Will 6480 hold today? 6545 resistance

bianca channels
bianca channels

Good morning, well I think we can safely say that 6400 held yesterday. Was a bit annoying that we didn’t get a test of it in hours after that move down overnight on the Chinese data. Was quite surprised it rallied so much yesterday pre Fed meeting, would appear that the market is fairly confident that tapering is off the table for the short term. Anyway, should it start to collapse again then 6422 and 6409 are possible supports. Initially today, if the bulls are to continue this run then we will need to break 6545 which is the top of the 10 day Bianca channel. I do still think that we will get the 6800 year end though.

Asia Overnight from Bloomberg

Asian stocks rose, with the regional benchmark index rebounding from a three-month low, as investors await the outcome of a Federal Reserve meeting after reports showed manufacturing growth accelerated in Europe and the U.S.

The MSCI Asia Pacific Index gained 0.5 percent to 137.72 as of 11:13 a.m. in Hong Kong, with nine of the 10 industry groups on the gauge rising. The measure fell the past two weeks as improving U.S. economic data spurred bets stimulus will be reduced. The Fed will start paring $85 billion of monthly bond purchases when it concludes a two-day policy meeting tomorrow, according to 34 percent of economists surveyed Dec. 6 by Bloomberg.

daily raff channels
daily raff channels

“With signs of recovery worldwide and stronger economic data, optimism has seemingly returned ahead of the key U.S. Federal Reserve decision due later this week,” Tracey Warren, a Sydney-based trader at CMC Markets Stockbroking Ltd., said in an e-mail. “With last month’s positive payroll data and the economy continuing to show signs of growth, some believe that imminent moment could come as soon as this week’s meeting.”

Euro-area manufacturing reached a 31-month high in December, led by Germany, a survey from London-based Markit Economics showed yesterday. U.S. industrial production climbed in November by the most in a year, a sign factories are bolstering the world’s biggest economy, a separate report showed yesterday.

Futures on the Standard & Poor’s 500 Index slipped 0.1 percent today. The gauge yesterday halted a four-day losing streak, rising 0.6 percent.

Fed policy makers have scrutinized data and watched Washington’s budget negotiations to determine whether economic growth is robust enough to withstand the withdrawal of some monetary support. The House of Representatives last week passed a budget that limits automatic spending cuts and avoids another government shutdown. The Senate is expected to vote this week.

The Fed has said it won’t cut stimulus until it sees signs of sustainable economic recovery. Unemployment has since fallen to a five-year low and third-quarter economic growth was stronger than forecast.

FTSE Outlook

ftse 100 prediction
ftse 100 prediction

As with the S&P I wouldn’t be surprised if we have a fairly flat day of consolidation today, with a pull back to one of the fib levels, most likely 6480 which is the 38.2% line. Today’s pivot is 6491 as well so support at approximately this area (6480/90) is likely. There is a distinct possibility that yesterday was just a bull trap so loading longs on the pullback zones today should have fairly tight stops just in case. Its worth noting that we are at the top of the Raff channels, and pretty much bang on the 10 day, so I think an initial drop is most likely. Should we hit the top of the 10 day Bianca and 20 day Raff at 6545 I think that would be a good place for a short.

The short trade I alerted yesterday obviously didn’t work as that was quite a charge yesterday though at least the stop was fairly tight so damage was minimal. Trending days such as that one don’t work well for support and resistance plays!

The fed will be coming even more into focus now as the meeting starts today till tomorrow, with the taper news likely due on Thursday.

83 Comments

  1. Still seeing bears dominating the market (im not running any positions as its very risky, my strategy showing bears but mentally im bullish soo id rather stay out the market)

  2. I make 6450/6475 as wave 2 buy zone… If this holds we should see big wave 3 up possibly, all depends on our USA friends….

  5. Im also staying out as want to stick to my trading plan which also states DONT trade announcements.will take a few days off and observe the market.

    1. ill trade on announcement, soon as i see markets jump or if i hear bernanke say no tapering im entering a long (big risk i know but lets see).

      1. Yeah, sitting this one out too, bud 🙂 Just waiting on the sidelines in anticipation of what I have got to say 🙂

  7. Maybe the markets escalated yesterday to get a better position to short for Wednesday because they know a free fall is coming… only a thought

  8. Do any of you agree that a small taper would still ring a rally? Certainty being more important than the money itself? A big dip then huge reversal and vice versa of tapering delayed or unclear. I think they will confirm how much and when tomorrow bringing a rally

  10. Lots of fun on here today…amazing what a profitable day does for peoples temperament! Agreed with hashmash yesterday and remain convinced – long positions added around 6500 can make money but keep tight stops. IMO tomorrow should bring certainty which is generally good for markets. X2WLT makes this point above. Difficult to see markets tanking whatever is said….unless it’s gibberish of course haha

    1. Des, I am not in the market anymore i closed my long at 6524 and i didnt let me 6500 execute…i mentioned it yesterday.
      Im not trading right now as i have no clue wtf to do, my strategy is bearish…but mentally i feel to go long so thats why im out the market, its state of confusion like this that makes me lose money especially when my account is all time high makes me overconfident!

  11. OMG it’s Bernanke, (Santa)this is my Christmas wish, for once please do not let Ben spin his regular bs. Still stuck in my long, survived till 6400 so don’t intend on letting up. I guess being in a trade already is some comfort as opposed to those who want to trade on the upcoming decision.

      1. 6506 -.-, so you can imagine the 1. relief I got as I losing quite a bit. 2. Frustration as i opened long too early. Oh well, 6800 is my target for year end. I try not to look at comments on here as it makes me cringe with regret, as I prefer day trading. But will be perfectly happy if I get my money lol.

