Good morning. Well that was a decent enough drop from he 6977 Bianca resistance area, which saw a slow decline all the way to 6930, before a bounce back to 6970 at the bell. As expected it was a bit of a consolidation day after the budget and the Fed announcement on Wednesday night regarding interest rates. The Dax continued to languish below 12000, but still with quite a daily range, and the Dow below 18000. Thanks to the Fed, most daily charts are looking a bit more bullish, with EMAs crossing over to bull, and breakouts on Wednesday of the daily channels. Unless the bears do something today then I think we will push higher, especially if the top of the 20 day Bianca at 6966 is broken first thing (with the pivot holding) and a test of 7000 looks pretty likely today.
US & Asia Overnight from Bloomberg
(Bloomberg) — Most Asian stocks dropped, following declines in U.S. shares, as materials and technology companies led losses.
About three shares fell for every two that rose on the MSCI Asia Pacific Index, which added less than 0.1 percent to 146.79 as of 9:05 a.m. in Tokyo. The measure, which closed yesterday at its highest since Sept. 9, has climbed 2 percent this week after the Federal Reserve said data suggest U.S. economic growth has moderated and officials indicated interest rates will rise at a slower pace than previously forecast. The Standard & Poor’s 500 Index slid 0.5 percent yesterday after rallying Wednesday on the Fed’s statement.
“A sense of reality returned to markets overnight after the post-FOMC shenanigans,” said Cameron Bagrie, chief economist in Wellington at ANZ Bank New Zealand Ltd. “The long-run outlook for gross domestic product and inflation in the U.S. is solid and there is still clear divergence on offer between the Fed and ECB and BOJ policy.”
While the policy makers at the Fed ponder when to begin raising interest rates, the European Central Bank and Bank of Japan continue with stimulus programs aimed at staving off deflation and igniting growth. Policy makers from Australia to South Korea have reduced borrowing costs this year as part of a global wave of monetary easing.
Japan’s Topix index slipped 0.1 percent. South Korea’s Kospi index was little changed and Australia’s S&P/ASX 200 Index added 0.1 percent. New Zealand’s NZX 50 Index rose 0.2 percent.
Futures on the FTSE China A50 climbed 0.3 percent in most recent trading in Singapore. Chinese stocks advanced for a seventh day on Thursday, sending the benchmark Shanghai Composite Index to its highest level since 2008, as gains by industrial companies offset losses in airlines.
E-mini contracts on the Standard & Poor’s 500 Index were little changed. The underlying gauge retreated Thursday as banks slid and energy companies slumped with the price of oil. [Ref]
FTSE Outlook
The pivot is 6958 so not far below the 20 day Bianca channel resistance at 6968 – which one will break. With the strength coming back in yesterday at 6930 for a rise back to the 6970 area, then there is still bullishness around, even at these heady heights, so I wouldn’t be surprised if we ping 7000 today or next week. That said, there is resistance just below that 6998. If we do break that then 7050 and 7100 are the next resistance levels to watch. Support wise, below the pivot we have 6928 (Yesterdays low), 6920 and 6900. As per a usual Friday I expect it will keep us guessing all day, and we also have option expiry so it will get a bit spike around 10:15. And an eclipse at 09:30 though not sure what effect that will have on prices. Astronomy and other outlandish events like eclipses (and even the weather) have had studies done to see the effect on stock markets – conclusion was generally they do, but not any more than anything else from what I can gather. I digress. For the moment the 20 day Raff is still capping the upward push (as it did yesterday) and todays level is 6975. There are some quite tight levels in play today – support 6958, resistance 6966 and 6977 so we will get a break one way or the other, I think a push for 6998 is likely, as long as the pivot holds.
Senu — Dow/30mins is clearer now. Support came in yesterday around 17940 and the index is up by 60+ points overnight — most of Wednesday’s gains stick. ROCnRoll status: Long. My indicators the same, as shown. Shall we say ⇒ 18100?
Left-click on link: http://i1348.photobucket.com/albums/p736/jmca01/Wall%20Street%20DFB_zpskpvj0rdz.png
Thanks Jim, I went long @18000 , booked some loss yesterday 🙁
Can see a pull back to 17,930 before further rise?
You the man Jim!
I don’t trade the DOW but seasonally, it’s been down on 5 out of the last 6 triple witching days. Of course today could make it 2 out of 7 if it’s up – but those are the odds. Looking for some weakness next week – maybe from mid-week?
Options expiry today – triple witching. Watch out for increased volatility 10.10-10.30am.
not a lot, was it?
nope – didn’t even go 20 points. You never can tell, but no harm in being prepared.
totally agree with that.
i just cant buy this FTSE surely gotta drop??
