Will 6725 hold today?

Good morning, well that was a bit odd, FTSE did indeed drop down to the target level for the longs around the 6745 area, but then stayed there for the rest of the day, disconnected from the rest of the world, namely the US which went on to make and close at record highs. Talk about a disconnect! Unfortunately, as it didn’t actually bounce nor follow the US the stop level got hit at 6736 (it was fairly tight as it was a risky long anyway being counter trend), which was probably just as well as it remained weak overnight. For today I have some support at 6718 and a bounce around here (possibly 6725 though) which exceeds 6750 should give the bulls some cheer. The climb in the US yesterday was yet again fuelled with stimulus talk and no tapering. US data out later today and tomorrow should provide some fuel for some moves. Considering that it isn’t far away I am pretty sure that the US bulls would like the Dow to hit 16000, if nothing else but to generate some headlines and show what a success QE has been/is.

Asia Overnight from Bloomberg

Asian stocks fell and copper rose before U.S. economic reports and the European Central Bank’s policy meeting. Australia’s dollar weakened against all its major peers after disappointing jobs data.

U.S. growth data today and payrolls figures tomorrow may help investors gauge the outlook for Federal Reserve policy after two papers from central bank officials said the level of slack in the world’s biggest economy justifies an accommodative stance. The ECB is projected to keep its main interest rate on hold. Australian employers cut full-time workers in October by the most in more than a year, as traders increased bets the central bank will keep interest rates at a record low.

“It is hard to see where the global economy can surprise significantly on the upside to provide a further leg up for major indices,” Matthew Sherwood, head of investment markets research in Sydney at Perpetual Investments, which manages about $25 billion, said by e-mail. “The markets have bid prices up and are likely to side-trend for a period.”

ECB Meeting

The euro was little changed at $1.3514 after rallying 0.3 percent yesterday and the British pound held three days of gains, trading steady at $1.6071. The ECB will leave its benchmark rate at 0.5 percent today, according to all but three of 70 estimates compiled by Bloomberg. The Bank of England is projected to do the same, a separate survey showed.

The U.S. economy probably grew at a 2 percent annualized rate in the third quarter, compared with a 2.5 percent increase in the previous three months, according to a Bloomberg survey before today’s report. Economists predict data tomorrow will show payrolls climbed by 120,000 in October and the unemployment rate increased to 7.3 percent from 7.2 percent in the previous month, according to a separate survey.

William English, head of the Fed’s Division of Monetary Affairs, wrote that the strategy of not raising interest rates when unemployment is above 6.5 percent has provided effective stimulus, and that an even lower threshold could be helpful. A paper by David Wilcox, the research and statistics chief, says that slack in the economy argues for loose policy at a time of contained expectations for inflation.

FTSE Outlook

ftse 100 prediction
ftse 100 prediction

I have fairly decent support on the daily chart still at this area 6718/25 area and if that holds we could well get a fairly decent bounce to 6760. If 6768 can be broken in the near term then we still could reach that 6810. However, looking at the 10 day Raff its levelling off now so could pretty easily turn down. If 6716 breaks then the bears are gaining full control and we should get the dip down to 6600 or lower before any Christmas rally kicks in. So, basically this area is fairly key! I may just have been a bit early with the long yesterday but it’s in the bull’s hands now as to whether they pack up for a bit or take it to the bears.

170 Comments

  3. Hi all, Just to say thanks to all for contributing, i have been reading the messages for some time and have never contributed before. totally agree what every one has been saying re the disconnect between dax n ftse v dji. have shorted dji through 600.625. 680 and averaged up and got out in the nick of time with some profits. short again at 726 and dax at 40. It looks like a buy for the dji but it really does seem over cooked and it was only four weeks ago we were at 14775. personally i see a decline over the next 2 weeks then a full steam ahead. Looks like the Europeans know something our ever optimistic cousins across the pond dont as it may be a case that the ftse and dax bring the dow back to earth … who knows good luck

  4. FTSE/5 mins. – Yesterday’s downward sloping Raff channel still applies. Series has been hugging the central line but now hinting at a move into the upper track. A bit of upswing is overdue!

