Support 6867, 6859, 6831, 6819 Resistance 6910, 6933, 6939

Good morning. The main news yesterday was that Germany proved it wasn’t going to be dictated to and rejected the Greek bailout offer they made. As per usual I imagine it will go down to the wire, with crunch talks today, and Greece vowing to reject any further demands for austerity. “While there is mounting irritation in EU circles over Germany’s refusal to give ground, and signs of a Franco-German rift are emerging, the Greeks are on thin ice.” [Ref]. The bulls failed to break the 6920 resistance, though the 6970, despite an early dip, managed to hold as support. Everyone still keeping their powder dry really.

US & Asia Overnight from Bloomberg
(Bloomberg) — Japanese stocks extended their surge, with the Nikkei 225 Stock Average at a 15-year high, while Australian bonds dropped. Oil held losses as record U.S. supplies reinforced concern over a glut, and gold rallied.

The Nikkei 225 added 0.5 percent by 9:56 a.m. in Tokyo, while the broader Topix index climbed to its highest level since 2007 and headed for a fifth straight weekly gain. U.S. index futures were little changed after the Nasdaq Composite Index capped its longest rally in a year, while Australian stocks fell. Gold rose 0.2 percent to pare a weekly drop, and silver climbed 0.5 percent. Ten-year Australian bond yields advanced three basis points after U.S. Treasuries retreated. Oil in New York was headed for its first weekly decline in a month.

Record stimulus from the Bank of Japan is helping drive local stocks, with officials reiterating their monetary-policy stance this week. Markets in most of Asia remained closed for Lunar New Year holidays Friday, with investors looking to a meeting of finance ministers in Brussels for progress on Greece’s bailout negotiations. Manufacturing data for Japan to Europe and the U.S. is also due. American crude supplies rose a sixth week, extending a record high, a report Thursday showed.

“The Bank of Japan and GPIF have been the biggest drivers in pushing up stocks when they fell,” Masayuki Doshida, a senior market analyst at the Rakuten Economic Research Institute in Tokyo, said by phone, referring to the central bank and Japan’s public-sector pension fund. “The main scenario for Greece is that in the end it’ll be able to receive a concession. The market’s beginning to stop reacting to news on Greece ahead of a final agreement.”

Topix Gains
The Topix rose 0.4 percent in a fifth day of gains, its longest rally this year. A Markit Economics/ JMMA gauge of Japanese manufacturing due Friday is projected to show slight improvement.

Australia’s S&P/ASX 200 Index fell 0.3 percent, trimming its fifth straight weekly advance to 0.1 percent, the longest run of gains since April. Energy stocks led declines amid the drop in oil and after Santos Ltd., the country’s third-largest oil and gas producer, posted a loss for 2014 after the drop in crude prices forced it to write down the value of assets. Shares slipped 3.2 percent, the most in more than a month.

Telstra Corp., Australia’s largest phone company, fell 0.5 percent after saying that its chief financial officer would take over from Chief Executive Officer David Thodey.

The NZX 50 Index rose 0.5 percent in Wellington, its first day of gains this week. The measure is set for a 0.6 percent weekly decline, the second-worst performance after Greece’s ASE Index among 24 developed markets tracked by Bloomberg. The ASE has slumped 4.2 percent, with talks between Greece and its creditors breaking down earlier in the week.

Greek Outlook
The Stoxx Europe 600 Index added 0.3 percent Thursday, extending its highest close since November 2007.

The index swung around in European trade, rising as much as 0.4 percent after the European Commission said Greece’s request for an extension of loan facilities could pave the way for compromise. Stocks then pared gains on news Germany had rejected the plan, before rising again as a German official, who asked not to be named because the talks are private, said his government regarded a Greek proposal as a basis for negotiations.

U.S. Data
In the U.S., the Bloomberg Consumer Comfort Index’s monthly economic expectations gauge rose by 1 point to 54 in February, data Thursday in the U.S. showed, its highest level since January 2011. The Conference Board’s index of leading economic indicators, a measure of the outlook for the next three to six months, climbed less than forecast in January. A separate report indicated fewer Americans than forecast filed for jobless claims last week.

