Will 6000 FTSE 100 hold | Asia Down 4th day | Brexit leave in the lead

Support 6026 6018 6015 5996 5989
Resistance 6047 6077 6082 6171
Good morning. The bulls didn’t really get much of a look in yesterday, and the latest poll put the leave camp ahead 53% to remain 47%, which helped the bears drive the FTSE 100 down from 6275 to 6220 as the poll results were released. There was a bit of optimism on the S&P with our 2090 long making some points, but apart from that, it was bearish across the board as Brexit jitters spook markets. You would think that the remain camp would point this out as a reason to stay!

US & Asia Overnight from Bloomberg

  • Latest polls indicate British voters favor leaving the EU
  • Ten-year yields sink to record lows in Australia, Japan

Risk aversion prevailed in markets, spurring a fourth day of losses in Asian equities as the U.K.’s upcoming vote on European Union membership fueled anxiety ahead of central bank meetings in the U.S. and Japan. The pound fell with oil, while sovereign bonds rallied.

An MSCI gauge of Asia-Pacific equities slipped to a three-week low and sterling resumed losses as new polls indicated more Britons favor leaving the EU than want to remain. The yen strengthened against all 31 major peers and yields on sovereign debt in Australia, Japan and New Zealand sank to records as haven assets attracted investors. U.S. oil extended declines below $49 a barrel, while gold retreated from near a four-week high.

Gauges of expected price swings in global stocks are surging and institutions including the International Monetary Fund have warned of dire fallout if the U.K. becomes the first country to leave the EU after a June 23 referendum. Monetary policy reviews by the Federal Reserve and Bank of Japan this week are adding to the potential for volatility in financial markets.

“The market is trying to price in Brexit and as a result there’s a flight to safety,” said Kelvin Tay, regional chief investment officer at UBS Group AG’s wealth management business in Singapore. “We’re now moving into a crucial period before the vote itself. Things are just going to get volatile from here on.”

The Fed begins a two-day policy meeting on Tuesday, with the futures market indicating zero chance of an interest-rate hike. The odds of a move by July have dropped to 16 percent, from 53 percent at the end of May. About 28 percent of 40 economists surveyed by Bloomberg predict the BOJ will expand its record monetary stimulus as soon as June 16, while 55 percent forecast more easing on July 29.

U.S. data on Tuesday are forecast to show retail sales advanced in May for a second month, indicating consumers are becoming less apprehensive about spending. Industrial output figures for the euro area are also due and the U.K. will report on inflation.

Stocks
The MSCI Asia Pacific Index fell 0.8 percent as of 1:07 p.m. Tokyo time, contributing to a four-day loss of 4.5 percent that marks its steepest slide since February. Australia’s S&P/ASX 200 Index dropped to levels last seen in April as trading resumed after a holiday on Monday, while Japan’s Nikkei 225 Stock Average slid to a two-month low.

The Nikkei Stock Average Volatility Index climbed to a three-month high after a similar measure for U.S. equities surged 23 percent on Monday, the most this year.

The Shanghai Composite Index declined 0.3 percent, after tumbling 3.2 percent on Monday, ahead of MSCI Inc.’s decision on whether to add China’s domestic equities to its global benchmark indexes. HSBC Holdings Plc estimates inclusion would initially spur inflows of as much as $30 billion.

Futures on the U.K.’s FTSE 100 Index declined 0.4 percent, after the gauge lost more than 1 percent in each of the last three trading sessions. S&P 500 contracts were little changed, after the U.S. benchmark fell 0.8 percent in the last session. U.S.-listed stock of Baidu Inc., China’s biggest Internet search engine, slid more than 5 percent in after-market trading as the company cut its sales forecast.

Currencies
The pound weakened 0.6 percent versus the dollar, approaching a two-month low. Four opinion pollsfrom three separate companies have put the campaign for Britain to leave the EU in front of the ‘Remain’ camp. The prospect of so-called Brexit actually coming to fruition pushed one-month implied volatility on the U.K.’s currency to levels last seen in November 2008, at the height of the global financial crisis.“Everything is about Brexit right now,” said Richard Falkenhall, a trading strategist at SEB AB in Stockholm. “Speculative accounts have added onto long dollars and long yen positions. At the same time people are adding to shorts in the pound and in the euro. When you watch the polls they’re tighter than they’ve ever been. So there is a lot of uncertainty out there at this point.”

