Good morning. It was another day when it looked like a rebound was likely but was quickly stamped out by more corporate bad news. Anglo American dived after the miner announced restructuring steps, including plans to consolidate and suspend dividends for the second half of this year. This knocked all commodity shares and sent the market falling soon after the open. Continued concerns about the China economy after more poor data also weighed on the markets. As a result mining shares took most of the top spots in the biggest fallers for the day. Interestingly, the 6130 level mentioned in the follow up email was tested (6119 as the low) and we have had a little bounce since). It’s very much risk off at the moment in advance of the Fed’s “possible” interest rate rises so will be interning to see what Yellen says on the 16th, as well as poor news flow. Shouldn’t be too long before that changes to more upbeat again – its all cycles and waves! If the bulls manage to pull away from the 6150 area this morning then we could be on for a rise to 6300 over the rest of this week.
US & Asia Overnight from Bloomberg
Asian stocks fell ahead of China inflation data, with the regional benchmark index headed for a two-month low, as the cheapest iron-ore prices on record weighed on commodity producers.
The MSCI Asia Pacific Index fell 0.4 percent to 130.14 as of 9:01 a.m. in Tokyo, poised for the lowest close since Oct. 6. The gauge extended its 2015 drop to 5.6 percent as oil lingered near its lowest level since 2009 and the decline in iron ore compounded concerns about slowing growth in China. Data Wednesday is projected to show a 45th monthly slide in Chinese producer prices after evidence of ongoing weakness in Chinese trade weighed on global shares Tuesday.
“You’ve got this massive confluence of events conspiring for a negative outcome,” said Tim Schroeders, a portfolio manager who helps oversee about $1 billion in equities at Pengana Capital Ltd. in Melbourne. “Things are feeding on themselves at the moment as China goes through a period of very weak economic data, overhanging concerns about the Fed raising rates in the next week or so and some company specific things which overall are eroding any positive sentiment.”
Australia’s S&P/ASX 200 Index declined 0.6 percent as the world’s two largest mining firms retreated. Rio Tinto Group fell 3.5 percent, on course for its lowest close since March 2009. BHP Billiton Ltd. slipped 0.9 percent, extending a 10-year low. Rio cut its capital expenditure forecast for 2016 as the producer strives to balance shareholder returns with investing in projects. On Tuesday, Anglo American Plc scrapped its dividend for the second half of this year and for 2016 and said it’s selling assets and closing mines.
Ore with 62 percent content delivered to Qingdao sank 1.1 percent to $38.65 a dry ton on Tuesday, a record low in daily prices compiled by Metal Bulletin Ltd. dating back to May 2009. The raw material peaked at $191.70 in 2011.
Japan’s Topix index slid 0.5 percent as metals companies and developers led losses among the measure’s 33 industry groups. South Korea’s Kospi index was little changed, as was New Zealand’s S&P/NZX 50 Index.
Futures on Hong Kong’s Hang Seng Index slid 0.7 percent in most recent trading, while contracts on the FTSE China A50 Index lost 0.1 percent. Economists predict Chinese producer prices will slide 6 percent in November from the previous year after a 5.9 drop the previous month, with the consumer price index rising 1.4 percent from 1.3 percent.
Futures on the Standard & Poor’s 500 Index added 0.2 percent after the underlying gauge lost 0.7 percent Tuesday. Traders are pricing in an 80 percent chance that the Federal Reserve will lift interest rates from near zero next week. [Bloomberg]
FTSE Outlook and Prediction
Looking at the 30min chart there is a good argument for a bit of a rise to the 6180 area, though we have the daily pivot at 6169 just prior to that which may act as resistance. The 30min moving averages have just about crossed over to bull so if the bulls are quick out the blocks to make that stick then we might well see a bit of a bounce. There is fairly strong PRT resistance at 6182 so we may see a dip from there, and there are 2 30min channels in play – a minor and major – with the minor showing resistance at 6182 and support at 6135, and the major showing resistance at 6215 and support at 6095. I have plotted the blue arrows as my preferred route for today, however, if the bears are out in force then that orange arrow is likely with a dip to that 6095 area. The bulls need 6145 to hold first thing for that first rise of the day to take place.The dividend is just 1 point today so nothing to get excited about towards the close for that.
