Good morning. Nice to have a day without Greece hogging the headlines with will they won’t they stories, making the trades actually work out a lot better. The pivot long took a while to get going but did in the end (at least got a few off that rise) though the 6749 short was a bit lacklustre. Think the markets are relieved that Greece accepted the deal though remains to be seen if the Greek parliament accepts it today.
Greece (from here)
Greek Prime Minister Alexis Tsipras started his pitch for a bailout that’s sparked a revolt in his own party and is struggling to get off the ground as international officials ask new questions about the country’s finances. Tsipras’s comments set up a day of parliamentary maneuvering that threatens to rupture his coalition. Still, opposition lawmakers are likely to back the package at a plenary vote scheduled for about 10 p.m. local time Wednesday.
“We are looking at all the instruments and funds that we could use and all of them seem to have disadvantages or impossibilities or legal objections,” Dutch Finance Minister Jeroen Dijsselbloem, who chairs meetings of his euro-area counterparts, said in Brussels.
Ratification must also be secured in six other parliaments, among them the German lower house, or Bundestag, which will be reconvened on Friday from its summer recess.
For now, attention will focus on Athens as Tsipras tries to steer the measures past his coalition of Syriza and the Independent Greeks. Discussion will begin at committee level at 10 a.m. and then move to a plenary debate at about 2 p.m.
US & Asia Overnight from Bloomberg
China’s stocks fell for a second day after better-than-expected economic data failed to boost investor confidence in the world’s worst-performing equity market and more companies resumed trading.
The benchmark equity index has declined 25 percent over the past month, the biggest loss among 93 gauges globally tracked by Bloomberg, as margin traders unwound bets after a 150 percent rally by the Shanghai Composite over the previous 12 months. Gross domestic product rose 7 percent in the second quarter, government data showed on Wednesday, compared with economist estimates of 6.8 percent in a Bloomberg survey.
“There’s a lack of confidence in the market’s sustainable rally after a big rout,” said Jimmy Zuo, a Shenzhen-based trader at Guosen Securities Co. “There should be a visible improvement in the economy and corporate earnings to bring back solid investor confidence to the market.”
Economic Data
The GDP data was unchanged from the first quarter and was in line with the government’s annual target. Industrial output in June rose 6.8 percent, while fixed-asset investment increased 11.4 percent in the first half, beating estimates, the National Bureau of Statistics data also showed. Retail sales increased 10.6 percent in June, topping a median forecast of 10.2 percent.
“The GDP numbers are really good,” said Bernard Aw, a Singapore-based strategist at IG Asia Pte. “The better-than-expected GDP reading suggested that Beijing may take its foot off the pedal on more stimulus measures for the time being. This will affect sentiment in the stock market.”
Rate Bets
The probability of the Fed raising rates at its September meeting slipped to 27 percent, down from 35 percent on Monday, futures data compiled by Bloomberg showed. For December, the odds of a hike fell to 63 percent from 69 percent. Fed officials in June forecast the central bank would raise borrowing costs twice this year.
FTSE Outlook
So today we are back to all eye on Greece and if they approve and except the most recent bail out offer. The Greek finances really are in a pretty dire state and we have the IMF wanting to stand on the sidelines too. “The dramatic deterioration in debt sustainability points to the need for debt relief on a scale that would need to go well beyond what has been under consideration to date,” said the IMF in a confidential report. The document amounts to a warning that the IMF will not take part in any EMU-led rescue package for Greece unless Germany and the EMU creditor powers finally agree to sweeping debt relief.
I expect we will get a choppy day today as we try and second guess the next twist in the Greek Odyssey. We have had a pretty decent bull run this week so far off the back of the decision Monday morning, to the point where things might be argued to be getting a bit overbought. As such we may have a bit of a pull back today, and a bigger one if the Greek parliament throw out the deal. I imagine they will approve it though as they don’t have a vast array of options!
Todays pivot is 6738 and I think we will dip to this level today. As I write the 10min chart is showing a drop from 6765 as a potential trade but probably easier to wait for the moment. So, dip to the pivot then back up to the top of the 20 day Bianca at 6787 I am thinking. We also have some resistance at 6800 – the 200ema and top of the 20 day Raff channel, as well as the declining bearish T3 trend line. Bears might use this as an entry point also. The US is holding onto its recent gains, with the S&P testing 2114 (R1) overnight, with he possibility of 2122 today.
