Trade levels, help with trading and spread betting, support, resistance, prediction

Support 6065 6056 6046 6045 6000 5993
Resistance 6089 6095 6163

Good morning. Another very volatile day trading around the 6100 level, however still only reaching 6075-6125 extremes yesterday. This is obviously becoming a key support/resistance level and a significant break either up or down must be very close by now. With six straight sessions of falls we may well start to see the start of move up into the Christmas period. However, with the Fed interest rate decision on the 16th, most bulls will be waiting till then. Sector wise there were no real strong trends with most sectors lower and a few special situations shares bucking this trend.

US & Asia Overnight from Bloomberg
Asia’s benchmark stock gauge headed for its biggest weekly drop since September as investors awaited data on Chinese retail sales and industrial production over the weekend.

The MSCI Asia Pacific Index was little changed at 129.75 as of 9:07 a.m. in Tokyo, on course for a 1.8 percent decline this week, a third weekly drop. The gauge is down 5.9 percent this year as a rout in commodities and slowing Chinese growth weighs on the earnings outlook for companies from Sydney to Tokyo, before a Federal Reserve decision next week on whether to raise U.S. interest rates.

“A cautious start to Friday is expected,” said Tony Farnham, Sydney-based strategist at Patersons Securities Ltd. “Traders are now looking ahead to the Chinese retail sales, industrial production and urban fixed investment data due Saturday and, a little further afield, to next week’s FOMC meeting.”

Traders now see a 76 percent chance the Fed will increase interest rates, with U.S. policymakers expected to confirm the world’s biggest economy is strong enough to cope with the first rise in borrowing costs since 2006.

Japan’s Topix index fluctuated, as did Australia’s S&P/ASX 200 Index. New Zealand’s S&P/NZX 50 Index advanced 0.5 percent and South Korea’s Kospi index added 0.3 percent.

Futures on the Hang Seng Index gained 0.3 percent in most recent trading, while contracts on the FTSE China A50 Index fell 0.2 percent. Chinese stocks retreated on Thursday amid concern the government’s efforts to make domestic consumption and services a bigger part of the economy won’t be fast enough to offset sluggish demand for industrial goods and commodities.

China Data
Chinese retail sales will probably rise 11.1 percent in November from the previous year, after an 11 percent gain the month before, according to the median estimate in a Bloomberg survey of economists. Industrial production is expected to advance 5.7 percent, up from 5.6 percent in October.

The billionaire chairman of Chinese conglomerate Fosun Group has become unreachable, Caixin magazine reported on its website, citing people it didn’t identify. Fosun’s stock tumbled more than 11 percent to $1.55 in over-the-counter trading in New York Thursday, the biggest decline since August.

Futures on the Standard & Poor’s 500 Index added 0.2 percent. The underlying equity gauge rose 0.2 percent on Thursday, halting a three-day slide, as energy shares climbed for a second session and airlines advanced. [Bloomberg]

FTSE Outlook and Prediction

FTSE 100 Prediction
FTSE 100 Prediction

We could have a fairly flat day today (famous last words!) and it looks fairly pivotal that the 6050 support area holds, otherwise we are looking at a dip to 5993 I feel. We have the bottom of the 10 day Bianca channel here, and also the 20 day Raff so its probably worth a long with a tight stop. The 6050 area is showing as support on the 10min channel (albeit declining), a 30min channel (also declining) and also the 100 Hull moving average on the 2 hour chart. Todays pivot is 6089 so we will probably have a bit of resistance here, though 6100 is stronger resistance, despite the fact that the bulls will be desperate to close the week above this level. After yesterdays bearishness, I don’t think we will be pushing too high today, though 6250 is the 25ema on the daily chart for swing short territory. It appears I was a bit too gung ho with my comment on Wednesday that we may see 6300 this week! It will be interesting to see if the 6050 level holds as support this morning, and if it does then we could spring up form here next week, as the daily RSI(10) is now at 27, the level last seen on 15th November when the FTSE tested 6000.

