Support 6898, 6896, 6876, 6835 Resistance 6914, 6940, 6962, 6982, 6996

Good morning. Well after a few sessions we got some bearish movement and one of those frustrating trending days where the stops always seem to get hit on the trade, so the 6936 long got stopped out. Bulls didn’t put up much of a fight yesterday, even with it being bull Tuesday soap breakout to the downside could be the start of the dip, especially so if we break below yesterdays low of 6876. However, the lowest support on the S&P I had for yesterday held well, being 2098 – even getting a rise to 2108, though the FTSE didn’t really follow that sort of rise, only hitting 6908 from the low. The divi today is 14.46 so we could see some divi hunters buying up the FTSE at the bell, as thats quite a decent amount.

US & Asia Overnight from Bloomberg
(Bloomberg) — Asian stocks fell from a six-month high, tracking declines in European and U.S. equities, as telecom companies led losses. Japan’s Topix index retreated from its highest since 2007 as the yen held gains against the dollar.

The MSCI Asia Pacific Index slid 0.3 percent to 146.10 as of 9:01 a.m. in Tokyo after closing yesterday at its highest since Sept. 10. The measure gained for four straight weeks in February to post its biggest monthly advance since September 2013. It traded yesterday at 14.6 times the estimated earnings of its constituent companies, the highest in almost two years.

“The lack of fresh sparks has prompted investors to take profits and wait for new signals,” said Matthew Sherwood, the Sydney-based head of investment markets research at Perpetual Ltd., which manages about $21 billion. The market “is starting to show signs of fatigue and is now lacking momentum as earnings downgrades begin to overpower the impact of increased monetary stimulus and an improving U.S. economy.”

Japan’s Topix index lost 0.6 percent as the yen traded at 119.61 per dollar after rising 0.3 percent yesterday. South Korea’s Kospi index was little changed, and Australia’s S&P/ASX 200 Index slid 0.2 percent. New Zealand’s NZX 50 Index fell 0.3 percent.

Markets in Hong Kong and China are yet to open. Futures for Hong Kong’s Hang Seng China Enterprises Index slipped 0.2 percent and contracts traded in Singapore on the FTSE China A50 Index lost 0.3 percent in most recent trading. Alibaba Group Holding Ltd. sank 2.9 percent in New York to its lowest level since its September debut as better-than-projected earnings by competitor JD.com fueled concern Alibaba’s growth may be slowing.

China Unicom (Hong Kong) Ltd., the nation’s second-largest wireless carrier, fell the most in 16 months in New York, leading a retreat in Chinese mobile phone companies, after reporting 2014 earnings that fell short of estimates.

The Shanghai Composite and the Hang Seng China Enterprises Index of mainland stocks listed in Hong Kong slipped 2.2 percent yesterday. China’s government may set a growth target of around 7 percent for this year, the Xinhua News Agency reported, compared with the 7.5 percent target in 2014. The National People’s Congress starts on Thursday.[Ref]

FTSE Outlook

FTSE 100 Prediction
FTSE 100 Prediction

Todays pivot is 6914 so there is initial resistance there, with 6940 above that. We have both the Bianca channels showing support at 6898 first thing, pretty much were we are as I write this, and having bounce off the 25ema on the daily at 6874 yesterday, we could get an initial rise, certainly to the pivot, if not slightly higher. If the 6875 level breaks today then we are likely to dip down towards the daily coral line currently at 6810, though there is some support at 6830 first. Resistance wise, above the 6914 pivot is 6940, then 6962 (most recent high), then the top of the Bianca channels at 6982 and 6996. After the punch on the nose the bulls got yesterday and with most people feeling a little reluctant to pile into massive longs while we are so high, the bias is probably with the bears still, so shorting off the resistance areas, especially 6940 if seen, could be a good play for today. As mentioned above there is a 14 point divi to be applied later (some platforms apply it at 16:30, others at 9pm) so we may well see some buying going into the close.

110 Comments

  1. 18216 held nicely, if I plucked up the courage to take short off 18216 stop would have been 18255 for overnight. Which means I needed 18138 to reach 2:1. And what a coincidence, it’s there now.

  2. Hi all,

    Please could someone tell me how the dividends work? I did ask my broker but they don’t seem to want to explain about it or how the swaps are charged.

    Many thanks,

    Martin

    2. If you have a FTSE position open then the divi will effect you. Basically if you are long on the FTSE, you get divi multiplied by your stake credited to your account (but the FTSE price will actually drop by the same amount so you end up pretty much flat). If you are short on the FTSE you get divi multiplied by stake deducted from your account, but as the FTSE price drops you again end up pretty much flat.

  3. Hi all,

    Just a quick bit of advice. I have been doing this as a bit of hobby for a few months, so by no means an expert.

    Essentially, I went long on the FTSE at about 6960 after being drawn in by a glut of articles predicting we were on the verge of 7000. This latest drop off has left me very much in the hole.