The yen rose 0.2 percent, approaching a one-month high. Against the euro, Japan’s currency strengthened for a sixth day.
The dollar reasserted itself against some higher-yielding currencies, with New Zealand’s dollar falling 0.5 percent. The Bloomberg Dollar Spot Index, a gauge of the greenback versus 10 major peers, was little changed for a second session.

Bonds
Japan’s 10-year bond yield fell to an unprecedented minus 0.175 percent, Australia’s dropped as low as 2.05 percent and New Zealand’s slipped below 2.50 percent for the first time. Similar-maturity U.S. Treasuries were little changed after a five-day rally pushed their yield to 1.61 percent, the lowest closing level since 2012.

The cost of insuring Asia corporate and sovereign bonds against non-payment rose for a fifth day, the longest run of increases in 10 months, according to prices from Westpac Banking Corp. and data provider CMA.

Commodities
The Bloomberg Commodity Index fell 0.6 percent, retreating for the third time in four days. The gauge has rebounded more than 20 percent since sinking in January to its lowest level in a quarter century.

West Texas Intermediate crude dropped 1.1 percent to $48.34 a barrel, falling for a fourth day ahead of data on U.S. oil production and stockpiling. It reached $51.67 last week, the highest since July 2015.

Gold declined 0.3 percent, snapping a four-day rally in which it gained more than 3 percent. Zinc in London slid 1.2 percent, extending Monday’s retreat from a one-year high. [Bloomberg]

FTSE 100 Outlook and Prediction

FTSE 100 Prediction
FTSE 100 Prediction

I was expecting that late break of 6030 yesterday to yield more bear points, but the bulls ended up defending it pretty well, only allowing the bears to get 6016 as the low, before bringing it back up to above 6030. Could be a bit of a make or break day for the bulls today, as if this 6000/6030 area does break then a fall to 5500 is distinctly possible over the summer. Pretty likely too if the leave camp win the referendum. For today I have gone for a bit of a positive session, with a rise to the pivot at 6047 initially, with 6077 above that, where we have a declining 30min channel and also R1.The bottom of the 10 day Bianca for today is 6018 and we have 20 day Raff channel support here too. The daily RSI(10) is also just moving back up through 30 (so shaking off a bit of oversold conditions) which is why I am thinking we might get a bit of a rise. I don’t think the bulls will be in charge for long though as the overwhelming trend and feeling is bearish. As resistance we also have the 100 Hull moving average on the 2 hour chart at 6082. If we were to break that 6080 area of resistance from a few different timeframes then 6170 is the next area of note. So, looking at the 6020 area as support, 6070 and then 6170 as resistance.

139 Comments

  1. Morning.
    It’s really just “How low will we go” right now, getting oversold but by no means a naked long just on that.
    Get short on bounces and run it is the only sensible trade imo.

    It may be my ISP Nick but I’m getting various messages “Server took too long etc” this morning.

    1. Yep, got them too. Moved to TSO Host and still having problems. I miss my super duper managed server that it used to be on 🙁

      1. Apparently TSOHost had a DDoS attack this morning which slowed everything down on their network. Great 🙁

        1. Hi Nick,
          just hang in there with them, unfortunate DDoS attacks
          are rampant everywhere at the moment.

          1. Yep, once i found out that was the problem I know it wasnt their fault, or my website, or the infrastructure.

  2. Morning all.
    Lots off successful shorts this am, but a couple of losses looking for a bounce at various points. Keeping my stops in place (thx tmfp) so no major damage.
    I don’t have much in the way of intermediate levels below 6000… thoughts?

    1. You certainly chose a good time to start trading full time mate 🙂
      I can’t see any justification for longing this morning so just be patient short and cover a little if it gets very oversold.
      Just cos it’s going a bit mental don’t put pressure on yourself and start fomoing, there’s always another trade and it’s the ones you don’t do that will be the good ones.

