Support 6901, 6888, 6860, 6831, 6805 Resistance 6935, 6947, 6963, 6975, 6999

Good morning. Not been the best of starts really for March, just when it looks like its going to get bearish, breaking 6880 yesterday, and looking like it will dip lower, it found decent support on the 10 day Raff at 6860 and bounce back above 6900, where it has remained overnight. The opening climb failed to reach the pivot at 6914, instead stalling at 6910. The S&P fared better off the 2088 support, bouncing back to 2100ish. So still some bulls around. The main thing for today is the ECB press conference at 13:30 where Draghi will unveil specifics for the bond buying program, and we also have, at midday, the UK rate decision.

US & Asia Overnight from Bloomberg
(Bloomberg) — The euro traded at an 11-year low and gold advanced as investors await details of the European Central Bank’s bond-buying program. Chinese shares retreated as Asia’s biggest economy confirmed its weakest growth target in more than 15 years.

The 19-nation euro fell 0.4 percent to $1.1034 by 3:17 p.m. in Tokyo, its lowest level since September 2003. The Bloomberg Dollar Spot Index rose while gold climbed 0.3 percent. Benchmark gauges in Hong Kong and Shanghai dropped at least 1.1 percent, dragging the MSCI Asia Pacific Index down 0.2 percent. Standard & Poor’s 500 Index futures were little changed. Oil in New York traded above $50 a barrel.

With ECB chief Mario Draghi set to unveil specifics of the bank’s 1.1 trillion euro ($1.2 trillion) stimulus plan, Goldman Sachs Group Inc. is forecasting euro parity with the dollar next year. The ECB has already cut deposit rates to below zero. China’s 7 percent 2015 economic growth target underscores a shift away from expansion at all costs as the government seeks to clean up the nation’s environment, reduce graft and control a debt surge.

“The combination of deposit rates negative and QE is a very potent one, so it’s very euro negative,” Robin Brooks, chief currency strategist at Goldman Sachs, said in an interview in Sydney. “We have in our forecasts a very pronounced euro downswing, which is probably the most dollar-bullish forecast in all of our forecasts. We have the euro going to parity by the end of next year and then through parity to 0.9 by the end of 2017.”

Outlooks Diverge
Gold for immediate delivery traded at $1,204.03 an ounce. The euro held declines against most major peers as the ECB prepares to buy 60 billion euros of assets a month to counter slowing growth and the threat of deflation.

Services growth in the euro area fell short of analysts’ estimates last month, in contrast to strong U.S. data, reports showed yesterday. Factory orders numbers from Germany and the U.S. are due today.

New Zealand’s dollar slipped 0.7 percent to 75.37 U.S. cents, while Australia’s currency was little changed at 78.09 U.S. cents. A stronger Aussie and lower interest rates than the economy would normally warrant are unavoidable in an environment of international policy easing, central bank Deputy Governor Philip Lowe said.

Dollar Index
The Bloomberg gauge that tracks the dollar against its 10 most-traded peers climbed 0.2 percent, extending gains from Wednesday after data showed U.S. service businesses expanded and companies added more than 200,000 jobs for a 13th straight month. The U.S. currency was stronger against most peers.

China will strengthen supervision in shadow banking, according to a work report from the National Development and Reform Commission also released Thursday. It will aim to keep the urban unemployment rate under 4.5 percent, expand M2 money supply by about 12 percent, and target trade growth of about 6 percent this year, it said.

“The lower target reflects the desire to reduce additional leverage in the economy,” said Dariusz Kowalczyk, an economist at Credit Agricole CIB in Hong Kong. “The 2015 targets point to determination to push through with structural reforms even at the expense of somewhat slower growth.”

The Shanghai Composite Index, the world’s best-performing benchmark gauge in 2014, slipped 1.7 percent, while the Hang Seng Composite Index slipped 1.4 percent in Hong Kong, taking its decline through the last three days to 5 percent. The Hang Seng Index retreated 1.1 percent and the S&P/ASX 200 Index pared loses to trade little changed in Sydney.