Sell the bounces morning for me so far is working out all right.
Looking for a test of 6720 then 6705.
6752 for the reload?
38/42 will do me atm 🙂
Depends how you view the pivot, whether you think it’s now resistance or this is just an overshoot on a hold.
Catalyst for downside would be the Greeks using IMF’s (totally realistic imo) attitude re debt forgiveness as an excuse for a conditional acceptance of the ‘deal’.
Well, looks like it was a pivot hold then lol.
Short average 50 stop 65, reduce it a bit on a visit to the 40’s I think.
There’s a bear in here somewhere, just the timing as usual.
Definitely feels that we’re due a retrace. Momentum is declining on the hourly suggesting it either needs to pause or do a retrace. If we can hold below 6750 for a few hours then we should see more downside. Oh – and there’s a nice gap at 6738. I just know the market often likes to try and go higher 2 or 3 times before giving up so can’t rule out a move into the 70s/80s, but there’s more chance of downside methinks. Same view on the S&P.
Moved my stop to 73, give it a bit of wriggle room, also coincides with b/e on the morning should it trigger.
But it won’t lol.
Will drop now its taken your stop!
Lol, in the nick of time, or just another 8 points down the drain? That 10 pt rise was purely ftse, Dax didn’t move, curious.
Still hanging in there Nick, I refuse point blank to buy at this sort of rsi 🙂
Thrown another 8 at it and that’s my lot.
Looks like a carbon copy of yesterday so far.
Wow, a NINE point drop, first for three hours…Light at the end of the tunnel, or an oncoming train?
LOL, saw 10min RSI(10) drop through 70
There goes 6738 as predicted.
Yes, got my eye on it too. A break of 60 would be good, <50 even gooderer.
After staring at red ink for so long, my sensible head tells me to take a small profit on 1/3 of the short at 44.
So I will.
Neither DAX nor DOW interested in our weakness at the mo.
Morning All
Going to try and do some multi tasking today
– I just haven’t got the time to watch the screens.
I’ve put the following orders in
Short order in at 6771 – no limit
& Another position…
Long at 6778 (Cam Break out) & Limit 6811 (R3)
Good luck Hugh — I’m rather ‘tied up’ this morning too — 😀 .
RSI_10 (100 ticks) has fallen back to touch 50. I think we should get some turn-up from around here; 6750 — waiting on that.
Your 71’s looking rosy Hugh 🙂
Thanks – Saw that it fired off – just closed here 6750…lucky eh ?
Good judgement mate.
I’d have been selling with you but fired my bullets too early.
Heres a prediction. Big spike when greece passes some laws followed by a big drop
just like after the referendum last year. I’m thinking a short from the 6850-60 area
Could be – but I’m wondering how much this is baked into the price already. I’m favouring a bit of a retrace of this up move before another move up to ultimately 6950. Just not sure how low it might go first. Might need some sort of panic – eg if one of the Euro Parliament’s refuses to pass the bailout.
Nice holds on the 2 min downtrend line.
How about this scenario?
Greek parliament are unlikely to vote before we close, so some well timed tweets about rebellions and such like while the debate is going on get everyone in a lather and my original game plan for today works out?
🙂
Not trading this …too slow for me but..
Trend Reversal – possibly here ?? – 53
Stops at 41 or at 47 perhaps
Impressive – 6755 !
Yeah that 2 min downtrend lasted well but looks like it’s gone, but still holding on 3 min. Stopping my remaining short at 58
Stop not needed, profit taken at 48 🙂
+token long for divi
took 10
What a tiring day, give me hundred up fifty down days anytime
Cheers all
🙂
Reasons to be bearish (possibly). Just spotted this interesting correlation between the TSI crossing zero and the 5 and 8ema crossing under the 34 ema. Chart is 2 hourly. The last 4 times it’s done this it’s led to a bit of down movement. (I’ve put vertical lines on the TSI crossover and the 5/8ema crossing under the 34ema to show the connection.) 34ema is currently at 6722 and 5/8ema at 6753. Unless we get an explosion to the upside (which can’t be ruled out) we could see a crossover Thurs/Fri. TSI is curling down and there’s negative divergence on the RSI10. TSI still has a bit of work to do to get to zero.
http://s172.photobucket.com/user/zigzagger2/media/2015-7-15_LCG_51158_zpsosrfuiny.png.html
And there’s my test of 20, just three hours late. It’s all in the timing….