  5. Still holding my long from 6748…been so tempted to add around the 6720 area this morning but I didn’t want to make it worse if it broke through the support.

    I do still believe in the bulls, but can’t help but think I will get stung as usual 🙁

  7. i wouldn’t want to be long here tbh. Better to wait and see what happens next. If you want to go long why not be patient and see if there is a retrace. The daily charts are all at the top of their channels. GLA

    DJ – http://chartupload.com/viewer.php?file=24523022520782227107.png
    SPX – http://chartupload.com/viewer.php?file=26125990950548054178.png
    FTSE – http://chartupload.com/viewer.php?file=38712067185300165989.png
    DAX – http://chartupload.com/viewer.php?file=05434060745446165943.png

  17. Bull flag broken. But that T-Line close below yesterday is still not pleasant me.
    AND AS ALWAYS THE BRITISH CONSERVATIVE WAY OF TRADING FTSE lagging in newsflash.
    Good times when I was in DAX, more volatility than FTSE, but a good place to be in these times if you are a daytrader

    1. How did you work out that it will be short, I don’t get it here. If it broke up why did you expected to go down?

  21. tooo tricky to be trading ftse atm, im out on the side lines!!!
    but well predicted by nick there. I was not expecting such a thing.

  22. why people shorting right now?
    Because of US news coming out?
    Isnt bad news good news still, hence the US rise 2 days ago on stimulus?

    1. sorry, is this a reply to me?

      “why people shorting right now?
      Because of US news coming out?
      Isnt bad news good news still, hence the US rise 2 days ago on stimulus?”

    2. Right…weren`t you panicking with your trade not so long ago? Either way Average position is 6788, so I`m happy with my positions.
      Guess will see what happens though.

      1. when was i panicking :S
        Havent been in a trade for some time as i cant find comfortable entries.

      2. Panicking ? I have my trail stop in place.
        And you and all other who predicts the market to go down, without any plausible reason I say it’s only straw.
        Shorting when the way is up is brainless.
        I will be more satisfied if you close tomorrow above 6755 in the weekly close, because that T-Line is still bothering me.
        I will open a bottle of champagne.

    1. man i really dont know how people trading this market right now….its soooooooo fiddly!!! I guess its ok if you already have positions open from several days ago, but tryna make a new entry is crazy atm!!

      1. Yeah, its because I have running positions its more simpler. Otherwise atm for all we know there is no clear top. Best to wait it out

  29. Yeh Hashmash that was not aimed at you…. Dax now 150 points up think we will see 9500 on this before the year end madness! Would love too see how the European Central Bank warrant the rate cut, just show that there policy are not working just giving the banks more money to pump into the skockmarket.

    1. Theres has to be a pullback (at least in my view….just dont know WHERE! – hence why i wont short), looking for a long entry!

  30. Am going to stop trading the Dax think this indice is way to unpredictable will stick too ftse in future.

  34. That’s the 3rd time in just over a week we have seen it lack the minerals at the 6800 level. Along with getting detached from the DJI / S&P yesterday, the FTSE seems to be running out of potassium in it’s diet. (But you never know haha – just throw that in there)

    1. We need a weekly close above 6755 tomorrow for the FTSE gain confidence.
      6755 was the high in 2007.
      The last weekly close was the highest in 13 years and the monthly is 14 years
      So, something is different from last May.
      The people who goes shorting, does not see that. In fact does not have….

  35. Did I not read that institutions were buying insurance PUTS to protect against market falls rather than selling stocks? We seem to have a firm base here…

  39. If you are not short now… Get short lol… Typical exhaustion spike to new highs, same as last time. I managed to get short on SPX at 1775 and DOW 15812 and will be holding these into next week. Im expecting market correction a good few % fall now… FTSE i don’t have a position but will be looking at 6650 / 6600 / 6550 as correction points.