MSCI’s Asia-Pacific gauge that includes Japanese shares was 0.1 percent weaker as gains in the Topix index offset losses in most other regional markets.

Oil Gains
All but one of 10 industry groups dropped in the S&P 500 Wednesday as industrial companies tumbled 0.8 percent and energy stocks lost 0.2 percent. Health-care shares were the only group in the benchmark to advance, gaining 0.4 percent.

West Texas Intermediate crude traded at $51.74 a barrel in New York, a third day of gains. Stockpiles at Cushing, Oklahoma, the delivery point for West Texas Intermediate, expanded by 536,000 barrels through Feb. 27, according to the Energy Information Administration. Prior to that, supplies at the hub had grown by more than 1 million barrels each week this year.

Brent futures, the benchmark contract for more than half of world oil, were little changed at $60.61 a barrel in London. Seadrill Ltd., the offshore oil driller controlled by billionaire John Fredriksen, said the rig market is unlikely to recover for at least two years after the price slump cut demand for services. [ref]

FTSE Outlook

FTSE 100 Prediction
FTSE 100 Prediction

There is still some bull around, with that rise from the 6860 area yesterday, and the S&P climbing from 2088. We are back within the Bianca channels, with support at 6901 and 6888 for today from them. We also have the pivot at 6900, so I wouldn’t be surprised if we have an early morning rise before a drop back later on. The 30min EMAs are currently bullish, having changed over at the closing bell last night. Assuming that he 6900ish area holds then we have resistance at 6935 first, then 6945 and 6960 – the most recent high. The 6935 looks like decent resistance to start with so I will venture a short there. If the bears break below the 6888 then the Raffs will come into play with the 20 day supporting at 6867 and the 10 day at 6857. If these break then yesterdays 6831 is still valid, with 6790 below that. Will be a news driven day with the ECB later on so bear that in mind.

115 Comments

  1. Hi Nick or anyone taht can help me. what affect does the ECB news normally have on the ftse100 in previous months. I fancy a short here but dont wanna sell it then if possitive news comes out at 130pm then im running a large loss. Any views on this 130pm news?

    1. Im aiming to be all done by then, long initially to 6935 then dip down. Probably won’t hold positions over the news but its likely to send markets up. But you never really know!

      1. Hi Nick, My short order @ 35.1 wasn’t taken at that spike @ 10:20. Do you keep orders or short while you see? Thanks

          1. There you go chaps, happy now? 🙂

            I got stopped out of my short at 35 when you guys weren’t getting filled, doubled up long, may as well go with the flow till 13.30.

  3. Sorry, Senu, I wasn’t trading yesterday. I had relaxing day in a bath gathering energy.
    Just analysed yesterday’s charts. at 2.47pm (when you took long you asked me yesterday) on my screenshot I see a strong short trade from 18130 at 2.31pm should be in progress. No longs at all until … at all, I don’t trade against EMA on 10 min chart, the following trade is showing Short at 6.39pm from 18113 to the same level 18062 which bounced off at the previous short.
    I have psychological problems trading, nothing to do with my strategy. Holding is the issue I am dealing with at the moment. I like entering trades, it’s exciting but then I get into holding and I want to get out asap. I was thinking it’s possibly because most of the trades I tried to hold were losing and Holding associates to me with losing. Don’t know how to deal with that. It seems I tried all sources – diaries, webinars, articles…
    I know I possibly should trade less and on low stakes, so I do, but it’s bugging me.

  4. Hi all,

    Just wondering what platforms everyone here uses?

    I’ve only been doing this as a bit of a hobby for a few months and I started out on Plus500 because they have a good app and I could mess around on the move. Thinking of making it a more consistent thing (£1800 profit in 2 months of part time makes me think i’m not terrible at it).

