Support at the pivot today 6140, rise to 6180 resistance, Asia and Oil climb

Support 6142 6120 6112 6057 6018 5998
Resistance 6179 6181 6201 6210

Market Summary for 3rd March
It was a day mainly of consolidation with the FT100 finishing little changed. The short from 6172 worked well, and did in fact run to the 6110 target in the end too, though it looked like it wasn’t going to drop for a while when the order first took!
The range was roughly 6110-6175 which is relatively small compared with previous sessions.
One of the underperforming sectors was healthcare after credit rating agency Moody’s cut its outlook on the global pharmaceuticals industry.
The housebuider sector was also weak along with some consumer shares.

US & Asia Overnight from Bloomberg

  • Gold retreats after entering bull market; Copper gains
  • Yuan strengthens before annual meeting of legislature

Asian stocks and oil both rose to eight-week highs and emerging-market currencies strengthened ahead of key U.S. jobs data and the start of the Chinese national legislature’s annual gathering.

The MSCI Asia Pacific Index of shares and crude were both headed for weekly gains of more than 5 percent. A Bloomberg gauge of developing nation’s currencies climbed for a fifth day as Indonesia’s rupiah advanced to a nine-month high. China’s yuan strengthened the most in two weeks after the central bank raised its daily fixing. Gold fell 0.2 percent, after entering a bull market on Thursday, and copper rose to the highest level since November.

Global equities have recouped more than half of this year’s losses since sinking to a 2 1/2-year low on Feb. 11 amid improving U.S. data and monetary stimulus in China. Friday’s report on U.S. nonfarm payrolls will give investors further insight into the health of the world’s biggest economy and the likelihood of further interest-rate hikes by the Federal Reserve, while China will announce its plans to revive growth when an annual meeting of the National People’s Congress gets under way on Saturday.

“U.S. data continues to shine, oil continues to firm and risk appetite is coming back into all aspects of the markets,” said Angus Nicholson, market analyst at IG Ltd. in Melbourne. “Expectations will be quite high for an announcement of significant further fiscal spending from China’s National Party Congress.”

The American jobs data is forecast to show hiring picked up in February while wage gains slowed from the fastest pace in a year. Fed funds futures are pricing in a less than one-in-10 chance of a rate increase at the end of the Fed’s next meeting on March 16, the probability of a boost by June is 35 percent, up from 24 percent a week ago.

Chinese Premier Li Keqiang is likely to confirm this weekend a shift in the monetary policy stance from “prudent” to “prudent with a slight easing bias,” says Tom Orlik, chief Asia economist at Bloomberg Intelligence in Beijing. A fiscal deficit target for the year will also be set and Vice Finance Minister Zhu Guangyao has said it will be higher than the 2.3 percent goal announced for 2015.

Stocks
The MSCI Asia Pacific Index rose 0.3 percent as of 1:55 p.m. Tokyo time, headed for the highest close since Jan. 6. Japan’s Topix added 0.1 percent, poised for a weekly gain of 4.6 percent, and Hong Kong’s Hang Seng Index rallied 0.6 percent. The Shanghai Composite Index fell 0.5 percent.
BHP Billiton Ltd., the world’s biggest miner, rose 2.8 percent to a two-month high in Sydney, supported by rising raw-materials prices. Cnooc Ltd., China’s biggest offshore oil & gas company, climbed 2.1 percent to a three-month high in Hong Kong.

Futures on the Standard & Poor’s 500 Index were little changed, while contracts on the U.K.’s FTSE 100 Index climbed 0.6 percent. Brazil’s benchmark moved into a bull market last session, closing more than 20 percent up from its most recent low, amid speculation President Dilma Rousseff will be impeached.

Commodities
West Texas Intermediate crude rose 0.7 percent to $34.81 a barrel, extending this week’s advance to 6.2 percent. Key OPEC members intend to meet with other producers in Russia on March 20 to renew talks on an agreement to freeze output and there will be a “dramatic price movement” when that takes place, Nigerian Minister of State for Petroleum Resources Emmanuel Ibe Kachikwu said Thursday.