69 Comments

  1. Morning chaps, all raring to go again.
    Fairly big short for me av 73 this morning atm stop at 92. My feeling about 50 is temporary support, being slightly reinforced by every bounce off it (like the current one), so I took a little out, but I’m looking for it to ultimately fail this morning and a dip down to 20/30 before the DOW.

      1. No, it’s a mish mash of big number, sort of previous low and swing low which doesn’t really look sustainable.
        If I was a Master of the Universe hedge funder I’d be thinking “one big push here and it’ll fall over”.
        Mind you, always look to buy when it’s looking at its worst….
        I’ve got to go and do my Friday duties shortly, so I’m putting 1/3 stops at 66, 74 and 84, limits 35, 30 and 20. No heroics.
        Have a good day. 🙂

  2. Hope you find this useful:

    An approximate horizontal trend is broken down. A continued weak development is indicated, and the index now meets resistance on possible reactions up towards the trend lines. The index has broken down through the support at points 6110. This predicts a further decline. In case of positive reactions, there will now be resistance at points 6110. RSI is oversold. This shows that the momentum of The index is weak and that the price may decline further in the short term. We should see a rise in RSI before this is seen as a positive signal. The index is overall assessed as technically negative for the short term.

    1. Technically negative! This is the 5th straight day of red ink. You can tell that from looking at a chart for 5 seconds. You don’t need to look at any indicators to tell you that.

  3. Morning all
    Less nervous now as no one seems to be calling the bottom! Hope your man flu is better, tmfp.

      1. Morning all,Thanks for the link.
        Looking at City as an Indicator they have claimed around 80% long net client exposure on the FTSE all week and currently have 87% long Net client exposure indicative of 11 December 2015 at 10:12AM which is pretty amazing and should be very Bearish,however on the Bull side they just published an article on the S&P saying,”long term chart points to a potential correction”…. so mixed signals…expect computer problems galore if 87% of their clients are right about Santa. 🙂

        1. Hi WSF, I think the “position” analysis on City and IG isn’t a nett of money but of positions. So if there is a short of £2 and a long of £2,000 it’ll show 50/50 if you see what I mean. I’m happy to be corrected!

          1. 🙂 Hi chippy,currently,”87% UK 100 DFT (Long) 51% Wall Street DFT (short) 57% US SP 500 DFT (short)
            Net client exposure indicative of 11 December 2015 at 11:13AM.”I’m not very serious about it as an Indicator,never looked up the way it is compiled,but statistically most people are wrong and they make a profit,so 87% on the Bull side whether that is money,or clients would be pretty Bearish and if the majority,in whatever form,are really Short then that is a lot of trouble to take over the presentation and implies they think people do trade it as an Indicator and do what it says the rest are doing,but it still stands as a contra indicator.They have had Long at around 80% since Sunday night ,so Shorting that signal would have worked all week.I’ll try and remember to keep an eye on it relative to the Mkt when it is over 70% or so,usually the 50’s is the majority when I notice it.Take your point about stats though 🙂

  5. Morning all

    Distinct lack of xmas cheer at the mo. All my long equities have been stopped out for breakeven. Unsurprisingly my Morrisons short is doing the business. That shop really is rubbish.

    Will the rally start on the 16th like last year? I have a long order at 6008 in anticipation.

    Anyone know of a free FTSE cash chart with candlesticks? Not spreadbet charts. Doesn’t matter if the data’s delayed by a day or so.

    3. Dan, Curious to know how they stopped out on break-even if they never managed to get into positive territory?

      1. Thanks Hugh and WSF. I’ll check those out tonight – work computer doesn’t like charts!

        Anton, I opened them last week. LAND for example was opened on 4th Dec at 1196, climbed 35 points to 1230 then fell back to breakeven. Same thing with Intu. After showing so much profit they feel like losses!

        1. I see. I made a bit of money on LAND as well. It got up about 30 points from entry and then fell back. Decided to exit with 20 point gain. Interestingly, they had a lot of support around 1190-1200 area. It just broke down. Would you be tempted to go short when a critical support area breaks after exiting the long? Or would it likely come back into the previous zone? How long would you say it needs to stay below previous support (in terms of end of day prices) before that that support line now becomes resistance?

