Support 6936, 6928, 6924, 6902, 6890, 6883 Resistance 6949, 6979, 6994, 7007, 7031

Good morning. Well that turned out well with the rise int he morning, though it stalled a lot more at the first resistance level of 6974 for a dip down to the support at 6924, and completely failed to get the 6990 area to test the top of the Bianca channels News out yesterday wasn’t too bad, with UK manufacturing factory output rising to a seven month high. Employment levels rose for the 22nd consecutive month in February, as stronger confidence fuelled an increase in domestic orders. The Markit/CIPS Purchasing Managers’ Index rose to 54.1 in February, from 53.1 in January. This was well above the 50 level that signals growth, and beat analysts’ estimates for a more modest rise to 53.3.

US & Asia Overnight from Bloomberg
(Bloomberg) — Asian stocks rose after U.S. equities climbed to records as rising consumer spending signaled strength in the world’s largest economy. Japanese shares gained after the yen weakened.

The MSCI Asia Pacific Index advanced 0.1 percent to 146.31 as of 9:02 a.m. in Tokyo. The Topix index added 0.4 percent. Both the Standard & Poor’s 500 Index and the Dow Jones Industrial Average rallied to all-time highs as data showed U.S. consumer purchases rose 0.3 percent in January, adjusted for inflation, adding to signs the recovery is on a strong footing as the Federal Reserve assesses inflation and jobs data to gauge the timeline for raising interest rates.

“The broad trend in shares is likely to remain up,” said Shane Oliver, Sydney-based head of investment strategy at AMP Capital Investors Ltd., which manages about $118 billion. “Valuations, particularly against bonds, are good, economic growth is continuing, and monetary policy is set to remain easy with further easing in Europe, Japan, China and Australia and only a gradual tightening in the U.S.”

Japan’s Nikkei 225 Stock Average climbed 0.4 percent as the yen held Monday’s 0.4 percent loss to trade at 120.17 per dollar.

Trading of Sharp Corp. shares was halted pending clarification of a report in the Nikkei newspaper that the company will seek investment from its lenders, including a 150 billion yen ($1.25 billion) debt-for-equity swap. The suspension was lifted at 9:04 a.m. in Tokyo after Sharp said it wasn’t the source of the report and no decision was made on its restructuring. Shares dropped 7.1 percent to 136 yen.

South Korea’s Kospi index added 0.2 percent. New Zealand’s NZX 50 Index was little changed.

Australian Rates
Australia’s S&P/ASX 200 Index gained 0.3 percent. Most economists surveyed by Bloomberg News say the central bank will cut interest rates to 2 percent on Tuesday and hold borrowing costs unchanged for at least a year.

China’s leaders gather this week for an annual session of the national legislature where the Communist leadership typically unveils its goals for the year. Markets in China and Hong Kong are yet to open.

Futures on the S&P 500 were little changed today. The underlying gauge climbed 0.6 percent on Monday in New York, and the Nasdaq Composite Index breached 5,000 for the first time in 15 years. [Ref]

FTSE Outlook

FTSE 100 Prediction
FTSE 100 Prediction

Well the lower support at 6924 held very well yesterday so that is still the line in the sand for the bears to break to push lower. The bottom of the 10 day Bianca is at a slightly nearer 6936 this morning and we are just below the pivot. However, we kind of had a bit of a bearish Monday with the dip from the 6974 resistance, so we could be on for the usual pattern with bull Tuesday to follow. Resistance today is initially at yesterday high, 6974, then the top of the 10 day Bianca 6979, with the 20 day above that at 6994 – probably worth shorting both of those levels in case we get another meandering range day. Support below the 6924 is 6902 bottom of the 20 day Bianca, then 6891 below that. The 10 ema on the daily was the 6924 support yesterday, and has rebuffed numerous tests to break it – thats showing support at 6928 for today, so the upward trend is still in tact, slow rise that it is. I have put in an initial rise towards the 6979 area, then a dip back down and am expecting a small initial dip tot he 6936 (possibly 6924) area first. The S&P held its lower supports well yesterday at 2103, rising to test the 2115 resistance, , gains it has held overnight so I don’t think we will be too bearish today. However, the Greek situation rumbles on. Greece is preparing to tap its final pension reserves at the country’s central bank if needed to avert a devastating default to the International Monetary Fund and keep the government going over the next two weeks. The Greeks must pay the IMF €1.5bn in a series of deadlines this month, starting with €300m as soon as Friday.