      I just covered a bit more at 80 because I like it in the bank. Think about trailing stops too, to lock in profit.
      GL.

      1. Cheers mate, Yeah that sounds like good advice about the ones I don’t do (or shouldn’t) – I give back too much on weak probabilities!

        And there was me worrying about a quiet summer!

  3. Blimey Nick I’m reading your comments and I’m a Bull and even I can’t see it getting much above 6000 at the moment….

  5. Just closed my little short from 6017 at 5962……. Something funny is happening…..my fingernails have turned into claws and my hands are very hairy :0)

    2. I’m looking at the weekly Ftse chart and we seem to be at a support level around 60? Anyone got any views?

      1. Plus on the 3 min Ftse it looks abit like a double bottom but I’m not good with charts?

      2. If you look long enough there’s always something that will support a preconceived view. The longer term charts aren’t really relevant to the next 20 or 50pt move intraday.
        What support do you see on the weekly?
        All I see is 7122 down to 5500 and a failed 50% retrace to the 6300’s.
        There’s no previous low support until 5500 and it’s not oversold.

  8. Morning guys, I missed the trading this morning as was out for a meeting.
    What to do here, maybe a small long in 50s and then short the bounces until DOW time?

  9. Little long at 62.
    Looks like my timing on the Brexit binary was a bit awry. Now that the mighty tome, The Sun, has come out in favour of Brexit!

  10. By the way, the personalised number plate and black swan prophesy seems to be coming true tmfp!

    1. Yeah, spooky isn’t it? Hahaha..

      To those who are looking for reasons to long Ftse, I’d rather miss a rally myself.
      It may work out, but if you long now 65ish, where do you stop it?
      Just because a knife’s stopped falling for the time being, doesn’t mean you can’t still cut your fingers.

      At least if you longed say 72/5 on a stop there’s the slight technical justification of higher highs and maybe a bottom formation based on 60.

      This Brexit situation is a drip feed Black Swan event, the only possible impetus for upside would be a switch around in the polls, which ain’t going to happen imo.

      1. Very good point. Wondering if we’ll just wallow until the Dow now…
        If it does hit 50 I think I’d still be tempted with a wee long with a 4pt stop, but I guess the only reason for a bounce is technical…

  11. 5960 represents about 50% retracement and 5850 around 61.8%. If I recall correctly, I seem to remember 5850 provided good support a few times when FTSE headed towards the lows made a few months ago.

    1. True, you can keep measuring fibs like Russian dolls, a move within a move.
      The only reason I think the bigger picture trumps the shorter term one is the fact that we have been having lower highs and lows for a year now and this move is a continuation of that.
      If it finds support around 5900 then an optimist might say there’s a reverse H&S forming. That won’t confirm for at least a month imo, but could well do so when the Brexit thing has been digested.

      Back to today, that break to 76 wasn’t very convincing, but shows enough signs of life to take out nearly all my remaining short on the pullback to 67.

    1. and stop now to b/e, I know it’s not technically good but if it gets up there again it could well continue on a bit before a pre DOW dip.

  15. tmfp’s and smokinaces’s 5800 on the cards today….My horns have snapped of now :0)

  17. Any other bears about to hold my paw…….not been out in the woods on my own before……bit worried about the hunters with the shotguns….:0)

    1. Ok, Yogi here….
      Re guns, got a target for the shorts?
      Dare I even ask about a st*p?
      What’s the plan in shorting a few points above the lows of a 350 point down move?

        1. Sorry tmfp I missed your comments here…..well I just thought to myself who would buy shares in the 100 Ftse companies at this point in time….I would wait now till after the referendum…..personally I don’t think we will be coming out of the EU so I’m thinking hold shorts till the referendum then go long again after all the indecision is off the table…..I think it could fly up then 6400 ish……just my thoughts and prediction mate not based on charts or anything…..don’t really understand how we can use charts with this brexit business going on…..stops , yeah just don’t ask hey !