Morning chaps.
That was an exhausting but profitable day, slept for 12 hours lol.
Had my scale up shorts waiting from 75-200 but never got there this morning, jumped on at 48 and just taken 20.
The ill defined support area around 20-30, plus a ‘do not cross line’ for me on the DAX of 10600, makes me a bit more bullish off these levels than is comfortable.
On the other hand, 6100 is awfully close and needs a test and hold imo before any decent rise can start, which would imply the DAX breaking 600 and not much support then that I can see before the Big One, 10,000.
Short break of 20 although short term oversold. Sell the bounces I guess, should there be any. 600 nothing.
Avoid falling knives.
Half out at 02
What do you mean: avoid falling knifes? Do you mean – not to enter long on them of something else? I thought falling knifes are needed to go short on them.
Just missed one on Dow.
I meant don’t try a naked long in an attempt to pick a bottom Jack. When it’s like this, pauses in selling can con us into thinking they are consolidation when they’re not.
6100 held first time anyway. I’m not as bearish as yesterday, I think this might be a bit of legacy weakness. Only small positions for me atm.
A yeah, that’s what I thought during 8.56-9.10 on Dax, it looked like consolidation. But I didn’t see that drop coming for some reason even after a signal candle I had my doubts “No way it will go even more down after going down for the 1st hour”. Basically thought 10613 area should hold.
But I grabbed 35 odd points on LONG (can you imagine) on Dax at 8.06, on that odd long and came out at apprx. 10714
Generally I don’t take falling knifes but this morning that’s what I did, looking in hindsight. But I was taking it as a double bottom to 10661 area. And it did bounce.
Fair enough Jack, just so long as you have other reasons than “Oh look it’s gone down X and stopped, must be worth a buy” which I know I’ve been guilty of in the past.
Morning 🙂
Short term eyeing up a S 6132
-50% Re-tracement area
Hi Hugh, as we’ve said before Fibonacci can be used to justify most things. The one I just looked at is, assuming 6100 holds (big assumption), 6445/6100 = a 50% Santa bounce to 6270’s.
Morning all, good day for you yesterday tmfp, nice one. Santa need to get his skates on but it always makes me nervous when others are calling the bottom!
Thanks.
Certainly set up for a Santa Rally, a bit oversold and knocking on support, but you need balls of steel atm, where do you put the stop, or just keep buying?
No thanks, I’d prefer to miss it.
Out of the balance of my short at b/e.
tmfp – “Balls of steel”, not me! But yes, I do keep adding. As mentioned a few days ago my “target” if you like was to be “leveraged” at 6050. “leveraged” for me means I’m up to 2%. Again, I’m not a trader in the same sense as you, just a gambler!
I don’t for a minute think I’m doing anything but gambling chippy, just I have a very bad case of “Gambler’s Fallacy”.
🙂
Morning Chippy – Who’s called the bottom ?
Hi Hugh, Nick’s first paragraph “might be on for 6300 this week” and the IG chart thingy says “the upside prevails”! I remember throughout the August shenanigans the IG thing was saying “the downside prevails” right down in the 5***s!
Seems rather reckless now (!), but if 6100 holds then you never know. Below 6090 and it looks pretty ropey
Not so reckless now?!
Keeping the faith 🙂
To tmfp:
Me too. I know what you are saying. I used to think: it should bounce now.
Actually talking about the bounce. It went nicely from S1 on Dax from 10563. Here you go. But it’s like picking a dot in the sky. It could work but might not. I wonder if any more shorts still to come?
Ill call it at 6100 -bounced off the 1day trend line going back to August (but DYOR). If that gives its not looking too pretty. Come on Santa get a move on – youve about 300 points to recover for b/o this month now !
Could be nerves, but I am out, another 20 points on Dax.
Good Morning All,
I’m long on the Dax 595 – 12 point stop.
taken half for 23 points. rest at b/e as it is a counter trend trade.
Sounds like in my book 🙂 Great!
Since 10.20? That’s when I got out of short.
Yes, I like the (10.15, 10.18 and 10.21) candle formation on the 3 min and took the trade on the 10.24 candle Jack with a 12 point stop just below the 10.18 3 min candle.