          1. Who knows Anton! The market is dragging it down, rather than any instability in the share itself. It’s out of its range, however, I wouldn’t short LAND as I think it’s a pretty decent company. They sell office space in London which cannot be hard to make money from. Its NAV is also higher than the share price so its trading at a discount. A good one for the long term.

            Let me know if you get back in.

  6. Thanks guys, where is this going hey. Falling like a feather. Trying not to catch falling knives but surely with Xmas run around the corner it’s going to find consolidation soon.

    1. Hi Coombsy
      “Where is this going?” –

      Some thoughts flashing across my mind
      Time to start building a small list of “Possible Good Opportunities”

      Yield Stocks
      The yield on some of these big cap stocks is – RDSB 8.09% – VOD 5.35% – NG 4.72% – Always like IUKD – the big question is if the likes of RDSB can continue paying such a dividend with Oil at these prices. Even if they cut it it would still be respectable. Focus on compounding returns…

      Capital Preservation – The hangover may be worse than first thought…Hedge out “if necessary” but it’ll dilute any returns.

      Any the wiser – me neither.

      1. That short interest site is great Hugh. Thanks for that. I usually just download the raw data in an excel file from the FCA website, but that site is way more user friendly.

        Just checked out IUKD. I don’t normally touch ETFs, but I’m interested. 820 looks a good entry.

          2. Hi fellas

            IG, City Index and Finspreads all offer IUKD. Best spread is on City and Fin. Or through your SIPP via HL.

        2. Hi Dan,
          Yes the IUKD is good.
          Whilst individual equities can be good – to be honest – for us minnows – your better off spreading your risk into funds such as IUKD.
          Another I like is RIT – ticker RCP
          Also ELTA – ElectraEquity – but this has gone up alot. But it’s worth having a look at their site as they have some interesting investments.

    1. O good, I came out of my short which took at 1.43 by a big misjudgement, it went 30 points up but luckily didn’t reach my stop and I made 20 points on the go (added on top with tight SL). Well, didn’t like my trading today. And now it looks that I should have held after all. Ridiculous trading from me today.

  10. FTSE is heavily under performing the Dow since November. The last time FTSE was around 6000, the Dow was around 16000.

    1. Actually my analyses was correct after all, I should have jumped in at 2.11 short, but I had closed another short by then and didn’t want to re-enter.

      1. Interestingly I went long 307 on Dow with my typical 10 point stop. Closed half of it for 70 points. Leaving the rest at b/e, with strong downtrend it might as well get stopped but will just leave it.

        1. Done my last trade for today for another 16 points (half stake) from 10295, it was just a random guess. Doesn’t feel right trading against the trend on Friday afternoon. Whatever Xmas rally is anticipated it’s not an excuse. I was terrible today, didn’t recognize another 2.45 entry, just went against the tide. But after all it was a fun session for 27.5 points profit (full stake) in total today. So I leave it here. Good weekend.

          2. RJ, we never know. Most important is that we make profit on the way. Whatever happened it’s just a decision, it will quickly fade away.

          3. Hi Jack, I don’t regret that’s why I take some profit and leave the rest and its upto the market to give me more or stop me out.

  13. See the trio and take it everytime !! Long Dow 336. Half profit out for 30 points and rest at b/e. Last trade of the day..Have a weekend all !!

      2. Hi Hugh,

        If you look at the 3 min chart, candle 16.00, 16.03 and 16.06 is what I call the trio formation. Everytime I see it, I take a trade on the retrace with one condition that my SL is no more than 15 points. In this week, I had 4 instances on which I took the trade and been profitable all four times. This one got stopped out b/e for half my position but anyways managed some profit.

        When you find making money hard in the market, you are trading against the trend as I find it today !!

        1. Hi RJ thought you had gone,it’s a classical pattern in Candlestick charting : Morning star or Evening star, the name depends on whether it is Bullish or Bearish.

