide greater volatility and give some direction heading into the low volume summer months.

    1. Thanks Javed so do you currently have a position or in light of that are you waiting on the sidelines?

      1. I’m short at 6780 from the end of April. Been a dull ride which is not always a bad thing. From my perspective looking for some larger moves down this week through to the end of July. Initial target is 6650 – 6700.

          1. A very wide one…..haha…..I trade on CMC…..don’t have to identify a stop loss at trade execution . I currently have approximately £1,100 for each contract. So effectively 1,100 points stop loss but of course I do not want to lose everything!

  11. I wouldn’t say that this could break 6800 today but I suppose anything could happen. Holding my longs now in profit from 6823 and 6811. Tempted to close but holding my serve. I hope I don’t regret it. DAX back up to 9800 so looking positive.

  16. Also that 80% short on the indices according to IG is the only thing stopping me from adding any more shorts. I’m supposed to be a day trader yet I have made a 8 trades in 2 months lol, a record for me :/

  17. Well, social sentiment on DOW is 70% bullish! usually a sign to short.
    Still holding all my shorts, waiting for this to break support, just hope that’s today…

  18. 6840 is possible, just see what the US does on open. They have been very strong on open every day so far and around 6 or 7pm our time.

  19. That’s if we see 6840 again…lower highs. Lower lows = dun dun duuun , drop , hopefully. But market this much has conditioned me to believe that a 1-2% drop is a breather before highs lol.

    1. im in profit but still short, feel like there is more to be had here, overnight drop before tomorrow?

  24. Looks like US still holding, that ftse wants to drop or probably people selling in anticipation of EU. Thurs, Friday should be interesting

  25. Personally looking for 6840-50 area which might see tomorrow for a shorting area. Sell the rallies. Gd day all.

  31. Strong finish…..was looking for a close below 6796 which would have been the lowest for a month. Bring on tomorrow! Finally get some volatility I’m sure…..but only time will tell whether it’s welcome or not for me personally……

  32. im in profit but still short, feel like there is more to be had here, overnight drop before tomorrow?

  33. What a great day for traders. Sold my DAX short this morning and re entered on the recent pop back. Too early so down a few points. Averaged up on my S&P short but looking horrible. Dow looks like it’s had enough though….

  35. Ravi calm before the storm. I have a horrible feeling about the ECB tomorrow. S&P hurting! Darkest before the dawn…

  36. above 1940 is short for me. Looking at least 10 points the way down. But my target is 1905

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