  40. Andy an so with you stopped on my earlier shorts classic double up and some more at the top and will look below 15500 ish on the dow at least possible 1740 on the snp

  41. Nick, Bang on today, though funnily enough the market was faster, it got to 6770 quicker.
    You must have killed it. Enjoy your day off tomorrow

  43. … as PSM said the candles from May are the key!! may even b a double top on the S&P, theres a correction coming but i doubt its a big one as i said before 🙂

  44. I don’t understand why the market has to be the same as May. Though I agree it will drop but only as far as 6600, as we are nearing Christmas rallies

    1. … i thought everyone looked for patterns these days, but in truth it only went down because of big bens taper threats, but theres alway a new reason waiting on the sidelines and this one is going to b fears on the December Taper (which of course are almost certainly b***sht) .. and the market was so pleased with talk of continued stimulus 🙂

  45. DOWN DOW DOWN DOWN. Not taking anything off my shorts, locked and loaded ready for some downside into next week!

    1. DOW is still vey strong and above T-Line all the way. No breaks.
      Everything intact. ANd the trend very strong. I made 15 points, right now from pivot line 15715 to resistance 15730, to test it.
      For the FTSE now I see bad days coming. All small pullbacks in DOW will have an impact in FTSE.
      FTSE has a major problem with that failure swing from May top. The trend remains bearish. I was wrong, thinking this strong uptrend from October was enough to break it, but I had my trail stop to be filled in case.

    1. it reached 6693 and bounced. That T-Line yesterday was for real. And the bounce was to quick for my swing trade

      1. Position closed. Bye FTSE. Until I see that T-line for two days above again, no long for sure

  50. FTSE 4 hrs. taking a breather on the lower rung of the level Raff channel running from Oct. 25. No panic yet. 🙂

  53. Nick, do every link need to be moderated?
    Another tip for you after my modestly well done RGD, is JSJS. They sell a great product which will become wanted more and more in time with ever increasing electric bills. They are also getting their products into many bigger stores now. Still off the radar atm. GL

  55. Luke possibly to 6720, breaking that then small chance we might see 6554. Inclined to go short at 6520 area tbh

  56. Was busy with some work. Excellent day for both long and shorts today. Anybody holding long/shorts for tomorrow. Ahwab your 6650 is not too far. Cheers

  58. So, until I see that T-Line below price again or 6755 weekly close (2007 highs) risk off from #FTSE.

    As I mentioned yesterday the T-Line was a major problem and a bounce was expected, but I was looking for a more slow bounce. Not this one.
    We could see yet one, but now with 2 closes below T-Line I do not think so.

    1. Why ? Are you betting in binaries ?
      A close above 15700 will remain strong bullish, with that price action continued to go up

  64. I am trying to calculate my risk spreadbetting the FTSE if I bet long at £3 a point when the FTSE is at 6000 if it crashed to 0 I would owe £18000 now I am sure that if the FTSE crashed from 6000 to 0 I would have more to worry about than having lossed 18k!

    Anyway stop losses should stop me ever losing this much but there are the potential market gaps meaning I lose more than I have in my account.

    My question at last is what is the biggest historical market gap or even just crash that has happened? I am trying to work out what I am really risking as I consider moving to £20 a point. I don’t mind losing a few k if it all goes wrong but I don’t want to be getting chased for £20 * 6000 = 120k!! How do I work out what I am really putting at risk!

    1. Dave – simple, only put into your account what you are prepared to lose. They can’t take any more than what is in your account.

      1. I am sure they can. Isn’t that what the disclaimer about risking more than your initial deposit is about? For example if I have £300 in my account they let me bet £3 a point so if there was a market gap of 200 points that would wipe out my £300 and I would owe them £300!

        This is the risk I am trying to get my head around what is the likelihood of such a market gap happening?

        1. Thats why they give margin calls. If you don’t deposit more funds they will close trades you have on.

        2. you are absolutely right dave, if market jumps up or goes down with a gap and it exceeds your funds then you have to pay the remaining amout from your pocket! it happened with me when summer walked out of the fed chairman race, market had a big upside gap, i was on short so i lost all my balance plus gone -£54! i had stop in place but it didnt work as it wasn’t guaranteed stop. you must put guaranteed stop before you place a bet to minimize your loss. regarding your historical gap question, i have seen 45pips gap overnight but not sure about the largest ever gap!