Gold fell 0.2 percent on the spot market, after jumping 2 percent last session to its highest close in a month. Copper rallied 0.6 percent in London.

Currencies
The Bloomberg JPMorgan Asia Dollar Index, which tracks the region’s 10 most-used currencies excluding the yen, was set for its highest close in three weeks. South Korea’s won rose 0.7 percent versus the greenback, buoyed by about $1 billion of overseas money that flowed into the nation’s stocks this week. The rupiah strengthened as much as 0.8 percent. The dollar fell this week against all 31 major peers, including a 3.2 percent slide against Australia’s currency.

“There’s been a retracement in the dollar generally,” said Patrick Bennett, a strategist at Canadian Imperial Bank of Commerce in Hong Kong. “We’ve seen also that some portfolio flows have returned to Korea.”

The yuan strengthened 0.3 percent, climbing for a fourth day after the central bank boosted its reference rate by 0.2 percent. The nation’s currency and monetary policies will remain stable, People’s Bank of China Deputy Governor Yi Gang said in Beijing on Friday.

Bonds
Negative yields on Japanese bonds with maturities of up to a decade spurred demand for longer-term securities. The 20-year yield fell by as much as 4.5 basis points to a record 0.42 percent.

Bank of Japan Governor Haruhiko Kuroda said Friday that he’s not considering lowering the central bank’s benchmark interest rates deeper into negative territory at this time. The authority in January began charging commercial lenders on a share of the cash they park at the central bank.

Ten-year U.S. Treasuries yielded 1.83 percent, seven basis points more than at the end of last week. They were little changed on Friday. [Bloomberg]

FTSE 100 Outlook and Prediction

FTSE 100 Prediction
FTSE 100 Prediction

Its a big day in terms of news today with the NFP news out at 13:30 and the US unemployment rate at the same time, forecasts are 195k and 4.9% respectively. As such its likely to get a little lively around that time so bear that in mind. Being a Friday I tend to dial it down a bit as well so smaller stakes on the trades below in the plan. The video was well received so I will do that regularly and send it out via separate email. The FTSE 100 has stayed within the 6100 and 6200 levels pretty well, it did look like we were going to get some downside momentum going yesterday and break 6100 but it didn’t and its fought back again. Initial support today is at the pivot at 6142 (the live charts one is just below at 6137), so I think we may get an initial bounce from this area, probably up to R1 at 6180. There are a couple of other resistance levels here – a major PRT one, 100 Hull MA on 2 hour again, and a rising 30min channel top, so I think if we do hit this area then a short should play out well. Tight stops on all as per usual. If the bulls manage to break the 6180 area then it would be pretty likely we will see 6201 and this area is worth a short. Above this then the 10 day Bianca channel at 6283 is a possible upside target though I doubt we will see that today. Either way, it will need to break out of the 6100/6200 range soon, and I am favouring down to 6000 rather than up to 6250+

99 Comments

    1. quiet now, will wait for another decent long/short signal.
      Plan for today will be long around 6100 and short around 6180/6200
      GL all 🙂

          1. Enough of this 60-50 range, managed to scalp +60pt so far.
            Will wait for NFP numbers now!

      1. To be honest after the ADP on Wed,13.15,214k against an expected 185 I dont think NFP could do anything unanticipated.
        http://www.lcg.com/uk/analysis/#8710
        Yesterday Dax was lagging the way down like it expected the U.S to turn it around and now again with the buying coming in.I dont know though.Preferred yesterday to this though.

          1. I think that’s why we have had this recent gains without any pullbacks plus oil has been very strong over 35.
            I am expecting FTSE to hit 6300 or perhaps 6350 by Thursday next week before we see any pullbacks if just incase Mr Oil fancy going down to 30s again than 6000 is on the cards before Draghi and then back to 6150 on Thursday next week!

          2. Sort of like everyone told him he underperformed last time,so this time he’ll overperform 🙂 could be.Nothing Bearish about being over the day befores close and pushing against R,yet again,anyway,not at the moment,feels a bit like a test to see who understands odds lol.