83 Comments

  1. Strange how different experts say different things. I guess there is a lot of gut instinct involved. Had an e mail from broker this morning, advising of bearish outlook from now end with FTSE down to 6765 being likely level by month end. Strongly advised about not taking any long positions in the near future. Have to say , he has been correct in the past.

    1. Think it all depends on your time frames. Can see 7500 this year, but wouldn’t be holding longer term longs from 6950 thats for sure. A dip down to 6800, maybe…

          1. No Conservative majority or coalition. Anything else the markets won’t be happy with.

  2. Just a update on ASX200 no rate drop from Australia last night rates remained at 2.25.

      2. Agree BB. I also agree with your assessment of some kind of pull back, but these things can take longer than people think. We seem to be getting reversals of reversals which can be a sign of a topping process as the bulls and bears fight it out. Sentiment is at extremes. We’ve had a potential lower high at 6964. Can it form some kind of descending triangle before keeling over?

  9. Haha im far too brave… this had best get its act together and get back up to pivot… after that it can fall as much as it wants lol

    1. Me too
      Now that 6924 has gone the next support is 02 – so will try to get out at b/e

  11. is it low volume on Dow or something? I don’t have volume indicator on my platform. do you have it and how it is called? Volume or something else.

    1. Had long 18219.5 but 4 points spread… I pulled out b.e. as no movement for 40 minutes. Maybe I am missing out here. Not sure, indicators are crap.

      1. it’s trending down, Senu. Once it broke 18216 I was looking to take a short, took it 23.5 and closed 03.5 at 3.25 but as you see it wobbled up again and now continued falling to 18190. Will it break? More likely. to 177 I suppose.

  19. Long £19 @ 6911. Cut my loss or will this see 6920 by morning????? Thoughts please?!?

    1. at 12.48 pm when you wrote last time you were asking if you should close your profits as you already started losing them. I’m still trying to understand how you let your profits run and then didn’t cash on it. What can I say now, you over waited, it’s too late, you missed out on this trade. You should have closed in the morning, at 933 was your last chance at 12.00ish. You could surely see the pull back was starting, the new Lower High has developed by 11-12.00am
      It may retrace of course, but now you are in the hand of God.

      1. I actually have the opposite, I cannot let them run. When I occasionally win this is when I was literally separated from the computer for work etc. The other day I was 33 points on Dow I went short following Nick’s arrow and when I was back I was astonished to see 33 profit which I immediately close, and it crept back up.
        I think if you have profits, take it. Can you tell me how you manage to hold and hold for ages when you are winning of course. (I know what it’s like to hold a losing trade, I am interested how to teach myself to hold a winning one).

  26. Yes Senu at last I have made over 105 points on ASX200 this week at max money. So March is starting of good just need Dax to take a big nose dive.

  27. Need 6911 by morning for flat. What are your thoughts honestly? Need thoughts or stop out now???

    1. Why not, it’s good idea as it’s holding, but be cautious and cash your profits, don’t let them slip if it starts retrace.

  29. It was a classic combination on Dow today. In the morning I noticed a range after it dropped from the top. I looked lots of webinars, and one man said when it does like this and goes in a range, the stop loss is so minimal you can enter short with minimal risk. From 9-10 I was thinking about it but… if it broke up it would go up of course. I didn’t risk in the end.
    And surely it broke down from that mess at 12.00 and dropped to the next level 18216 which I was seeing from yesterday.
    Now there were 2 scenarios: It would bounce of it, retrace, consolidates and moves up.
    Or, it bounces of it and breaks through, retests 18216 and will move down to the next level which is 18135, the bottom of yesterday’s rise. And it came accurately there.

    1. It could go to my favourite 18216 and turn back, don’t trust it. MACD went below 0, it’s not a good sign for long. It could be just a deep retrace happening, now it’s on 61.8% 18208.

      1. It’s not bad you know. It’s hard to say what happens next. It could just keep going, the question is were you ready to risk more? Rog risked and now he is chasing his own b.e. stuff happens.

        1. You see, EMA now positioned for long and I will not go short right now as it would be a guess. if the price turns, then you go short. It just touched 18216 and it may break up, in this case, bulls are back.

          5. I think at 20.00 we will not see anything dramatic. Price is holding and there’s no short for me.

    1. It’s always worth trying. if 177 holds it will bounce off it and break that 216 who knows. I am getting tired now so I will go now.

  32. Senu, had a trailing stop on Dow, stopped in profit. DE yesterday closed for 50 points.

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