I like 18 and 21, not sure about 15, don’t know much about this one. For me only 10.25 basically confirms that little long: exit of little trend line, MACD about to cross up. But I am fascinated how you manage to get earlier. Plus you were also sure it would go up in the first place, great job.
I meant the trio of those candles, that is one of my fav setup formation. I wasn’t 100% sure it will go up thats why that 12 point stop 🙂 but it is one of high probability setups I use. As I mentioned before, I don’t use any indicators apart from EMA. Lets see if it runs or gets stopped out.
Thanks for explaining the trio. I understand it now.
May I ask you, did you take this long based on 9.22-10.02 rise? Or any other reasoning? If you don’t mind me asking.
Yes, it retraced till 10.00 and pulled back but didn’t make a lower low and I saw that formation so took a long. It could well have been stopped out with the downtrend continuing.
Another half of the remaining for 70 points.
Another attempt to get back into the 30’s, if it makes it will be a bit overbought short term but if it spurts to 35+ will probably buy the following pullback.
RJ, I use 3 EMAs, but also MACD – I wouldn’t do anything without it. Plus I need exits of trend lines sometimes. I also have 2 backing indicators which I look time to time (Stochastic, RSI).
RJ (replying for 11.34 post) Exactly. It pulled back and I was in that short hoping for another lower low, and I got out when you got in into long. That’s fun!
There is the last thing to add. That rise from 9.22-10.02 exited the previous trend line which could suggest it’s an impulse for the opposite direction. The retrace happened roughly 61.2% and that’s when I realised that it won’t possibly continue down. But yes, it was an opp. to try long on a risky basis there.
Jack, I just try to keep it simple, EMA, levels, PA and Fibs, I have never looked at MACD, RSI or any other indicator.
You can also see that trio yesterday on Dax 15.18, 21 and 24. I took the trade but didn’t post it made a quick 60 points and came out of it.
Oh Yeah. Quite an useful trio, I’d tell you. I will look into this further. Thank you for advice.
Short 46 10 either way
morning – thought you was to go long?
Just a little formation on the 1min I trade for scraps custard, rsi goes heavy overbought 90+ then the price level retry is lower 74 and fails to break the intermediate level.
Have longed since.
I think 50 is on, might see a bit more buying there too if it breaks.
Only small stakes, I’m a bit “after the Lord mayor’s show” today.
platform stop b/e
out for 6 and long 10 either way
Went long too soon, but I still think the break of 30 was genuine, so longing more around there and stop moved to 24
Making a pig’s ear of this, still waiting to add and removed stop for the moment.
Long added at 24 stop now staying deffo at 12, so 40pt exposure but small (no excuse).
Can’t get with the program today.
long 22.6
Take the money lol
got to be 15 in it!
If there’s 15 there’s more, getting to the 15 is the problem at the mo, especially with them pesky Germans putting in lower lows.
We’re not holding too bad really, last time the DAX was down here we were in the teens.
graspingatstraws#
Taken out half that at 38 so cost of balance is 26 where I’m putting a platform stop and a limit at 46. I need a power nap lol.
GL catch you later.
out for my 15
in 6160
out -10
closed everything for 70 points that will do see if it retraces to 637 again.
short Dax 690 12 point stop
Stop now at b/e
Sticking to the rule..taken half the profit for 30 points and forget about the rest !!
Closed the rest for a nice little 102 points.
Some good trades there RJ …
Still waiting for my orders to be filled on FTSE !
S 6182 & L 5096.
Patience !
Filled and stopped in 4 mins …!
Cant believe we are back at 6100 again!
6100? Upteenth time of trying and it smashed through! What was that rally all about?
Evening,wonder if Carney is regretting his ,”Super Thursday” Ego trip tonight 🙂 he’ll have to get someone to write him some new material at this rate.
Brave long 6072.
As I’ll be out tomorrow morning.
My orders I’m entering are
S 6156 Stop 6170 – Target 6118
S 6198 Stop 6208 – Target 6166
L 6020 Stop 5990 (30 Points) Target 6108 ( 90 Points)
L 5904 Stop 20 Points – Target 60 Points
Thanks Hugh. It worked well today !!