  3. Morning All, I’m with Nick on the slightly longer term (funnily enough!) and guess it’ll be hard to get through 6200 and we could do with a visit down to 6000. If I get the chance I’ll be playing tmfp’s trick over NFP’s with silly limits either side of whatever cash is showing a couple of minutes before the announcment. Good hunting!

  4. Morning All,

    First thing, excellent video Nick, keep them coming. I still expect a dip to 630-70 area on the Dax before more upside. I have a small short on Dax at 775 with stop at 790.

    1. Thanks for your post yesterday afternoon. I didn’t notice it until the early hours of this morning, but did reply.

    2. Agree Jack, depends on the finish of this 1 hr candle and it needs to break through 803 comfortably. I don’t think that will happen before NFP anyways stops are in place. If it does break then 845 is a possibility.

      2. I see, cos I thought you ignored it for some reason. I hope that helped. I know it will take you time to get your head around. So the more information you have now the more you’ll be able to filter it for yourself. I used to learn the same way thanks to the people on this board.

        1. I wouldn’t ignore anything! It’s hard to keep track of posts on here. It would be handy if we had e-mail alerts so we know when we get a reply.

      3. RJ, I just saw that bullish flag on 1, 2 hours with MACD well above 0, it lead to a massive ups in the past and today if NFP. I think support at 9700 held quite well.

          1. RJ, I am trying to support my son with my thoughts and prayer right now. I told myself until I sort out his school choice I will not trade. It’s important week, we got 2 nice offers here. So I’m out for concerts and so on. Yesterday one finished at 10.00 but school seems fantastic. So no trades until we settle. But long was obvious, but with regret I was out.

          2. took +13 on rest, it’s going to hit 6200 soon again.
            Will wait for a decent bounce to short again!

        1. I was just risking this morning profits so not a big deal for me and was expecting FTSE to be around 6150 area before 01:30 but we now have a good support at 80s.
          Waiting for a bounce again.

  11. Not sure that the news at 13.30 will make much different too market good or bad looks way too bullish… Only have my short on ftse, and that’s it for for those that trading the 13.30 Gl.

    1. GL mate, I am waiting for a bounce to short – I know it’s way too bullish however we can still break 6200 and bounce to 6250-6280 area for a short period of time.
      I will sit tight and wait for a perfect bounce to short!

  12. I’m adding to my long on a break of 6210. I’ll keep the order off when NFP goes a bit mad though.

  14. FGS, I’ve just read your yesterday’s post and want to add a couple of words for your thinking. They always do it to spook people out of the trade. It happened to me loads and still happens cos you get scared and pull out. When you got confirmation to exit it was the end of 1st wave. OK, you could exit if you scared and don’t want to risk your 5 points SL to check if pull back would not touch your SL.
    For me the first entry would be actually at 12.09 (and re-entry for you). Tbh, I would have never gone in when you did, actually, plus I never use doji or any other candle pattern suggesting reversal as a signal for initiating the trade (just a thought for you). I use candle formations only as confirmation on what I am about to do based on other factors like indicators and waves). Also I look for signs of level rejection (Price is beating into a level). At 12.09 I could see that the price was rejected from 170 and now bouncing off it. And with help of my MACD and EMA I would have gone in short, I don’t need doji or Stochastic readings.
    By the way, talking about Stochastic, it showed a crossover for downside at 12.09 and I wouldn’t care did it reach 80 or didn’t. It reached 75 by the way, good enough I think. It wasn’t a strong pull back to raise Stochastic back to its highest. Sometimes Stochastic behaves peculiar.

    1. Thanks Jack. I’ll have to re-think my approach. I just don’t know enough to think of those kinds of things yet. I thought I was doing the right thing by being disciplined and waiting for the apparent triggers etc.

      1. You will learn. In time you will feel things better. I’ve tried lots of indicators, pairing them, analising them and in time you understand what is more important what is less. You establish your relations to them. My original strategy now is no way close to what I use now. It developed with time. I laugh sometimes when I read my old strategy notes, can’t be me who wrote them. But they helped me understand how the market works so when something else came along it got to the right ground. So be patient and use smaller stakes to learn.