    Would the general consensus be to hold the position, or cut my losses and start over? I haven’t got any more money to sink into it to double down as I was playing with a small amount to start with.

    I don’t mind holding the position and riding the storm but if people are of the opinion that 7000 is completely unrealistic I might just close and start again.

    Any advice would be much appreciated.

    Cheers everyone

    1. I know it doesn’t help you now, but when everyones bullish like that, you need to be the opposite! Also, we had a load of agro in the comments in here at the end of Feb – usually a good sign when it all kicks off like that that on forums and bulletin boards the sentiment is about to change.

    2. Seems like you need to look at your risk/ reward ratio. You were hoping for a rise to 7000 from 6960 which is 40 points, however, you’re going to let the FTSE drop to 6800. So you’re risking 160 points to make 40! If you’re £2 a point that’s £320 down on a ‘hobby’. I’d always recommend stops, an entry and exit strategy and a decent risk/reward ratio. Let us know how you get on.

      1. When I only started trading a few years ago I took position on the very peak of the price for it to continue cos I said – I had enough, it doesn’t go my way, and it turned just on the spot and went 150 points to the opposite direction. It was FTSE, I closed a loss or my balance came to 0, cannot remember, it was £1 pp. But I remember that lesson.

  4. My view is that it will get back there but it depends how low you could afford it to go before you stop out. If you do start again lower your leverage 🙂

    2. Cheers guys!

      I can probably ride it to about 6800 without getting really twitchy.

      I’ve certainly learned my lesson with regards to my leverage, I just got greedy after a good few months.

      Do people think we are looking at 7000 in the next week, month or few months? I would be very concerned about holding anything over the election period….

      Cheers again

  6. Agree with Nick, with so many people buying the dip, a decent bet would be to trade the opposite direction. There seems to be an influx of buyers in the market, yesterday and Monday shorters were at 20-25% now its @30-35%.
    Vice versa the market was going up when there were 75% bears. But with NFP, FED, this week amongst others expect some volatility, some I suggest bigger margins.
    GL all.

      1. ‘If’ this carries on its downward trend for the day then 6800-20 is not out of the question. I’d need to start seeing some higher highs on the 15 minute candles to be persuaded otherwise. Only the dead cat bounce at 8.15-8.30 has so far made a higher candle. Looking for a possible bounce into the close from 15.30 onwards, though even on large divi days these are not guaranteed when the trend is down.

        1. You`re right on divi days not always going right. But I think that this week with ECB, Draghi, FED, NFP, you`d be brave to go ALL out bear. But I don`t intend on backing out until DAX breaks that 11000 mark at least.

          1. I agree – it’s just a question a question of spotting where the BTFD-ers are sitting! Have burnt my fingers going long too early on a Wednesday too many times so I’d rather see some confirmation first. Having said that if we do get to 6810, I will probably press ‘buy’ and see what happens.

    2. Nick correct me if am wrong, 20day raff channel at 6862, if yes, might hold (untill US open atleast)

  8. so if im long in hind sight am i better keeping till close for dividends?? not really understanding this dividend thing?? some help would be greatly appreciated

    1. If you have £1pp on ftse long and if the dividend was 3.4. You would get £3.40 credited to your account. But if you opened your position and it drops before the close and you end up with -£10.00 you have to consider if it was worth it. Vice versa If it goes up 10 pips after your opened your position and you are long they you are up £13.40. But I`m still hazy on what time they pay it out.

    2. You don’t really trade the dividend rather you trade the expected rise from there being a dividend. If you just traded the dividend you would end up even. For example, if you’re long when the divi is paid you’ll have £10 credited to your account and £10 worth of points knocked off your position, leaving you back where you started.

  11. So what do people think the chances are of me seeing a profit on a long at 6960? in the next week or so? Or should I just bury my head in the sand and not think about it for a few weeks? haha

    1. Not sure there is much hope. Looking at the daily chart it has been contracting for some time just waiting for a big move in either direction and this looks like it.

  13. Ftsewhoopsie
    I took an £800 loss yesterday after a 16 point stop got hit. It made a smallish hole in some carefully accumulated profits. But you just have to use stops

  14. MillenDollar says:
    February 27, 2015 at 2:24 pm
    Im not enjoying today, still got FTSE shorts from last week!

    1. That was when all the talk of 7k was going on. I think I caught that at a very small profit on the way back down. That was Argyle’s comments that stopped me closing it at a nasty loss

  19. Hysterical Dow seems to have bottomed, for the moment, @ ≈ 18040. Difficult to gauge the likely depth of the pullback — 18000 / 17800 / 17600? It will take more than ≈ -200 pts. to budge growth fundamentals. 😀

      1. It’ll keep going all the way through to 6960 towards 6982 of course, and make me a much happier man 🙂

        or stop about now and drop like a rock

        second is probably more likely 🙂

      2. We have local min. around 6860/FTSE, 4870/CAC, 11235/DAX and 18060/Dow. If the latter do not hold, the pullback will develop; intensify. Suspicion that the CAC and DAX might part company with the Dow, which does its own thing!