    I’m thinking of moving to IG but was wondering if anyone has any other recommendations? (I am also scared about the ‘losses could exceed deposits’ thing, concerned I could get it wrong and they will come and take my car……and my wife, which is not an issue on plus500 what with their margin calls etc)

    Cheers in advance everyone

    1. haha. No IG allows you to use stops based on your margin. The only time that `losses can exceed deposits` is when is shoots up/down and you don`t have a guaranteed stop therefore your lose more money(even more than you have in your account).
      P.S. Can`t get my head round plus500, it looks primitive compared to IG nowadays lol.

  5. Can anyone explain why different platforms are showing different prices for the FTSE at the same time?

    1. Raises all sorts of questions about our trusted partners. E.g., re manipulation of data to their advantage. In such a data-critical context, you’d think data standards and integrity would be strictly enforced.

    2. They’re just bookies at the end of the day, operating a derivative market that doesn’t really exist, they make what prices they like.

  7. Question for Nick. The levels you give for resistance and support, are they based on data or are they just a gut feeling? The reason I ask that is generally the market just goes right through them as if they don’t exist.

    1. Based on data – previous highs/lows, fib levels, moving averages and pivot points.

      So dax today had 11460 for the short as it was Mondays high, down to 11417 where we have the 25ema on the 30min, for support and then back up.

      FTSE top of 30min channel was 6935. Support yesterday at 6860 was the bottom of the 10 day Raff channel, and so on….

  8. nick normally spot on biffens.. been a tough week to call this week. if u had been folling the last couple of weeks they have been pretty much spot on

    1. Yeah March has been rubbish so far. February was excellent though and delivered over 300 points!

      1. Maybe the markets are becoming more volatile at the moment. Normally indicates a break down.

  11. I’m glad Argyle has the patience to hold out when stuff like this happens…… i’d be sh1tting kittens!

    2. Yeah, I respect his belief in his trading approach, but the method of opening positions could do with a bit of brushing up in my humble opinion.
      Selling at the DOW close last night would mean short around 6902 (minus divi?), showing about 50 points the wrong way now. Obviously not a major issue with deep pockets and a plan, but another reason for not reading the Daily Mail.

      1. Love his sense of dramatics. Wonder if he did trade because FTSE fell away the last hour before 9.

        1. Was going to replicate his trade for lower stake, however that drop last night made me wait till just now.

      2. Experience comes in at this point. If you short here with 200-300 pips back up you can`t go wrong. DAX has @ 9600 at the beginning of the year and has gone up +1800, you`d have to be optimistic to think it will keep going without going below that 11000 mark first.

  12. What could Dragia say too make the markets rally today maybe he might chuck a extra 20 billion in on top of the 60 billion… Just too make sure he can stop deflation at the cost of European tax payers.

  13. Ahwab not sure mate with this trend on the Dax could be 12000 before 11000 as crazy as that sounds it looks the more likely…. Some year ends pundits saying 14500..

  14. Dow is currently recovering gradually from its 2-day dip, lending support, imo, to the FTSE. The former could still fall substantially within the confines of a rising channel, but I don’t see any signs right now of that happening. ROCnRoll status (daily) has switched to long again, while, on the same timeframe, my own ROC indicator is positive still and rising. On top of that, I’m expecting Draghi to do his stuff shortly — some detail around the deployment of the announced €60bn per month should excite the markets. (Just my guess. 🙂 )

  15. Yes Darren but only at 50% from 11350 I closed yesterday for a 55 pips gain but was way over my normal trading amount to average up… May add another 20% today but that’s it for now waiting for a while as getting fed with all this bolllocks on the dax… Need to trade the asx200 more much more relaxing too trade.

    2. I hope for your sake I’m wrong, but a good push from the DOW is all that we need to see 7*** this week.
      Where’s the selling going to come from?

  22. Just shows what the Euromob will do to create an illusion of everything is ok. They will be in such a mess in a year or two with their currency devalued to very low levels. They will have no place to hide then. This Drogbi guy is creating the start of the Euro break up. Surely the Germans will want out sooner than later.

      1. I cannot believe Dow is doing long against the flipping ema, although 10 min ema are ok for that.

      1. 3rd time never works. you’ve been lucky today as it is. I think the market strongly pushing up with together with Dow now.