The mixed data came a day after minutes of the Federal Reserve’s January meeting signaled an inclination for officials to keep rates on hold “for a longer time” given the strong dollar and uncertainty over Greece and Ukraine.

While investors pushed back bets on when the Fed would raise interest rates, they’re still showing confidence an increase is possible by year-end. Fed fund futures traded on the CME Group Inc. exchange gave a 19 percent chance the central bank will raise rates at its policy meeting in June. They showed 77 percent odds of an increase by December.

West Texas Intermediate crude added 0.5 percent to $51.41 a barrel after sliding more than 4 percent the previous two days. WTI is down 2.6 percent this week, its first decline since losing 6.4 percent in the week to Jan. 23.

Oil Stockpiles
Crude supplies in the U.S., the world’s No. 1 oil consumer, increased by 7.72 million barrels to 425.6 million last week, the most in records compiled since August 1982 by the Energy Information Administration. The American Petroleum Institute reported stockpiles rose by 14.3 million barrels. Analysts surveyed by Bloomberg had predicted a median increase of 3 million barrels.

The highest U.S. crude production in three decades helped trigger a global glut that pushed oil prices almost 50 percent lower in 2014. Energy explorers are paring drilling rates and investments in response to the slump. Marathon Oil Corp. said Wednesday that it will cut an additional 20 percent from its spending plan for this year.

Gold climbed to $1,209.08 an ounce in the spot market, after retreating 0.5 percent on Thursday. The precious metal, often viewed as a store of value and haven investment, has lost 1.7 percent this week, on track for its fourth straight weekly loss and the longest slump since September 2013. Silver rose to $16.4595 an ounce.[Ref]

FTSE Outlook

FTSE 100 Prediction
FTSE 100 Prediction

Quite a narrow band on the 10 day Bianca now, with support at 6859 and resistance at 6933. Bulls will need to break 6910 first though, then that level should be achievable. Crunch talks, coupled with a Friday could make for an interesting session – hold over the weekend and hope for positive news, or close out and not have to worry which way it goes……

Support from the pivot initially at 6885, with 6865 below that, then 6659 for the Bianca 10 day. If that breaks then the 20 day at 6819 is worth a long. So, narrow range really in the absence of any news of note with 6959 and 6910 being the first levels of note to trade off. Despite Germany’s reaction yesterday prices have held up pretty well, though it won’t take much to derail the bulls. I expect a V shaped day today, with stutters around 6933/6939 if we get that high.

118 Comments

  1. Morning All, Been a while since here…been on Nicks special forum to learn more…anyway hope trading going well for everyone. Stay safe today…GLA

  3. Wow, it looks more modern. Couldn’t find Home button at first but found it fast. It just needs to get used to. No problems.

  4. I think it’s going to tread water until the afternoon when the outcome of the Greece meeting is known. Like Nick says, I’m not sure I would want to hold any positions over the weekend.

    2. Options expiry – every third Friday of the Month between 10.10 – 10.20am. It doesn’t always spike like this but volatility rises in these 10 minutes.

        1. You’re welcome Senu. Just remember it can spike down at Opex as well – the direction is hard to tell. Shorting or going long at the extremes usually works for a few points.

    1. Yeah, same here at 09 and 13 on the way back up, just taken half out at 05. The only thing I would say mate, is that means you could get stopped out at 20 which would be a double top if it doesn’t break. GL 🙂

      2. Just for interest, did you went long in the morning at pivot? I thought to go but avoided because of travelling.

        1. I’m not a great believer in pivots.
          The only long I’ve had this morning was @ 86 when I covered my short from the 20 blip then took that out when I went short at 09.
          Going to stop this little short at 18 should it get there, might turn it around into a long for another go at 20+, or else a slow decline to ~ 6900 before US opening..

          LOL, best laid plans of mice and men…..

