Support 6920, 6905, 6864, 6844 Resistance 6960, 6973, 6977, 6992, 7020

Good morning. Nice hold of the 6902 level for a slightly slow run to 6955 late in the day, and it stalled around there as expected. The bears were not quite as vicious from that level as I expected, dipping to 6930 before a slight bounce. The bears weren’t helped by Yellen saying that interest rate rises were unlikely till at least mid 2015. The trends are of course still up, with support for today at 6920 initially.

US & Asia Overnight from Bloomberg
(Bloomberg) — Asian stocks gained, with the regional benchmark extending a five-month high, after Federal Reserve Chair Janet Yellen indicated an increase in interest rates is unlikely before mid-year.

The MSCI Asia Pacific Index climbed 0.3 percent to 145.82 as of 9:01 a.m. in Tokyo after closing at its highest since Sept. 12 on Tuesday. The Standard & Poor’s 500 Index advanced to a fresh record after Yellen told the Senate Banking Committee that wage growth remain too low even as the job market improves, and signaled that a change in the Fed’s guidance on interest rates won’t lock it into a timetable for tightening.

“Equities are slightly fully priced but aren’t unduly expensive,” Angus Gluskie, managing director at White Funds Management in Sydney, where he oversees about $550 million, said by phone. Yellen’s statement “doesn’t alter anything from our perspective as investors. We’re not yet in a fully synchronized global recovery but broadly most economies are developing in a right way. There are black spots. Chinese economic activity has been a concern.”

Japan’s Topix index added 0.3 percent. South Korea’s Kospi index advanced 0.7 percent. Australia’s S&P/ASX 200 Index slid 0.2 percent. New Zealand’s NZX 50 Index jumped 1.4 percent as it headed for a record close.

Markets in Hong Kong and China have yet to open, with mainland markets resuming trading following the Lunar New Year holidays. A preliminary gauge of China’s manufacturing due today from HSBC Holdings Plc and Markit Economics is expected to signal a third month of contraction.

Energy shares were the only group to decline on the MSCI Asia Pacific Index after West Texas Intermediate oil posted the longest losing streak since August. U.S. crude stockpiles are expected to have swelled by 4 million barrels last week from a record, according to a Bloomberg survey ahead of the official government report Wednesday.

U.S. Futures
Futures on the S&P 500 were little changed. The U.S. equity benchmark climbed 0.3 percent yesterday to a fresh record high. The Nasdaq Composite Index added 0.1 percent, climbing for a 10th straight day to bring it within 1.6 percent of its 2000 record.

Yellen repeated that the Fed’s pledge to be “patient” on beginning to raise the benchmark interest rate means an increase is unlikely for “at least the next couple” of meetings.

Euro-area finance ministers agreed to extend a bailout program for Greece after the government said it would undertake measures including a revamp of tax collection. International Monetary Fund Managing Director Christine Lagarde said Greece’s policy proposals fall short on key changes and may not meet the lender’s benchmarks for aid to continue.[Ref]

FTSE Outlook

FTSE 100 Prediction
FTSE 100 Prediction

6935 is the daily pivot for today so initial support is at this area, and is in fact the after hours low so far, Below this then the bottom of the 10 day Bianca at 6920 looks to be worth a long. Below 6905 sees the bottom of the 20 day Bianca at 6864 being tested, and a sign that maybe the current rise is running out of steam. Above 6960 (most recent high) sees the top of the Bianca’s 6973/77. A break out from here would likely reach 7000ish, either stalling at 6992, or overshooting to 7020 where we have the top of both the Raff channels. Worth a short here….

I shorted the 6954 area yesterday but it really hasn’t done too much, though I expect a test of 6920 today. From here I think we will get a bounce back up as the 10 day Bianca has been holding quite well this week. If it does break (as indeed it might, being the 3rd test of that support), then 6905 is support, with 6874 bottom of 10 day Raff and then 6864 below that, followed by 6849 where we have the 25ema on daily that still hast been tested and should hold as support if we are going to push higher. I’m just going to go for the 2 trades in the trade plan below and see how it pans out.

120 Comments

    1. Yes mate, happy bunny this morning, took 20 points at 54 from 34, but didn’t short. Just looking at replacing the long around 30 depending on how it performs in the next few minutes.

        1. 3m rsi was a bit hot and previous high near, so I didn’t think it had the legs to get through. Was waiting for a second attempt to maybe short but it never came.
          How are you seeing this morning Jack?

          1. Thanks for replying, I forgot you are on RSI system. I didn’t trade this morning as I could only see slow shorts and I don’t take trades against the trend unless they progress fast, like yesterday’s short on Dow I took.

    2. good thing to do. it all sounds exciting when you enter on tops but then all you want is to bail as the price doesn’t fall immediately.

  8. FTSE has been down about 25 points from this morning’s high. Now seems to have found support around 6930. Not expecting a 100 point rout. Markets taking a breather after yesterday’s hike. 😀

    2. Sounds reasonable. I’ve been looking at taking a long for the past hour, but it’s not exactly inspiring is it?

    1. With that user name I can only assume you are dead. If you think it’s going to hit 7023 then you probably are brain dead.