        1. Good call Darren. NFP tomorrow, big profit take later. Dax will be way below 11500 later.

  30. At some point its going to soar through 7k short as much as you like but always use the Protective Stop and never move it……

    The Punter can be right 99/100 but its the 1 in a 100 time that empties your account and what the Market Maker relies on

    1. I told him exactly that that it’s enough one time, he wouldn’t listen. He obviously knows what he is doing.

  31. For anyone who cares I closed off my position from yesterday for approximately £200 profit, after spending about 36 hours cr@ping kittens, the rally this afternoon has finally saved me.

    Will now be looking at much smaller positions and ramping up my shorts as the election approaches.

    Happy trading 🙂

    1. Oh and thanks for the help Nick and anyone who was around to allay my fears somewhat yesterday!

    3. Good trading ftsewhoopsie – sometimes avoiding a loss is as good as making a gain in my book 🙂

    4. Well done. I am glad that it has bounced back for you. Next time use tight stops and decent entries off recognised levels. 🙂

    5. Of course we cared. I thought it was the opportunity for you to get out. Good you did.

  32. Got to laugh……just had an Autochartist popup on IG for the DOW
    “SELL at 18099.4, target 18093.4. Stop at 18162.4.”

    6 point profit at target, 63 point loss at stop.
    Somebody should put a risk/reward program in their software….

    1. It might fall a bit more — recovery from yesterday’s ≈18030 is weak and the last 4-hr. bar is down. Don’t know what the problem is — any news?

    2. FTSE up 100 points in a session and a half, with a 10 point self off at the close…..DAX within spitting distance of today’s all time highs…not much dragging going on really, Senu.
      I’m not a bull, just looking at the numbers, today was an impressive performance that could look like a V shaped bear trap on the FTSE.

  35. I normally close my FTSE positions at 1630 but I’m running this for a while. For some reason I have the feeling the DOW might surprise us on the upside later.
    I have two trading accounts, my “System” account and my “Hunch” account. This is a Hunch trade, now on a b/e stop.

        1. Morning Jack, sorry missed your question last night.
          My “System” account is where I apply my system, basically RSI with some other stuff I have developed.
          My “Hunch” account is just that, where I trade on hunches or feels that I get which don’t necessarily fulfill the criteria for action under my system.
          I keep separate P/L accounts for the two, if the Hunch shows three losses in a row, I give it the red card and paper trade it until I get three profits in a row, then go back to live trading.

          Got out of my long at 60 last night, sleepless nights because of open positions are history for me.

  37. short ftse 100 at 6965, £10 a point. 6990 stop loss. let’s hope i make some money today

    1. Why Short it from 6965……?? The Market is moving UP………Its firing Blind ?? You’re “hoping” its going to drop but happily will take a £250 loss ?? Just dont get some of the Traders here…..Likes of ETX, Capital Spreads, IG index, Pro Spreads must rub their hands in Glee

  40. Evening all. Fortunately didn’t enter the market yesterday evening. The good news for me is that I entered at 6955. Let’s hope they have the ATM well stocked. It’s going to need to be.

  41. Looks like Yanks about to go negative. NFPayroll tomorrow expected to bring forward interest rate rises. 17500 within a week. FTSE will be down to 6800. Dax will hold around 11200. Short now while markets at high level. Make the ATM’s empty.

      1. Won’t bother the U.S. if there is a sniff of interest rate rises sooner than later. A falling US market will take FTSE and to a lesser effect Euro markets with it.

      3. Yeah, and finished (for the time being of course). Picked up a bit of DOW at 95 on rsi which I will be selling back very shortly. And saying thank you for 40 pts I had no intention of earning.

  43. American hedge funds already heavily invested europe…but the problem I see is they have starting holding more cash this is either a sign that they expect a meaningfu drop or going to pump the cash into Europe. Funny thing is a soon as europe finish there QE program america will start a new one as markets can and will not be able to stand on there own 2 feet.

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