      1. Yes that’s what we are hoping for, don’t think it will cross over 75 may be 80 and then short here again.

      2. Oooohhh now I’m scared……two of the biggest baddest meanest bears I know are long…paws over my eyes time!!!!

        2. Anstel – it won’t be a big spike, we need a solid news from either the UK or yankies to push us north but again it will be very limited maybe 80 for today.
          We are just scrappers and have stop losses in place so if it goes the other way around, the loss is easily recoverable!
          GL mate.

        3. I think I just took some lead to my butt as I scurried off but it doesn’t hurt yet………

          1. Cheers chaps I added short at 77…… Not used to shorts but I need to practice……..got to go need to dodge some more buckshot :0)

          2. Yes, I noticed you have quite a high pain threshhold anstel.
            A friend of mine has a numb leg from a bike crash. He also has a hi level exhaust on his new bike and stopped because he smelt something unpleasant, then found out he’d burnt a hole in his leg.
            Moral
            Pain=bad, to be avoided.

          3. Thanks tmfp…..it’s a bloody good job my exhaust on my dirt bike is tucked up under the side number plate panel…..otherwise I’d probably burn my bloody legs off….:0)

  19. Bear in mind that the DOW hasn’t like gapping down for too long, a rally to unchanged should drag us to 80+.

  21. Had another go….added to 62 long at 80, put stop at 71. If it rattles up to 6000 then I’ll trail it.

  24. Let’s not get too excited chaps, today is 6020-5960-5990 = 50% bounce.
    DOW not really doing anything yet.
    Possible further replay of yesterday, slight strength till our close then melty melty?

    1. well 80 is broken now so I am not afraid of 90s anymore lol, I bloody shorted 78 and closed it for -7 for some reason but now running a short from 89 and it’s very heavy!

          1. Good man Rick……I love it when people beat the market…….Rock on mate…brilliant:0)

    1. Well, doesn’t look like a bounce is coming anytime soon, bears everywhere now.
      Bloody bounce to 90 was just a joke, If I am right then today is a carbon copy of yesterday and if we do get a nice bounce to let’s say 65/75 then I believe we will be down to 5930/5925 atleast just like yesterday after we close, what are your thoughts on this tmfp?

      1. Wouldn’t argue with any of that.
        I’m all out, didn’t catch that 90 bounce anything like hard enough and now lost rhythm, doubt whether I’ll do anymore today. Nice and blue, don’t want to spoil it over unpredictable scraps.

        1. Fair enough, I am looking for a last short of the day for MHH that’s it for me today as well.

    1. your shorts are giving you some nice blue ink mate?
      I need to learn something from you as well, which is how to hold bloody longs!!!

      1. Just think to yourself…..this isn’t going to kill me and say b*llocks to it..probably not a technical answer but that’s what I do…..I think people get a little bit too scared and put too tighter stops and get repeatedly stopped out……trouble is when I have to bail out of a position I take some bigger losses than I should…..I think somewhere there is a happy medium but I havnt found it yet……

      1. Best bit is it can take all bloody day to get 40 points long on Ftse but you can nab 40 points short (if you get it right) really quickly and then go and enjoy some of your heartbeats for the rest of the day doing something else instead of watching the screen all day and half the bloody night :0)

  29. Well, here we are in 30s. I was expecting this after our bell time but unfortunately bears couldn’t wait for this. I think I might just switch off now just like tmfp, don’t really know what to do here tbh.

  30. Well MHH and an attempt at a rally off 930, the pace of the fall seems more like long liquidation than heavy shorting, so would think it would be pretty short lived, may get up to 50 ish.
    If I had any of the many shorts left, I’d probably be happy with 40 for today, wouldn’t rely too much on late selling for new lows.
    But I haven’t 🙁

    1. Lol, good stuff, just remember it’s not real till it’s taken 🙂
      Look at the DOW, this run down to 10 is hapless ftse long liquidation, I just grabbed a token long for the bounce.

      and took 16, who says you can’t make quick money long lol

      GL. Don’t stay up too late 🙂

      1. Cheers Buddy thanks, have a great evening…….got to go…..apprentice bear in training……and it’s feeding time again :0)

      1. Going to put size on and if I can get a break even stop up it I can then add size maintaining an equal level of risk…..might all get stopped out on a spike but let’s try it….

