Watch 6602 today…. if broken 6630… if not then……..

Good morning. Well yesterday was a bit dull after the initial dip down to the pivot area. That long just sat there till the close pretty much! I think it’s in a wait and see mode waiting for the Fed next week and what the future holds for QE and the tapering situation. Normally slow grinds higher like this are on the retail money coming in, which usually means we will see a reversal soon. we are back at that 6590 level, having held fairly steady overnight and if the bulls can break 6600 then I expect 6627 still. The daily channels are still heading up now so despite the rise being weak yesterday, there is still a bullish trend. To invalidate it, same as yesterday, we would need to drop below 6550. It looks like the Syria situation is calming down, I expect there has been rather a lot of back room deals and meetings going on the past couple of weeks. UK unemployment fell 0.1% yesterday, apparently fuelled by a boom in estate agent hiring’s! With house prices rising the rhetoric has started about another bubble etc and its needs to be capped, “help to buy” needs to be canned, but I think the bottom line is that whilst prices are rising, people and lenders are probably a little bit more cautious this time round about over extending themselves with overleveraged debt. You’d hope so anyway!

Asia Overnight from Bloomberg

Asia’s benchmark stock index swung between gains and losses after Japanese machinery orders accelerated less than expected and as investors await the outcome of the Federal Reserve’s meeting next week.

The MSCI Asia Pacific Index was little changed at 137.67 as of 12:20 p.m. in Tokyo, trading near a three-month high. The measure, which swung between gains and losses of 0.1 percent today, climbed 6.6 percent in the past 10 days amid signs the global economy is improving. The rally drove the gauge’s 14-day relative strength index, an indicator of trading momentum, to 67, near a threshold of 70 that signals to analyst shares may have risen too far.

“We’re in wait-and-see mode ahead of next week’s Federal Open Market Committee meeting,” said Mitsushige Akino, chief fund manager at Ichiyoshi Asset Management Co. in Tokyo. “While the situation in Syria has calmed for now and China looks like it’s seen the worst of its slowdown, buying after the Olympics news seems to have run its course and the yen has stopped weakening, making exporters less attractive.”

The Federal Reserve has said any reduction in stimulus will be tied to a sustained recovery in U.S. employment. The central bank will decide to cut its $85 billion in monthly bond purchases when it meets Sept. 17-18, according to 65 percent of economists surveyed by Bloomberg last month.

U.S. Futures

Futures on the Standard & Poor’s 500 Index lost 0.1 percent. The gauge gained 0.3 percent to a one-month high in New York yesterday as diminishing concern over a military strike against Syria offset Apple Inc.’s biggest decline since April after the company introduced a cheaper iPhone.

Outlook

ftse 100 prediction
ftse 100 prediction

The same 30 minute channel is still in play with the bottom area holding yesterday, despite dipping slightly below the pivot. We have a narrowing triangle in play though so there will shortly be a break one way or the other, and with Dax, S&P near resistance, and gold near support, I’d be inclined to say a break lower. That triangle is formed by the rising channel, but there is also a declining red trend line with resistance at 6595. The question is where to go short from? The best bet is probably fade some in at 6602, 6625 bearing in mind the resistance levels mentioned below. I am also hoping we get a dip back in gold to the 1353/54 area as that will be good for a long I feel. On the FTSE I feel a short off those areas mentioned for a dip to 6550 is on the cards. I have plotted the arrows with the rise continuing as we are only 10 away from the daily pivot at 6579, and the EMAs are currently positive. Shorter time frames are a bit messy and confused so whilst there may be an initial dip, I think the bulls will still be in play initially.

36 Comments

  3. Short on dax 8503 and ftse 5598…. Have closed ftse for 25 points leaving dax open for a longer time frame. Good luck all

  4. A good dip and rise from the ftse, I think we might see something similar happening on the DOW, 350 points in 3 days…. I`m sure some people will want to sell their positions…

    1. I noticed that as well couple of times. When he predicts rise but it’s selling all day and only starts rising at the end of the day – wait a rally the next day. LOL

  6. Jack not sure if that was meant for me enter at 6598 closed at 5975….. Just my dax open now will leave this running.

  7. Today is one of those day when I have heard the biggest shit analysis for a long time and all on Bloomberg. The guy was analysing FTSE and in his opinion its so up because the UK economy is doing so well so it doesn’t really matter that there are still some problems out there!!. I remember only in January, when we all thought we may still get triple dip recession, the same moron was saying that we shouldn’t look at the UK economy as FTSE is packed with companies exposed to all the other economies….. Its just makes me wonder, where does Bloomberg or CNBC finds those idiots??!!!….but then again, its America and if one person believes that cats can fly then shortly after there is thousands of them following that views

  10. Well back after a few months break. I had been trading full time with hardly a break for over two years and I needed a rest. I went long for a sunny and warm summer and got paid off.

