Good morning, I hope you had a good weekend. Greece rumbles on with a make or break week this week. Greece enters what could be a defining week after last-ditch negotiations between representatives of the Greek government and its creditors collapsed on Sunday. The European Commission said the talks in Brussels had broken up after just 45 minutes with the divide between what creditors asked of Greece and what its government was prepared to do unbridged. The focus now shifts to a June 18 meeting in Luxembourg of euro-area finance ministers, known collectively as the Eurogroup, that may become a make-or-break session deciding Greece’s ability to avert default and its continued membership in the 19-nation euro area. “While some progress was made, the talks did not succeed as there remains a significant gap,” the commission said in a text message. “On this basis, further discussion will now have to take place in the Eurogroup.”
US & Asia Overnight from Bloomberg
Asian stocks dropped for the first time in four days after the latest round of negotiations between Greece and its creditors fell apart.
The MSCI Asia Pacific Index declined 0.4 percent to 147.63 as of 9:01 a.m. in Tokyo. Talks in Brussels collapsed after just 45 minutes on Sunday. The latest failed attempt to find a formula to unlock as much as 7.2 billion euros ($8.1 billion) in aid for the anti-austerity government of Prime Minister Alexis Tsipras means Greece has two weeks until its euro-area bailout expires with no future financing arrangement in place. The burden of finding a resolution now shifts to a meeting of euro-area finance ministers set for June 18.
“Grexit fears have ratcheted higher,” said Stewart Richardson, chief investment officer at RMG Wealth Management in London. “Unless one side backs down then it would appear as if Greece has no choice but to default and probably leave the Euro. Losses would be huge, albeit shouldered mostly by taxpayers, and nobody really knows what the short-term or long-term implications will be.”
Japan’s Topix index slipped 0.8 percent and South Korea’s Kospi index retreated 0.6 percent. Australia’s S&P/ASX 200 Index declined 0.1 percent and New Zealand’s NZX 50 Index lost 0.3 percent.
E-mini futures on the Standard & Poor’s 500 Index fell 0.4 percent. The underlying equity gauge sank 0.7 percent on Friday as the Greek crisis overshadowed data showing the U.S. economy continues to gain speed.
Wholesale prices in the U.S. rose in May, giving the figure gains in two of the past three months that may eventually filter through to consumers, helping reassure Federal Reserve policy makers that inflation is progressing toward their target. [Ref]
FTSE Outlook
We have had a bit of a gap down to start the week, dropping 40 or so already from Fridays close. The 30min chart has a fairly decent declining channel with support at 6713ish so I think we will get some support here if we drop to that area. Todays pivot is 6794 so we have resistance there which would also tally with the 200ema on the 30min, so a decent area to short from. The 30min chart has pretty bearish moving averages to start with, the the 10min is trying to rise back above S1 at 6748 as I write this. On the daily, there is resistance from the 10 day Bianca at 6846 – we also have the 20 day Raff here, with the 25ema at 6880 above that. Daily chart is still pretty bearish. If we break below the 6713 area then the bottom of the Bianca channels are more than likely to be hit, certainly the 20 day at at 6690. 10 day is 6672. Still feels like shorting the rallies is the best play at the moment, and we only have a 1.3 dividend this week so nothing to get too excited about!
S&P500
As with the FTSE has left a gap at 2093 from Friday that it might want to close today with some initial bull. We have the pivot at 2098 above that as resistance with 2102, 2110, 2113 and 2116 above that. Support wise, 2084, 2079, 2070, 2068 are the main areas to watch. A rise to 2093 and then shorting from that area looks good.
Morning all.
Feels brittle this morning, 40/42 sort of holding atm but Nick’s 6713 looks a bit of a magnet.
Morning –
Wondering if the GAP on DJI from the Close on Friday may close up to midday & US Open – current price 17844 – tgt 17897 & carry FTSE a little higher (CP-6746)
Might be a little upside here, maybe a look at 60, long at 45 stop 40.
Not happening right out at b/e
Bit flat isn’t it
Have to hunch short it 36 stop 45
Come out of that b/e too, broken the mornings downtrend.
Cant get it right…trying to work out why I am reluctant to stick with a short.
A break of 42 would change things for me.
Didn’t like it, did it?
DAX not helping.
If 32 holds, still a chance of another attempt so a little long at 34, stop 30.
Another fail stop to b/e again 🙁
Really hard to know what it wants to do today I’m leaning short over all (though wary of the Greek rumour mill getting the market excited). 6600s and 6550 are perfectly possible into the end of June/early July.
Nick, “a Make a break session” this week on 18th June, did you mean the massive break to downside to 17000 ish(dow); 6300 ish(ftse)? Or you meant something else?
Weak as gnat’s p*ss.
I watch a basket of indicators/MA’s across 8 time frames, everything is Strong Sell.
Usually means time to look for a long though lol.
Might be worth a small long on Dax. Any progress in the talks may result in a bumper rise today.
Too much volatility expected this week, me thinking of sitting out.
Long dow @ 800. fed interest rate decision this wednesday, expiry Friday, and so on… are you into any trade? Thanks.
closed all my positions friday evening, was looking to sell at 6800, SPX 2097 and hold on until end of the week but now it seems unlikely, unless yanks lift markets up. Looks like DE is aiming 10500 area too, should be a good buy, but again all depends on news out this week.
senu, i was looking to long dow at 17700/11750 area.
Thanks mate. I came out b/e
taken a small long on DOW 17760 will add at 17700 too. lets see
That’s your first arrow Nick, nice one, just trying to work out how I didn’t make any money out of it 🙁
Second one looks a bit unlikely at the mo though, but let’s try a long at 10.
Took 9 yeehaa!