        1. Si – Dax is super weak now and FTSE is going to test 6140.
          I am holding my 75 short tgt 40

      2. Phew! £75pp too, I’ve set the b/e stop. Not used to seeing blue numbers. Now, back down to 6000 I hope.

    1. I’m not liking this rise, typical! If I was long here, it’d be absolutely flying down but just because for the first time in my life, I’m blue with zero risk, it’s rising.

      2. Yep, it was just a retrace. It just proved that 150 didn’t break. EMA didn’t suggest short at all. It was just a pull back. You should have come out when it bounced off 150 on the second time (from 3pm onwards). Still nice 40 points.

  24. Hi all, been watching from the side lines and saving hard for the start of phase two of my own trading journey.

    I recently contacted IG about getting them to put the RAFF indicator on their basic charts. They said if more clienst ask for it then the development team maybe able to get it on there. For me I find it hard to get time at the PC to use pro real time and mainly use my apple gadgets for any trading.

    So in a bid to drum up support, if anyone else fancy’s this option do bombbard IG with a request. You never know we might get lucky.

  26. Need the ftse to close below 6200 otherwise I fancy another rally next week. Below 6200 I think we will see a pull back and hopefully save my short 🙁

    1. Why take a Counter trend trade on a Friday without confirmation in a closed market,with Kuroda talking at 03.40 Monday morning and the ECB next Thurs and stories about direct intervention by the Chinese in their Stock Markets in a Cycle up year after a double bottom on the Dow and 3 weeks of Rally and a breach up through the 200sma daily on the Dow ? Isnt that sort of pursuing stress ?

  27. Evening all, popped by to say have a good weekend. I have to say, wsf, that you are quite right about counter trending but I have just chucked a couple of chips on the table, short Dow at 17000, stop at 17100, looking for 16600 and shorted more ftse to bring average up to 6165, stop at 6250, target 6000. So, nice relaxed weekend for me then…..!

    1. 🙂 Hey Chippy,you got in with the price moving your way there,so a bit different.
      Have a good weekend.

  30. WSF, I’m new to this but I haven’t done to bad to be fair. Still learning. I just fancy a pullback on the ftse, and I placed a trade today and am willing to let it ride over the weekend till Monday. It’s nothing big only 3 quid a point. It’s all a learning curve.

    1. Yeah,sorry,just thought,if the entry point doesnt have any confirmation and isnt taking the direction of the trend and there is no risk calculation or exit point beyond a Stop by time then it was worth mentioning that that process might be worth reviewing,especially since you sounded like you were troubled by being out of the money in your original comment.I misunderstood.Wish you luck with it anyway,be nice to see a decent correction.
      End of the week 🙂 Have a good weekend everyone.

  31. Fib retracement level of 61.8% on Dow was 17041. Was tested Friday evening and bounced. In my opinion the rally is now over and although the markets will be range bound for a few days the inevitable fall that tmfp warned us of will soon commence and this time it won’t stop at 5500 on FTSE or 15500 on Dow. Think more of 5200 and 14000. Si if you want to recover the money you lost might be a good time to put a smaller stake per point on Dow and over the next couple of months ride a 2000 point fall.

      1. March was the 2008 high for Gold,it didnt get back above it until Feb 2009,people probably dumped it to cover losses elsewhere.Jim Rogers was a big buyer when GBS was at 70usd in the Summer I think.,same year the X files film came out.

    2. I do hope there’s a drop. However, before that happens, every time I look at the daily charts, I see FTSE going to 6400, DOW to 17600 and it looks like oil might have some way to go yet.

      And then a drop to the levels you said. My completely non-scientific pipe-dream chart analysis is for a continuation of the rise at current levels, then some consolidation through April and and then the crash in May.

  33. well with the help of this site,had my first positive trade going short with a very small stop, made 25euro, small but i am very happy.

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