          2. Blatant bit of stop hunting there, or someone’s got a new trading algo lol.
            Never leave your stops on the platform, I learnt that the hard way.
            Looks like 6900 is still on before lunch.

  9. Dow/10 mins. — SMA 100 just turned up and gradient of SMA 20 positive also. Stochastic has crossed the 80 line. Return to ≈ 18050 likely I think.

  19. No stops Darren and add at 11100 so am too blow my account dax would have too hit 22000 plus am now in a little profit

  28. Appears Greek exit from Euro is likely, according to news reports. Apparently Italy, Spain and Cyprus have asked for loosening of controls if Greece gets its way. Germany dictates ECB policy so departure is now only option.

  29. 4m ago
    Malta: Germany is ready to let Greece go

    The Maltese finance minister says countries led by Germany are prepared to see Greece leave the eurozone.

  30. The European Central Bank is making preparations again for a Greek exit from the euro, according to the German news magazine Der Spiegel.

    “I think they’ve now reached a point where they will tell Greece ‘if you really want to leave, leave,'” finance minister Edward Scicluna told MaltaToday.

  33. Dax is where it started how many accounts got pop today on that spike… Hedge funds playing God again.

        1. If anyone got stopped out of longs you’d have a strong argument for positions to be reinstated because of the bad tick. Conversely you can bet they’ll be disallowing any shorts that had limits on them.

  36. Finally I am out of my 17905 short on the dow, phew! If it continues to fall then I’ll be a bit gutted but after being so much in the red, netting off at zero is ok!

  40. well the week is nearly over the Dax, Ftse or the world has not crumbled under the pressure from the Bears on here?? Just goes to show everyone whether Bull or Bear can make money in all markets. Its not about the news or peoples views, its about where you enter the market and the edge you get from doing it there!!

    1. Argyle — Would you mind saying what timeframe, and what the basis of the signal is; e.g. MACD, Stochastic, or whatever?

  43. I’m not planning a trade, but I still have a minimum stop distance of 150 on the FTSE market on IG (and 100 on DOW). Last time I mentioned this, it seemed no-one else has that. Why might they do this?

    1. I’m with IG. Seems you are being picked for special treatment by our trusted partner in volatile times. You must be hurting them Si! 😀

      1. When I first started in 2008, I had a call from them (after a few wins) inviting me out for lunch to find out what I was “hoping to achieve”. Very odd I thought, I never called them back.

          3. You should change a provider. Never heard anything more ridiculous than that. 150-200 points slop loss is no stop loss at all.

    2. As I said last time Si, that’s a guaranteed stop. Untick the “Guaranteed Stop” box and it will come down to 4..

  45. The Northern Hordes; Germany, Netherlands, etc., will feel, ultimately, that they owe a debt to Greece for their current condition. Relegation to outer darkness is not an option. The bears will be frustrated massively yet again.

    1. Been there, done that, dusted. Do I want it again, no. For me £2 a point once nearly killed me, there’s nothing to say about £20, you must have got a lot of money to lose.

    2. Expected volatility increase. If something happens outside trading times, they don’t get caught out by a meltdown.
      If it’s IG you’re using, you’ll notice their margin requirements for large punters have also increased since their £25m CHF losses. FTSE: 23 £pip under £1500, 690 £pip over £3k!

    1. Lol, doesn’t count unless it’s between 0800-1630 Monday-Friday. What relevance does a bit of out of hours CFD platform trading have to the real world?
      Good Weekend to you all………………next week, 7000 or 6500?

  49. Mneh Greece deal reached, means nothing, Dow on its way down and so is the FTSE after touching the tip of 7000, then all the way down to 6600

  50. I soppose its stop catching time now from spreadbet companies, as i imagine there arn’t that many rules after 4.30 on a friday?…. Only just managed to catch up with the news for the week, i didn’t realise that those fighter jets whizzing over my head in the week were to chase off a russian bomber!!, and there’s me thinking recently how dull this place is… Just goes to show how anything can happen at anytime! (ftse included)

  51. I have spun my lucky wheel and FTSE will open at 6925 Monday and then by next Friday be below 6700. No record level till end of March.