  22. Nick — My perfectly civil reply to Senu has been rejected by your new censoring software … … …

  27. short dax 11400, stop loss 11450 at £10 a point
    short ftse 100 at 6926, stop loss at 6960 at £10 a point

  30. Wasn’t going to post again, but as I see my name being abused on a daily basis, I thought I would let you know I closed my short from 6919 for £100 a point this morning at 6868. I will let the more intelligent work out the profit. As for some of the self acclaimed experts on this forum, a simple bit of advice, don’t listen to a word they say, they will lose you money.

    1. congrats. max i can risk right now is £10 a point. hopefully someday i’ll be able to risk £100 a point. then i’ll be happy with just making 10 points a day.

      1. Neptune. I only trade short when markets are top. It’s always a safe trade providing you have funds to support and the patience of a saint. Also only on the FTSE

    3. 57 points above 919 and apparent profit 51 points. Less than 1:1. How accurate all the sounds, I could do that too if I look at the chart now. I can say where I WOULD HAVE COME OUT. But if it didn’t lower below 919 we probably wouldn’t have heard from you again. You just making some point here which is not needed.

  34. Well you might not be everyone’s cup of tea Argyle, but I’ll hand it to you on a good trade.

    Been quite enjoying the last few weeks on here. Entertaining and informative ( most of the time). Will say I have learnt from many on here and hope to do so in the future.

  36. Quote from today’s Daily Mail

    Top fund bosses are selling shares. Should you?

    You have been warned. Ignore the Bulls on here, they play with charts and graphs, bit they do not understand politics, sentiment and history.

  38. Good luck, are you expecting it to drop first thing for a particular reason. Or is it another hold till comes good. ?

    1. Will drop overnight because of the dividend, however I will be charged for that. No strategy is same again. This market at this time with 9 weeks to an election cannot go much higher but will go much lower. May have to wait a day or a week but wouldn’t be surprised to see it well below 6900 in the very near future. Nick has alluded to this in recent days. Other markets ie Dax may have some upwards movements but FTSE is at the top till the election is decided. Will take profit at as a yet undecided time and level.

  39. Surely one news article doesn’t direct your decisions, I take it your looking at the bigger picture and believe as you mentioned above the FTSE is set to tumble.

    1. Coomsby. The paper article was quoted as a warning to the Bulls on here, who have mysteriously disappeared in the last couple of days. They seem to think the market is on an ever ending trajectory to 7000 plus in the next few days. Everyone is entitled to their own opinion and I am giving mine which is supported in the article.

  40. Thinking about it, it’s already set new high’s and why should it continue to 7000 plus. 7000 is a human mind preference, a level which we all believe would show significance. But cant imagine what exact set events would have to be in place to push it beyond the elusive 7000.

  41. Coomsby. In my opinion a short from this level is a 100% safe trade, providing you have funds that can support a modest rise. Then with a bit of patience the ATM will be paying out again.

  42. Ftse got pushed by the European markets today…. Until such time as the Dax ease off its unbelievable bull run then I can see the ftse being drag up with it… Markets are just so munipliate by the big american hedge funds these days no level playing fields… But this is a warning big hedge funds are starting to pass on too retail investor and they are holding more cash which is more of a sign that there is going too be a move down in March maybe this will only hit the American markets.

  43. Must say Argyle knows his stuff. Will be taking his comments on board and follow what he says.

  45. Argyle, I get what you say and agree. Love that saying, “the ATM will payout”. Lol

    1. A nice spike in the Dax tomorrow 11526……lol if so im back in for another short as closed my previous be

  47. It’s great isn’t it. Some people talk about points gained, others talk of resistance levels, stops etc. I just think of the ATM and make near on safe trades that result in The ATM needing extra funding to supply me when I take the profit.

    1. I have noticed, Argyle, that you spell people’s names wrong. I take it as tongue in cheek gesture. You are fast becoming a bit of a legend. Did you enter the trade tonight. If so, keep us updated on your thoughts and position.

  48. Darren what can Dragia say everything been said we know QE will be 60 billion….

    1. I dont really think it matters what he says. Ig 75% short is not a good sign for shorters. But the algos will play on every word. Thus i expect a spike. ..imo

  49. With the Euro being smashed again, I would expect a delay or reduction to stabilise the Euro.

  50. Darren don’t fall into the trap that cause there is lots of shorter on ig the markets don’t go down ig percentage of the market is tiny not even 1% also I see it drop when there was 81% short at 10150 alway down to 8350 last October.

  51. I’m glad that Argyle is back. If Argyle was a BULL over the past week or so, he would have been loved instead of picked on!

  52. German factory take a major nice dive in January and the market rallies so bad news is now good news again

Comments are closed.