    So now ready to share my thoughts again.

    So you know how I trade here it is. I trade FTSE and DJI using daily and weekly charts. My indicators are Fibs and on the daily 8 and 21 ema. My max trade is £10pp (very very rare) usually £3 or £5. I never trade against the trend. My risk management profile allows me to make a small profit on 4 right out of 10 trades. 6 right allows me to make a living.

    I always work out my stop loss first.
    I never trade without a stop.
    I never “average” a losing trade. Do not let anyone tell you it is better than Stops. You will get burned badly.

    So the question at the moment is whether this up move in the USA wants to test the yearly high at the 15650 area? My fib and 8 and 21 ema tells me not to short at present. I have missed all the up moves so am waiting and watching.

    Stops are always your friend.

    Safe trades

    1. Welcome back NR169..I have been missing your thoughts. I have a question for you. With the stake size that you mentioned what should be the account size and how do you calculate your stop loss ? Is it fixed for every trade you make or does it vary ?

      1. I think that account size against stake size is a matter of discipline. If you cannot take losses and are not prepared to place stops then a large account balance is a dangerous thing. A 10k bank is not much use if you let it all go!!. I move funds in and out depending on the index. So for the DJI at £3 a point looking for a £300 return against at £150 loss I will make sure I have £600 max in the account.

        Regarding stops. If I cant see a natural point to place a stop then I wont place the trade. I will be looking at fibs, open and closing points from previous days and weeks.

        Hope that helps

        1. Really happy to have you back here, NR169. I missed your advice on stop losses and I always found your advice on that fresh and necessary. I started putting stop losses and it changed at least the volatility of my account. Before when I ignored stop losses I usually let the losing trade to spiral waves against me. Now if I am wrong I can get a several losses in a row but it doesn’t wipe the entire account out. It’s annoying but I need to learn.

  11. DOW looks like it could keep up forever looking at the 4hr chart. Still looks bullish, ftse drop was just a flash in the pan for those who were alert

  13. I like your trading analysis NR169. Spot on. This game is more an endurance than a quick sprint.I have been trading 5 years and still for the life of me cannot figure out how newbies on this forum are trading at £100 point on the FTSE. I usually trade small stakes as well, except in Jan/Feb this year when I broke all my cardinal rules and finally averaged down to about £68 p on the ftse. Worst mistake ever. Lost a fortune! Ftse wrong-footed EVERYONE when it went straight up after Xmas from 5900 to 6365 in 1 swoop. Now back to stakes at around £3 to £10 on FTSE depending on obviously how strong or weak the ‘casino’ is. 🙂

  14. Ray people who say they do 100pp bs, like that mahmoud, if they were doing 100pp why would they be on this forum for…

        1. I don’t get these people who claim they have nailed a £50 move at £100 a point and then they are posting next day at 7am either. If I had made 5k in one day I would probably treat myself to a lie in.

  16. Thanks for your thoughts NR169, Javed, Ahwab, Ray and Al. Sorry if i missed any regulars. All very useful info. Last few days on Dow have been a good reminder of some cardinal rules including dont fight the trend, always having stops and risk management. If only I stuck to them myself! Break even 2 days and small loss the third. Psychological damage plenty. I’m going back to basics. Good trading to all. I read somewhere you should treat a loss like a best friend and remember them always. It’s true to say you learn a lot from your losses…

    1. Interesting reading here as a newbie to indices . I put a short on the DOW today at 15320 …. It will probably fly now but reading all the news and state of world affairs
      the bubble will burst again IMVHO any views would great .

      Cheers Marky

  17. The best way to determine trade is to backtest your strategy and see whether you can cover the extremes. Of course that will mean you will feel overcapitalised at times………but as mentioned by others this is a marathon….the time in the market is more important then the time you go in the market. I am currently trading 10-15 pounds per FTSE point but that is spread across 3 or 4 indices at a time. Backtesting my strategy over 10 or 15 years suggests the biggest annual loss loss I should incur is around 450 pounds per FTSE point. So I tend to have a max leverage of 14 but usually lower.
    Not saying it is ideal and I’m sure many here will have better measures. Btw isnt it time brokers offered a Var calculation to aid their customers?

  20. Short on dow 12 per point from 5277 down 900 pounds at one stage last night still holding on would like a bit of a tumble. Hope it is not thinking of leveling up with dax

  21. Yesterday’s early ‘up’ signal for 1hr Dow has now expired. The pause continues; the overall trajectory at present is slightly negative.

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