          1. Why not? Did you see or not see the 100 point rise in a single session yesterday? 6800, give a week into the New Year. Each to one`s own I guess.

  13. Hashmash – missed your post re unfilled order at 6500 and didn’t realise you were out of the market. Your posts make great reading and right now I’d say you’re being disciplined. Well done. I’m in a trade and making money so obviously I think I’m a big swinging dick….but feel free to take the piss tomorrow if (when?) the market tanks!

  14. On the basis of 1 hr. views and trusty indicators I’m expecting a buoyant, if not bullish 🙂 , day for the Dow and S&P 500.

    1. Bear in mind though that the 5 day SMA on the S&P 500 has just fallen below the 30 day SMA… just some food for thought… 🙂

  15. I have FTSE on a 30 min.⬆ ϵ-channel from 12 December. Looking for more definite progress towards 6550 this pm.

    2. my strat still bearish, hasnt budged at all today…..i guess if i do trade then its going to be an instant decision on the announcement, ill go short without a hesitation (not too big) if tapering happens as my strat is portraying bearish view as well.

  16. I’d say based on the huge gains the dow and S&P have made this year, the fed have some play with knowing it will fall after they introduce tapering on Thursday . Dow will fall sharply fir 2 days … Santa ralky starts on 23rd …. Fir a year end which will still be huge

  17. I’d say based on the huge gains the dow and S&P have made this year, the fed have some play with knowing it will fall after they introduce tapering on Thursday . Dow will fall sharply fir 2 days … Santa rally starts on 23rd …. Fir a year end which will still be huge

  20. I’d say based on the huge gains the dow and S&P have made this year, the fed have some play with knowing it will fall after they introduce tapering on Thursday . Dow will fall sharply fir 2 days … Santa rally starts on 23rd …. For a year end which will still be huge .

  25. I think will put a buy stop tomorrow at 6600 before the announce. This price will invalidate the last 2 swing lows

  28. For me everything is pointing to a drop tomorrow….dont have the balls to trade before the fed meeting cus these announcement can be very dangerous!
    like ive mentioned..if i do trade tomorrow then it will be purely based on the announcement

      1. Hey it really depends.
        1. My strategy is bearish right now and has been. so if i hear tapering AND I SEE market drop instantly then im shorting as fast as i can.
        If no drop (maybe due to a much smaller taper then i’ll short a very small amount)

        2. If no taper and a big jump then ill be more cautious and long a very small amount in hope that maybe my indicator is lagging and may reverse on a big bounce in market.

        This is really risky trade for me tomorrow as its purely on what fed say..ill be more comfortable with a tapering happening, but the question is how will the market react if the tapering amount is much smaller than $20b.

      2. cash will be closed but futures are open, but will be less liquidity hence the vol on these days :(…i like volatility when im profitable in a short position, fastest profits there HAHAHA

    1. loool i doubt ill post straight away…will be under too much pressure because the markets will be all over the place.
      I’ll def post it “IF” i trade and when the markets are abit calmer….will provide screenshot if i do trade before people start saying oh u traded after the move blah blah 🙂

  30. Really hard trading the indexes today..
    First thing 8.00am
    Went long on CAC @ 4100 as a buy the dip, to protect short on FTSE.. Mistake
    CAC ended the day at 4068 32 points loss
    I’m equal stake on FTSE short and CAC long, so would love to see a rally……

  33. Closed my ftse longs and am out….zero momentum today and no longer convinced we won’t see falls in advance of tomorrows announcement

  35. The ftse has a lot further to rise. At 6810 anyone would have jumped at the chance at 6500. Nothing has changed in the interim. I am long now from 6500 at half my usual stake. If it drops 100 points or even 150 this would be a great mid term entry. If it pops though you may miss most of the gain to the upside. Risky I appreciate but I believe the market wants the certainty and the excuse to keep going. Watch for the swings both ways. I am always dubious re the initial move. The move happens before the news can be digested so be careful jumping in if you see it fall or rise 50 points. That may not be the right direction. I am trading risky tomorrow but with low stake but be careful all. Bloody Fed. Let’s have the tapering and a proper plan then we can start to look at earnings etc!

  37. Ah man cant wait till friday.. soo itchy! Feels like free money going long.. then u actually think about it..u realize u dnt know shit lool. Hope i can keep my discipline tmrw like i did today.

  38. Japanese Nikkie 225 up over 200 points open…so much for caution and waiting on the sidelines for Fed decision tmrw!!! They say one thing..but do another!!!

  40. Hashmash Fed decision is at 7pm tmrw not 7.30pm…CNBC will break the decision at 7pm….so is 2pm ET…Bernanke questions and answers session is at 7.30pm, which is 2.30 ET..guess you wanted to offload/unwind your HUGE positions before we caught on!! Lol.. 🙂

  42. Japan closes 310 pts up, up 2%….CNBC says ‘cautious trading’ AHEAD of the Fed decision tonight…they must think we are all inebriated…still got my short open at a small loss…£295 down…hope it tanks later…the 30 min,1, 2, 3,4 hr candlesticks were all over the place…giving clear short signals..in the end were all ‘false’…

      1. … although technically speaking it may mean that the up trend is drawing to a close with a reversal is on the cards or a move sideways 🙂

  44. One ‘flag’ (one indicator) on the daily to go LONG on the DAX… hmm 🙂 … just noticed it is already up 55 points lol should have posted earlier lol 🙂

    1. PS my own interpretation (anyone’s lol ) of the ‘indicator’ would be to go SHORT lol … but there you have it lol 🙂

  45. Ahahhaha ray i saw it a couple hours ago its at 7.. thanks ! I wudve been mad sitting at 7 thinkin announcement is at 7.30pm thinkin wtf is happening? Information leaked 30 mims before!!!! Hahah

Comments are closed.