Yes, feels a tad risky now doesn’t it!
trying!
Ive taken half at +10
Until when will you persevere with the balance, stop wise?
Very….
Was looking for that excuse for a rally to stagger to 30 for a short.
No mojo today 🙁
Short at 22
Interesting how reasonably firm we are staying despite DOW
Out at b/e AGAIN 🙁
Dax support at 10966 (fib line) seems to be holding
Cant understand why the Euro is up today?
Nice catch at 6714 even if I do say so myself!
Yeah a good call, but don’t marry it 🙂
The way 30 is resisting, the last hour might see some down pressure, but what do I now, couldn’t hit a barn door today 🙁
For sure. Bounce not bottom I reckon!
Short at 30
and again out at b/e…roll on Tuesday 🙁
Unlucky
Just bad trading, normally I’d have taken 10 on that 30, then reshorted the rsi at 35 and covered on the bell.
Horrible day, made 9 poxy points.
What did you do with your long balance?
FTSE twitchy — about to fall? 😀
Curious to see what sort of close we have – bear flags abound …
BBC report that progress has been made with Greece today.
can you post link – cant see anything?!
On radio at 4pm
mmm … very convenient …
You’re not part of the ‘talk the markets up’ group are you Argyle – nothing on BBC’s business live link http://www.bbc.co.uk/news/live/business-33110762
Maybe it’s the Draghi Effect, he’s talking to an EU committee
http://www.theguardian.com/business/live/2015/jun/15/greek-default-fears-markets-talks-draghi-live
Was listening … but only said deal was needed, not that a deal was very close. Nothing new … no evidence on the wires of any deal as far as I can see … they’re all still digging their heels in.
Heard something myself. Reporter had spoken to one of the negotiators. Nothing concrete, but an expectation that deal would be agreed by Thursday.
4 o’clock ramp team failed … bear flag was the right call … next stop 6600s?
erm, why’s it all going up?
Consensus on all sides that a compromise will be achieved this week. Long on Dax
Short it then
They’ve been saying that for weeks/months
and down it goes
46 pips on the DOW, i’ll take that.
Good stuff.
DOW, DE and FTSE long worked well, nice profit and done for the day. That gap across the indices remain, will close sometime this week driven by some news from somewhere i think.
good one sam. may be from fed news
Strange days on the markets. Nick was expecting 7500 on FTSE this summer a few months ago. The Dax was meant to be heading towards 13000 on the back of QE. Interest rates were meant to be on the rise already. We find ourselves in limbo. When the Greek problem is pushed back another year or decade, which it will, are we back on the continuing rise or is this it. Equities cant rise at the same rate as the last few years. My prediction is FTSE 5500 Dow 15000 by year end.
I like trading gap fills, but am conscious they can remain open for a considerable time before they get filled eventually. The important gap is on the cash daily. Cash high today was about 6762 and the low on Friday was 6760 so technically there isn’t a gap on the FTSE daily. However, there is a gap from the 9pm closing price on Friday at 6782. Having said that there is also one at 6936 from 3rd June that has yet to fill. And yes mustn’t forget FOMC on Weds so could see a move back up for that.
Are you saying Zigzagger the FTSE must rise to these levels soon?
No … they can remain open for some considerable time so there is no reason why they must go back up to hit them. It can also annoyingly get quite close to a gap fill and drop back down again so there’s no definite way to trade these for sure. They are worth remembering and can act as a magnet if the conditions are right for a rise. Chances are we will see the 6900s again over the next few weeks/months, but that’s just my view. I also think we could see 6550 before we see 6950. (Markets may just try to scare the pants off everyone to focus minds for a deal.) The ultimate gap that has yet to fill is 5950 from 31/12/12 which is my conscious reminder that they don’t have to fill, so trade them with care.
The idea of gaps needing to be filled does not appeal ZZ — a random series doesn’t need to comply with our jargon. 😀
gap fills (and I’m talking about 5 minute gaps here and some 2 and 3 minute ones) work best on range days and can sometimes explain why the market moves to a point and then reverses. Recent example:16.38-16.40 two minute candle gap. Market popped down at 17.02 to fill the gap. Random … maybe but I’m not so sure. They sure as hell don’t work on strong trending days but the majority of them do get filled eventually. I only use it like any of the indicators rsi/mas etc as a tool in the box to be used with care and with stops. Also best to confirm a gap with two platforms as you can get misprints. They don’t need to fill … just they often do – like the election day gap – that was a classic.
Not sure I understand to be honest. On IG 71% are long on FTSE. Read somewhere that FTSE must rise by Friday due to contract expiry. Subsequently just put a little long on.
Biffens, any idea on the level it needs to rise to?
Presumably he’s talking about Options expiry and the EDSP auction every 3rd Friday of the month at 10.10.
It usually means a mad 5 minutes with an upward blip of a few points. Three auctions ago I sold the rise and made 80 points in the next fifteen minutes.
He’s the first person I have ever heard of that buys on a Monday afternoon because of it and I’m not aware of any way in which its effect can be estimated in advance.
Agree with tmfp. Suspect that FOMC on Weds will be a more significant event … Markets may move higher into that event. In the absence of news it’s possible that they could move up into Opex. This Friday is a triple witching opex, so the expiry may be more spiky than usual. I think Greece and Fed rate rise estimates however will be more significant factors this week to determine direction.
Apologies Zigzagger for my grumpiness yesterday re filling gaps!
No worries Jim – I didn’t take it personally. I know they’re not for everyone and it’s easy to get obsessed by them – I’m still a believer for the most part – but I’ve found there are days when they work less well – notably Tuesdays and Fridays so I tend to ignore them then unless it’s a range day. The trick is being able to determine a break-away gap (don’t trade) from the rest. Not easy.