          1. I’ve seen 100 point gap of FTSE between 31 December 2011- to 1st day of open in January 2012. Then I told myself: never leave any trades open over Christmas, New Year, between months, and even for weekends.

          2. Cheers. I wouldn’t tend to even leave a trade ovenight so I guess the risk of a several hundered point drop in trading hours is low?

            It is scary if people are spread betting and think they can only lose what’s in their account!

            Will keep trying to find what the biggest drop has been.

            If anyone has any experience of a stop loss being filled way below the level it was set at please let me know?

  72. Can’t wait any longer (6653)!
    To good an opportunity for a retracements in the charts.
    (I hope….)

  73. I posted daily charts for dow dax ftse and spx this morning. I don’t think anyone could see them though due to them not being moderated. My point was each of these indices are very close to the top of their daily trends and longs would be risky imo. Everyone talks of “going with the trend”, but if the trend is up and down, well now is the down time unless it breaks out and starts a new trend.
    GLA

  74. Ahwab ……. respect due to you my friend. You have been calling this 6650 on the FTSE for the last few days.

    1. Yes, thanks Ahwab for that. I have held my position since Monday that is something unusual 🙂
      Shame that I closed all my positions around 6705 should have held on bit longer 😐

  76. Thanks man, I have been desperately holding onto my position for the last week or so, glad I got eventually. I hope you did get that drop?

  78. Good call on your 6359 long, too risky for me. Gl but I reckon you can scalp 20 odd points from it, gl

  79. Dow bulls just keeping their powder dry, as of 7.45pm only 4 of the 30 Dow companies are in positive territory. I’ve had a good week buying the dips so just observing today and waiting for NFP before trading.

  80. Well I was tempted to enter at 6650 for 20 points, but after seeing DOW at 15630ish I thought it was not a good setup. But it seems I was wrong

    2. Agreed. I think too many people trying to buy the dip, just getting killed and making it dip further…

  83. ok so all indices are top of daily charts. If we see a drop to bottom of daily trend then what will the likes of Doomberg be saying for the drop?
    Will be interesting i’m sure.
    GLA

  84. And we see 15601.5… probably see a bit of bull to see ftse touch 6760 again, before overnight decline.

  86. I’m stopped out at b/e – still fancy it though…just for a bounce…

    Resting on the intermediary point on Andrew’s pitch fork for
    any followers of these

  89. The fall to 6650 as expected. A good opportunity to buy the dip. Will watch if it goes to 6600 to add more.

  90. …. NFP tomorrow too low it’s going to beat 125k, it wasn’t so long ago that the “media” we’re telling us how the shutdown had no effect, that being the case there’s no reason for such a low showing, expect north of 150k, watch it rise for at least 1% for a while then dip again 🙂

  98. It’s simple guessing key levels but you have to consider entry points? Personally think rise to possibly 6700

  100. Next key levels are 6600 and 6525. But are buying opportunities for the run up to year end rather than reasons to be bearish.

  101. Maybe this year we’ve had the Santa rally ??? And ftse will slide till year end to 6500 …. You can’t rely on Santa rally !!

    2. FTSE I believe, not other indices.
      As I’ve been saying and saying for long time.
      No break in Top’s May you will be punished hard

  102. yesterday was an excellent day to put on a position for a few weeks and an excellent day trading day especially for the dow so much intra day movement. Said yesterday that was looking for s*p to touch 1740 now revised to 1690 before up turn or santa rally .. Bradley model turn date of around 20th Nov so should be around then. So will be looking to add to shorts on dow on any highs so 675, 700, 725 and 750

  105. WOW, that is a surprise. I went away to Gravity thinking there’s nothing happening, it’s quiet day today and went. Only today I found out about the spike and all that. Maybe it’s for the best cos who knows what I would have traded yesterday.

  106. Well what a nice day yesterday. Held my short from 6770 from over a week ago, to finally achieve my target of 6650. Nice juicy 120 points there :D. Love it when patience pays off.

  107. guru (senu) I have to disagree with you today I think yday was all a headfake … lets see im encouraged by the fact we didn’t go to 6600 quick,, but hey ive been calling it bad and this is probably another headfake.. but im not keen to do anything till after payrolls. jilted !

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