Will 6766 break today, open up 6785?

Good morning. The bulls managed to hold onto that support level at 6714 yesterday but despite best efforts were thwarted at the 6766 level. It was a bit of a tricky one to call early doors yesterday and it did look like the 6766 level would break, which is why I didn’t SMS the short there – felt a bit too risky. Overnight prices have hovered around 6750 so not too much downside yet, though most are waiting for Fridays payroll news before starting to load up long or short.  I think today will probably see a break of the 6766 level, to reach 6783 (top of the 10 day Raff) and possibly 6807, as will probably be the case tomorrow as well. Friday will be more volatile and I think we will be back to good news is good and bad news is bad. Decent jobs news out of Germany yesterday (reduced unemployment) certainly fuelled the Dax bulls.

The top of the 10 day Raff on FTSE, Dax and S&P isn’t far away, being 6783, 9580 and 1843 respectively – thus possibly limiting the upside potentials for the moment.

Asia Overnight from Bloomberg

Asian stocks climbed for the first time this year as Japanese shares rallied on a weaker yen before the release of Federal Reserve minutes. Gold fell a second day while natural gas advanced.

The MSCI Asia Pacific Index rose 1 percent by 3:22 p.m. in Tokyo, after dropping to a 2 1/2-week low yesterday. Japan’s Topix (TPX) climbed 1.8 percent. Standard & Poor’s 500 Index futures and FTSE 100 Index contracts were little changed. The yen depreciated against all its 16 major peers, and South Korea’s won rose from an eight-week low. Gold and silver declined at least 0.5 percent, while natural gas added 0.8 percent.

Minutes of the Federal Reserve’s last meeting and a private report that may say U.S. companies added workers will be released today. Data may show German exports rose for a fourth month and factory orders increased, while unemployment in Italy climbed. The International Monetary Fund plans to raise its forecast for global growth.

“The situation in the U.S. will continue, it will pick up steam, so we might expect growth to surprise on the upside,” Bill Maldonado, the Asia-Pacific chief investment officer for HSBC Global Asset Management, said in a Bloomberg Television interview. “As long as Europe doesn’t drop back into recession, developed-market growth will be very good news, especially for North Asia because export demand is going to be crucial to those economies in 2014.”

Fed policy makers said last month they will taper monthly bond buying to $75 billion from $85 billion. They will probably reduce purchases in $10 billion increments over the next seven meetings before ending them in December, according to the median forecast in a Bloomberg News survey.

FTSE 100 Raff channels
FTSE 100 Raff channels

U.S. Jobs

The S&P 500 advanced 0.6 percent yesterday as the U.S. trade gap narrowed 12.9 percent in November to $34.3 billion, smaller than economists projected and the least since October 2009, Commerce Department figures showed.

The ADP National Employment report will probably show private payrolls in the U.S. rose by 200,000 workers last month, after gaining 215,000 in November, according to the median of 36 economists’ estimates compiled by Bloomberg. The Labor Department releases payrolls data on Jan. 10.

“The U.S. trade figures and the IMF’s plans to raise its global economic growth forecasts show that the world economy is on a recovery path,” Hiroichi Nishi, an equities manager in Tokyo at SMBC Nikko Securities, a unit of Japan’s second-biggest lender, said by phone. “The outlook is for U.S. fourth-quarter earnings to be favorable, and the expectations are also strong for Japanese company earnings.”

FTSE Outlook

FTSE 100 Prediction
FTSE 100 Prediction

So onto the FTSE. I expect that we will break that 6766 level today, in fact while I have been writing this email we have climbed off 6750 to 6760. I expect that we may see a bit of a stumble at 6785ish though as we have the top of the 10 day Raff there, and with the S&P hitting the top of its 10day Raff also at what will probably be after a similar sort of rise, the bears might put in an appearance here. downside could be limited though as I think the market wants to price in decent jobs news and there is still a lot of “buy the dip” going on, as we saw yesterday.

If 6785 does hold as resistance then a dip to 6747 (daily pivot) and 6736 looks likely, before probably rising again. I do still think we will see higher prices yet and the Bianca chart is currently flagging 6827 and 6892 as potentials. The weekly chart still looks good for an ultimate 6950.

If the bears really get going today and break below 6736, then next support after that is yesterday’s low at 6715. A break of that changes things and could lead to a lot more downside. Initially today on the 30 minute chart the EMAs look good for an initial push higher.

87 Comments

  4. big swing in my indicator (relative to the movement in market), pullback is here – my prediction

      2. well tbh i would say pullback doesnt always mean DOWN..
        it means a movement against the current trend…
        soo right now by pullback i mean down (as the markets have been bullish)

        1. Thanks.
          That’s exactly the point. Pullback can mean Up or Down and I thought you might be thinking up so I just wanted to double check. 🙂

          1. Pullback means down. Throwback means up. This is my understanding of the english terms.

        2. in stock market term it does mean just that….the market goes UP or DOWN there is no other direction and even if it is a trend it can only go in one direction at the time..