Looks like a narrow range day at the moment. I’m not buying, but I’m not selling either (unless it gets into the 6990’s again).
wont break that pivot im short @ 6970. If stays around here all day i think will break that 7000 tonight possibly out of hours so wont be runnign position over weekend.. good luck
Upward momentum feels quite weak, so if it does get to 7000 (even out of hours) I think it would be worth a short, (though I’d have a wide stop on it at 7060) and be prepared to hold it for a few days. Exit would be 6900 (38% retrace of this week’s move) and the high of last week which may act as support.
Good one Jim, dow hit 18100+ 🙂
Thanks Senu — cheers! 🙂
7000+ just before UK close?
dow pumping again, FTSE should close above 7000 🙂
7000 — YES! 😀
FTSE celebrating with spikes 🙂
Uncharted territory! Question is – when’s it going to die?
That spike felt like an exhaustion spike. Possible bull trap?
FTSE Record — Reading off a chart, we’ve just scraped past the last absolute high; ≈ 6950 in the last quarter of 1999, nearly 16 years ago for crying out loud. It’s about time we saw some real growth instead of dizzy fluctuations delivering parasitical profits only.
Here here!
Short 7010.
I OFFICIALLY HATE THE FTSE
GOING BACK TO PLAYING POKER A LOT EASIER AN DLOT LESS STRESSFULL
Where’s Argyle?
“The trend is your friend”, need to listen to my own thoughts. when is this freight train gonna stop.
Benjiw, Are you hoping he’ll give some words of wisdom or heckle him as its gone through 7000.
Just a little playful heckle 😉 I actually think he was right; should tumble soon.
Shorted during the spike on Wednesday after hours and was 40 points in profit…held on out of greed and now 40 points in loss. Never thought this would break through 7000 so didn’t set a stop.
Any ideas if this is overbought or not?
We could be at the top of the channel. (High on 26th Jan and high on 20th Feb lines up with a trend line high of about 7035 today.) The trouble is on a trending Friday it can move 20-30 points or more into the 21.00 close. The technical target for the 18th-19th Feb retrace and then break higher is about 7060, but it doesn’t have to get there. I have a small short at 6995 which I’m going to hang on to. It looks like pivot for Monday will be around 7000 – I think that should break on typical Monday morning weakness looking for 6972 (which should be S1) as an exit. If it goes higher than 7075 – I will exit with a loss.
Incredible year so far – biggest loss of 250 quid today on FTSE! Overall for the month still up.
Oh! its a surprise from you. What was that trade sam?
shorted at 6988 this morning stop by 25 points. FTSE knocked me out. didnt expect FTSE go over 7000. Well done FTSE 😀
dow one way heading up with no stop, all going bullish
I went short @ 140, will I have to book losss 🙁
Dow — Looking for 18200 and maybe 18250, a few days ahead.
FTSE — Target 7050, perhaps 7075, likewise.
ROC prognosis good in both cases. 🙂
oh, booked my loss 50 pts 🙁 errrrrr
Ouch!
Zig zagger, do you normally have 80 point stop loss targets?
If I’m doing a swing trade then I will have wider stops. I was planning to hold 6995 into the end of next week looking for 6900, but looking at the rising trend line from 16-18 March it shows support on Monday around 6970 so ‘if’ we get there, it could bounce back up to test the high again, so I’d look to short higher up. 7075 is my ‘extreme’ stop where I will start to feel the pain and where I will say ‘I was wrong’ as I don’t think it should go higher than 7060 before turning down. It’s a question of balance. I know from a technical risk-reward approach an 80 point stop sounds wide, but it all depends on margin, assumptions about price action and size of the trade. FWIW I was wrong on my assumptions today, so I am looking at getting out with a small profit / breakeven on Monday before moving on to the next opportunity. I also closed a long today from 6850 so I’m still in profit overall.
I think I get what you say, that’s one of my downsides, overall money management. Am a bit lazy on that front. Sounds wise that you watch the overall balance of all trades.
Guys, be honest, is it possible to be successful spread betting in the long run? Or is it inevitable that you will eventually have your account wiped out? I am not saying it’s the case with me but am finding any profit I make soon gets undone. I have tried to be measured as possible, keeping strict with stop losses, and other than the first couple of days, not really allowing myself getting sucked into psychological ups and downs of this endeavour.
Newtrader, personally ive been trading just over a year and am sitting about b/e. Some good wins then along comes a bad day and undoes the hard work.
I’m treating this just like any other job / skill. In that It takes years to learn before you can become competent and then if the motivation is still strong and I find a strategy that works for me then, Happy days.
Still holding this short but getting a bit worries now which means it should turn soon after it’s wiped me out again!