          1. Thanks WSF for the name. I haven’t read about them, its just my observation looking at the graphs so gave it a name myself 🙂

          2. 🙂 If you can get a gap,so the Doji is isolated then (apparently) the success rate is about 80 % that is an Orphan not a star as such.Have a look at HSBC, ticker HSBA day chart,Sept,Oct,Nov and you can see it there.It is a good thing to have spotted,well done this week.Have a good weekend. 🙂

          3. Thanks RJ.
            I don’t think I’d have the time to sit and watch for those !
            Unless it could be programmed up.

  14. Hello any of you diehards still watching. That rather dragged on, only just got back, missed the fun. And I so nearly put trailing stop on it too….. 🙁
    But hey, feel good about what you get, not bad about what you don’t. 🙂

    So, what to do now at 5940? Buying’s still falling knives, it’s not particularly oversold on the daily, but shorter term it’s got a +100 bounce in it, but from where?
    Sell it?
    This is the lowest weekly close for two years.

      1. Hi tmfp,think everyone is waiting for something to turn the Dow,maybe someone putting a bit of a fear price into Oil and Metals ?

        1. The way I see it technically, if the DOW loses 17000 then that’s a run back to 15500 and maybe 5200 for us.
          That’s also a huge double top.
          Metals and oil are going down because they aren’t being consumed. Interest rates are zero because there’s too much money not being spent. Probably time to ‘rebalance’ the indices like they’ve done in the past. What’s Glencore ever done for us?
          Could there be a Rescue Squad Intervention? There already is, it’s been sub contracted out and called QE.
          I’m glad I only day trade.

          1. I still cant see them letting it go in an american election yr,based on history,and I think the Over Supply price doesnt have a fear factor.I’d guess ISIS are payed not to disrupt anyone,so maybe an Incident that appeared to be them on a Sunday night.I seem to remember the first Gulf thing kicked up mkts once it started.I cant see any reason not to keep trying to get the day trading reliable thats for sure 🙂 thanks for the inspiration.

          2. Re: US politics. The case could be made that continued Democrat rule is anti business, as defined by dinosaur GOP attitudes, and that a stock market plunge/ recession wouldn’t do any harm to the election chances of a “pro business” authoritarian right winger.
            Like Trump.

            Re day trading, I’ve been looking back at today to see what I missed: That 14.00 break of 6000 screamed SHORT, as did that bullsh*t run up to 83 just before our close.

          3. That step pattern does look like a day of people selling into support,although it’s all week really.On the 4hr it goes back to last Thurs,4hr shows S/L’s above and below round numbers getting taken out I suppose.U.S party politics …Trump chasing that kind of voter is unpleasant,but Bush and the Born Again vote was too.Obama kept the Bush advisors,is all anyone needs to know,pretty sure he did steal his original slogan from Bob The Builder too,only he never had Bob’s sense of mission.

          4. Robin was in the fertilized egg business. He had several hundred young ‘pullets’ and only ten roosters to fertilize the eggs.
            He kept records, and any rooster not performing went into the soup pot and was replaced.

            This took a lot of time, so he bought some tiny bells and attached them to his roosters. Each bell had a different tone, so he could tell from a distance, which rooster was performing.
            Now, he could sit on the porch and fill out an efficiency report by just listening to the bells.
            Robin’s favorite rooster, old Butch, was a very fine specimen, but this morning he noticed old Butch’s bell hadn’t rung at all!
            When he went to investigate, he saw the other roosters were busy chasing pullets, bells-a-ringing, but the pullets, hearing the roosters coming, would run for cover.
            To Robin’s amazement, old Butch had his bell in his beak, so it couldn’t ring. He’d sneak up on a pullet, do his job and walk on to the next one.

            Robin was so proud of old Butch, he entered him in the local Show and he became an overnight sensation among the judges. The result
            was the judges not only awarded old Butch the “No Bell Piece Prize,” but they also awarded him the “Pulletsurprise” as well.
            Clearly old Butch was a politician. Who else but a politician could figure out how to win awards by being the best at sneaking up on the unsuspecting populace and screwing them when they weren’t paying attention.

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