  5. Well it looks pretty bearish, little bit of a bounce off the 6736 but soon gave up. Yesterdays low at 6715 now in sight I think…

  7. Pullback means down. Throwback means up. This is my understanding of the english terms.
    Tell me if I’m wrong

  9. 4 hr channels running from 27 December still pretty flat, i.e., horizontal. Just have to wait for a breakout, which could still be upward. See 6710 on the hourly chart as key.

  12. Long from 6724 for while now…eveytime i have a quick glance its still there lool…hmmm patience

  13. Hi
    All I have been following this for some time now.
    I wanted to learn scalping if any can teach that put me in right direction thanks.

      1. no stop yet put in place, if ftse reaches 6747 then im adding 2x what i already have.
        and then i prob watch till end of day (if adp comes out better then i prob close by 6760)..otherwise i will hold and wait.

        1. i will only add 2x what im holding ONLY before the ADP results…chance of hitting that quiet small now.

  17. I’ve been on the sidelines since the end of Dec. Couldn’t see clear direction. Recent upwards momentum seems to have run out of puff Took short position this morning at 6736 with trailing 50 pt stop and 20pt steps.

  19. Right, 5 points loss today, call it a day. First day after holiday. Just need to work on my mistakes and move on. Basically lost 8 p. in the morning when I mixed up pullback with something else and then had short which wasn’t great until added at 6734 averaged down and got 3 points back. This break of 6725 seems like a long one to wait, don’t have time and not great position to do it.
    And … it possibly will break now. GL

  26. Hi can any one tell me where I can learn scalping from. I have spent a lot money but no luck. please any one can put me in a direction where I can learn from. thanks

  27. well folks half my prediciton has come true lets if the other half comes true up to 6790 i am talking about the last poster on last post on yesterdays page

  28. “Hi can any one tell me where I can learn scalping from. I have spent a lot money but no luck. ”

    Zahir, very, very few people can consistently scalp the indices.
    Don’t believe the claims you read on internet forum/chat rooms.

    Swing trading is more feasible for about 98% of traders imo.

    Just my twopennuth.

      1. Where can you learn to swing trade then? I’ve been trying to trade for 3 months. Down overall but not as much as I was and see about £500 as ‘learning’ money. It’s a game and no one picks up a computer game and is instantly good at it. You need to learn all the little tricks / tactics and understand the rules and how it’s played. Please tell me I’m right, ha.

        Anyway, any good sources of videos, books, tutorials, to learn to swing trade? I feel as though I’m getting an understanding of general directions of a market and how and why them directions are being headed to (FTSE and SP500).

        I use Plus 500 for FTSe and SP500, is there a better or cheaper CFD provider that people use? Plus 500 is 0.9 spread with no commission.

        1. A qucik and crude method is probably the channels – i use Raff ones and the Bianca (custom software, not available any more). Plot over say 10 or 20 days. When its at the bottom of the channel go long, at the top of the channel, go short. Stop say 35, target say 100. Aim to get stop to break even asap. Use a futures contract as you wont have roll over charges each day. Can use a near term one if only holding for a week or so, say Feb 2014.

          1. Thanks Nick,

            Plus 500 charge overnight fees on the futures contracts. £2.90ish per 200 contracts (minimum contract amount). Is there cheaper alternatives?

            1. Apart from the spread when you open them there are no overnight financing charges on IG (which I use). If you were to roll it over at contract end there is a rollover charge though. Ideally you’d close before that

  29. Mo06

    Hi swing trading.you need to wait and find a good swing to get in. Which i do but was wondering till i find a good swing i can probably scalp the market thats all it wad.
    Are u a swing trader or a daytrader.

  30. Mark Duggin shooting found lawful. If riots start tonight I will definitely be massive bear.
    Things seem very tense on the news…

  31. People asking questions about trading should have a look at the trading journals posted at Elitetrader.com, some very good info there.

    1. 4 points currently on a March contract? Not that much really? DFB is 2 points out of hours then widens after 9pm.

  34. Big benefit of spreadbets vs CFDs is tax. Upside on CFDs is 50% of the same spreadbet. Changes the risk reward ratio considerably….

  35. I am still long but nervous. Any one else long or short or waiting for better entries? I have averaged down to 6725

      1. Still long for tomorrow, but if that 6713 level breaks overnight or at open, then sell all the way…

  37. Tottenham: small crowd outside police station protesting calmly. Let’s hope it stays that way….

  38. There’s a lot of tossers here !! This is not a computer game ??? Its real …. Understand or lose your life’s worth . Seriously ….. Some of you are v v niaive !!!

    1. Dave you doughnut. Of course its like a game. Yes there is money involved but at the end of the day, the aim is to be better at something than someone else in order to win. The win here is money.

  40. Consolidation for a while.
    key levels 6770 and 6700
    a break of 6700 would see some downside with some good chances of buying positions, I think this will happen soon ( I hope this will happen soon)

    what happens in between 6700 and 6770 may see some good swing trades but be aware of any false moves.

    Best trade hope! breaks 6700 and continues down with a few good buying trades loaded.
    Worst trade, breaks 6770 and continues up for a while ( I will miss out if does)

  41. Surprised by the drop pre open. US finished ok last night. A few specific fallers dropped the Dow such as mcdonalds and msft.

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