        1. Only adding smallish size at a time in case it bites before I get the protective stop on it….

          1. Just want to get this 16 protected need a bit more breathing space before possible next short…these bloody claws of mine are making a right bloody mess of my keyboard :0)

          5. The little bugger it’s going to attack my 26 by the looks of it…….get down shep…

          6. Short again at 16.7….. As before next plan to get it protected then rinse and repeat to coin one of tmfps phrases….

    1. I’m here,avoiding Europe and the U.S open and scalping a bit in their afternoon is the plan,not looking good today though.

      1. Hi bud,,,,well I just figured I wouldn’t buy any shares as an investment before brexit so thought it would keep dropping if it’s mainly sellers….I can see 5500 here as it approaches the 23 June….then could be time for a long…..made a right cock up last thurs and Friday though….I thought it would drop soon but tried for one last long and ended up taking quite a big hit…..still it’s a learning curve….I hope you are doing well….not seen you on here much recently….just added small at 23.6 but think it’s took my 26 out. Oh bugger….

          1. Looks like the same MO as last night….a push up last thing to throw a curved ball then dropped the next day…maybe?

          3. Oh apparently the quote was something like……the lady she protesteth too much…”amazing what you learn while trading….

          4. Well I guess see what it does at 680.
            When it got up through the 50% retrace earlier I thought it might push up a bit before all that potential pumping tomorrow.Got that wrong.

          5. It’s funny ……pretty much no real buying pressure on Ftse all day…….then last thing low and behold some big green candles………it’s my guess it’s one of two things…..institutional buying……or bankers BS…not sure which and as tmfp rightly says I’m not an economist so it’s just a guess……I’m going for bankers BS :0)

          7. Yes I don’t think rates will get touched after that very convenient 38k jobs report…….which could well give the market an injection of positive sentiment.but I think brexit top trumps it….sticking to the plan…..for now….

          8. Oh well Dow came back a bit for the close and tomorrow is another day.See you when the dust settles a bit on Wednesday.Have a good evening and morning.

    1. You know…it makes me laugh how it goes up and down…..nothing’s changed…..rates weren’t going up anyway and brexit is still just around the corner…:0)

      1. Anstel was oversold, Selling pressure started last Thursday there was no real poll news too late friday, the poll news accelerated the selling but reality is its still too close to call & if the leave party win there is a 2 year negotiation period.

        1. We won’t be coming out of Europe mate……unfortunately….it’s all smoke and mirrors….

          1. Anstel your right but still think the leave camp will win the vote, and then the government will play the we have a stronger card to go back and get a better deal for the UK.

  40. Everything’s got a bit oversold, a mild rally is pretty much on the cards.
    All it needs is one poll to come in with a 10pt swing to Stay and there’s +100 straight away.

    1. It’s quite interesting to note that this FOMC meeting is 8 days before the brexit referendum………gives it a nice shove up..just to confuse matters……my money is on a drop back down later……very clever how it all pans out….very clever indeed…..

    3. true this could try at any point of a sniff of the remain party taking the lead again and with so many polls each day one will come out that say the undecided are favouring the remain…
      Was surprised at cornwall where they do receive vital aid from the EU, with 7 out of 10 voting out.

      1. This is an emotional vote, not practical. Cornwall’s full of Good Old Days retirees who want to see Britain Great Again.

        1. was mixed age groups, Tmfp said 2 weeks ago this vote was going to be close, should of took you advice and tried to work some kind of arb out with positions against betting odds but bookies have started to close odds now.

          1. Ok, but knowing that part of the world, it’s a fairly sort of widespread feeling to be independent down there. Also, I haven’t drilled down through the demographics but I’d guess that the young Stay vote is more metro AB, whereas Cornwall and other rural they are in short supply and more likely to vote Leave.
            I know farmers who’ve got new Range Rovers off the back of the CAP who are voting leave…..

    1. See you later matey. Did you take some blue around the teens or are you still running?

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