          1. Just asking Argyle, but you’ve seen 40 points against you on that trade.
            If you are that bearish, why do you not average up in that sort of situation, or is just one trade and wait for it to come right the way you trade?

          2. Argyle – keep it nice eh? No need to be so antagonistic – if Riga wants to go long, fine. You concentrate on your short position and stop insulting people.

          3. Tmfp, pooped another 50 short at 6947 which I closed an hour ago for £1k profit. Have an order in at 6945 for another 50 short if it rises, however expect markets to fall today in general, so don’t expect it to kick in. Will close £100 trade sub 6900, but expect it closer to 6800 by time of closure.

          4. I have no doubt you will get out of it in a profit at some stage – who knows maybe even today – still doesn’t change the fact that you would have been better going long at 6919 not short.

        2. Ziggzagger. I went short because I think 6800 is 95% more likely than 7000. If it rose to 7000 I would sit and wait on it, however in the near future today, tomorrow or next week the FTSE will be down to 6800 and I will take my £10 k and laugh all the way to the bank. I could have gone long but if I consider the market will drop, why would I go long. Also if your username is rigamortis, I would consider that any posts are tongue in cheek.

  11. It’s very common on a Wednesday to get a 61.8% retrace of the high-low for the day. The challenge is of course picking the bottom to go long. The retrace doesn’t always occur on the same day, but often by the following morning. It’s not a 100% rule but worth watching.

  12. its come off a lot thinking of going long now just dosent seem to wanna drop taht extra 5pts is there support around here?

    1. it’s called illusion. time on markets seem so slow. it may drop fast any second but will make you wait ages.

    2. Well, it came off 27 points and hasn’t been able to put together more than a 5 point rally since then, so I’d be patient. Volume looks thin.
      It gets a little oversold on my indicators then burns it off sideways, usually a sign of a series of steps down.
      Nick’s got 20 down as being tested for the 3rd time and he’s on a roll at the mo. 🙂

    1. LONDON (MarketWatch) — The German government on Wednesday began selling five-year bonds with a negative yield for the first time. That means investors will pay to lend money to the country for five years. Germany auctioned 3.28 billion euros ($3.72 billion) of bonds due in April 2020 at an average yield of negative 0.08%, according to Germany’s debt management office. The sale comes before the European Central Bank in March starts purchasing €60 billion a month worth of assets, aimed a combating stubbornly low inflation and encouraging economic growth in the region.

      Makes me feel like Jims 11400 could come around rather quickly before a retrace to 11000, money has to go somewhere…….markets or neg bonds?? just a thought?

  20. CAC, DAX and Dow appear to have bottomed after mild dips (30 min. charts). Suspect FTSE will get dragged along later today. 🙂

  21. Depends on how long you want to trade for.Anything more than an hour or two I can only advise short. However there will be plenty of bulls on here suggesting long. The choice is yours.

  22. Well I’m back after a year away. Guess none of the old regulars left, don’t recognise the names anyway, could be my age. Just thought I would say hello.

  24. Senu, I recognise that name. Long trade, would consider that a risky one. Not that I’m an expert. Have been looking at the recent messages and must say it’s certainly a lot more feisty than it used to be.

      1. Biffens you were on the Trade2win on the Mega FTSE thread…….I cant hardly get it too load these days its so long I’ve virtually given up.

    1. rog, I am still holding my longs taken @ 20 and @31, stop @ 15. If I was in your position, will hold. Decide it. Its your money.

  32. I don’t see any major moves will happen today, markets went into some kind of consolidation zone. Longers are having a breather. Shorters are not powerful enough to break all those trending lines.

  37. Dow has righted itself and should now edge up past 18240. FTSE likely to respond in line, fighting back to 6950+.

      2. Confused…..I agreed with his current view of market strength, thus chose to CLOSE my small short @ BREAK EVEN….thus no loss or exposure.

        I may jump back in soon enough depending how the Dow moves come 7pm GMT

  40. The Pound on a positive move against a basket of currencies. Only makes UK shares dearer for investors overseas.

    1. should go higher I expect with an 11 point divi tonight,

      Closed my Dax short just now for + 12…..see if it gets dragged higher on the back of the Dow divi hunters and step back in higher….

        1. I wont say that…..I have been burnt before and learnt the very hard way from greed. But my plan is to watch to see if the Dax moves in the closing minutes of the dow and try and grab a higher short entry…..may not even happen or work, and then it could simply keep going north in the morning, but I will keep it small and see how it goes..

  43. Longers were reluctant but had no choice but to rise off support. False break out below the support first to close some stops and up it went moving rather cautiously.

    1. Now $3 up. Putin will be happier. Part of a Ukraine deal I assume. The Yanks have targeted him by deliberately over producing and encouraging Allies to over produce to bankrupt Russia.

      2. PS) what was all that Goa nonsense you were posting yesterday? Your IP address is Plymouth, UK via Sky Broadband!

          2. It annoys me. Why bother? Just post your thoughts – what you think the market will do and why – and then we can all share ideas and help each other.

  46. Come back to a mad house. Guess the clue was in his or her name. Back to the markets and I would assume from markets starting to fall, rising oil prices that Thursday could be one of those massive down days. Placed a small short position on UK 100 just before 9.

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