  52. Morning Jack, about 5 years now full time. Realised my spin the wheel technique was a winner and £500k later I’m still living the high life. Nick Leeson is my hero.

      1. Who knows. But looks like your spin didn’t win this time, you landed a short, you said.
        Are you really using a wheel? Interesting purchase.

  54. Yes mrbenson it was a joke. Let me introduce myself. I worked on the floor of the Sydney stock exchange 1992-99 and since have returned to the UK and have recently ended a 13 year engagement with an investment bank in London. I do trade but just for fun.
    My analysis of the current situation is that markets are overbought, however whilst intervention continues and as there is little other investment opportunities the bull run will continue.
    The FTSE is slightly different and with election uncertainty and a likely rate rise June2015 I can see FTSE

    1. I can see FTSE trading between 6300 -7000 during this calendar year. Depending on the shape of the government will depend at which end it trades.
      In the coming week now that the international holidays are over, I can only see downside from this low volume inflated position. Talking yesterday to an old colleague, his consideration is FTSE sub 6750 by week ending, with more downside till after election.

      1. But still you placed a short on Dow at 17.40 you wrote the price was 18018. Now it’s -112 for you on Sunday, it looks like it was a losing trade or a trade without a stop. It may turn down or may not turn down but it’s still a losing 100 points trade to me. Not sure what’s your system.

  55. Should have written FTSE not Dow,Jack and is currently 30 points adrift, however sold another at 6960 which is 10 points to the good. So to even the books I need FTSE to 6943. I can assure you Jackie boy by 9.00am Monday I will be in considerable positive territory. In 165 trades ( sometimes aggregated trades) I have never been on the losing side. I specialise in shorting when markets are near tops. I have never gone long or intend to. Fortunately having near enough unlimited funds I can sit on any trades and indeed once had to wait 2 weeks to get back positive. Remember Jackie boy when the markets are high , if you short, even if it carries on up, the market comes back to you.

    1. At least you didn’t short Dow. This strategy doesn’t work on Dow, trust me. I tried, it’s rock solid that price there. They don’t give a change. Check out, the time you entered on FTSE, Dow was 18018 approx. now it’s 9.35 and it’s 18095. 77 points loss would have been sitting now and ready to drift up and up and up.
      It does seem to work on FTSE so good luck.

  56. FTSE — Broke through 6900 again last Tuesday, getting within ≈ 50 points of 7000 by end Friday. 7000 is not such a big deal now. Possibly some pullback in the first half of this week as markets question the basis of celebration. Tspiras blinked first and is now left with the need for a difficult sales pitch to his electorate. But, with the usual caveats, especially vis-à-vis Putin’s ambitions and paranoia, growth fundamentals seem secure and the current, rising, 4 hr. channel is likely to hold in the short term.
    Next month a river of cash starts flowing from the ECB by electronic transfer to the coffers of eurozone banks and other financial institutions at the rate of €60bn per month — a projected €1.1 trillion by September 2016 — that’s about 10% of annual eurozone GDP. Predictably, as interest rates stagnate, much of this will be diverted to share- and commodity-price speculation. Bears beware!
    http://i1348.photobucket.com/albums/p736/jmca01/FTSE100DFB_zpsa77a9ec0.png

  58. hmmm…I mentioned earlier in the day that spike to 11150 on the dax was a omen. where is that going to go when it opens Monday morning…higher or down?

  60. I wouldn’t worry Darren. Monday will see a decline as will all indice. Next mover upper as they say on the floor is Yellen on Wednesday. Till then down they will go. No use for Dax but RBS looking at big fall on Monday, can see FTSE sub 6830 by Wednesday lunch. Then it’s over to Yellen to set the tune for rest of week.

    I predict Friday evening

    Dow 17700
    Dax 10900
    FTSE 6750

Comments are closed.