Will a further test of 6390 hold?

Good morning, well that’s a tough act to follow today as yesterday played out very well with the dip and rise as per the morning email. Hopefully you managed to catch some if not all of the climb yesterday. Prices stalled at 6440 and dropped back and with the trailing stop the rest of my long was closed out at 6420. Overnight has seen prices dip right back to 6404 again, but then recover.  In play into are those 2 levels from yesterday – support at 6390 and resistance at 6440. The US is still being urged by its debtors to solve the debt issue, China and Japan waded in yesterday who between them hold $2.4 trillion! Warnings about global economic destabilisation are being made if nothing is sorted out.

Asia Overnight from Bloomberg

Asian stocks swung between gains and losses, with the regional benchmark index trading near a three-week low, as telecommunication shares dropped while utilities advanced.

The MSCI Asia Pacific Index climbed 0.3 percent to 138.25 as of 12:48 p.m. in Tokyo after falling as much as 0.3 percent. The measure closed yesterday at the lowest since Sept. 13 as the partial U.S. government shutdown stoked concern lawmakers will fail to raise the nation’s $16.7 trillion debt limit this month.

“The market isn’t moving anywhere because of the external overhang about the U.S. fiscal situation,” said Tim Leung, a Hong Kong-based portfolio manager who helps manage about $1.5 billion at IG Investment Ltd. “The topic is the likelihood of a U.S. default, and that could be disruptive, but I don’t think at the moment people are assuming this is going to happen. If the market assumes there will be a default, the index won’t be at this level.”

China Economy

“The broad impression I get is that the Chinese economy has pulled back from the slowdown scenario this year, but it’s not taking off,” said Shane Oliver, Sydney-based head of investment strategy at AMP Capital Investors Ltd., which has $131 billion under management.

US Futures

Futures on the Standard & Poor’s 500 Index were little changed after the gauge slumped 0.9 percent to a one-month low yesterday. Without an increase to the debt limit, the U.S. will exhaust its borrowing authority on Oct. 17 and would run out of funds to pay all of its bills sometime between Oct. 22 and Oct. 31, according to the Congressional Budget Office.

FTSE Outlook

ftse 100 prediction
ftse 100 prediction

Everything looks weak on the bigger picture still. I mentioned a while back that I still expected 6200 before a year end rally and I still think that’s the case. 6390 held well yesterday but the daily trends on Bianca are still down, and the lower support levels have obviously moved down a little now. If we test that 6385/90 area again today then the bears are certainly propping and if broken I think 6300 is on the cards initially (bottom of the Raff channel area), possibly further, as that would be starting to break all the Bianca channels. That said, the S&P is on a support zone at 1675, and the Dax also so we may actually resume a bit of bullishness today.  I have plotted a rise to the ProTrend line at 6452’ish, however the 200ema at 6440 is also a fairly key resistance level to watch for, as well as being yesterday’s high. Longer term I am thinking the next week or 2 will see a climb then a dip going into November. We are testing the Pivot level at 6427 as I write this but its acted as resistance overnight. Bulls will need to break that and the 6440 to get the 6455 area. The EMAs on the 30minute chart are not looking too bad at the open so if the bulls do break the daily pivot then we should get that initial climb. My second arrow drops all the way back to 6400 but that might be a bit too bearish and it will only dip back to the pivot area – we shall have to see as it’s a tricky one to call.

83 Comments

    2. Terry, a bit of advice, it’s generally considered quite rude to add ‘asap’ or ‘quick’ at the end of posts on a forum or message board when seeking help.

      Additionally you should be aware that when you replied to Dabe’s comment yesterday (which made me laugh to be honest) that your ip is visible to the public. So posting a reply to his comment under a different username (day) means that everyone can see it’s still you!

      I’m sure if your polite you’ll get all the help you’ll need here as it’s a friendly and knowledgeable community. Good luck!

  7. Think we may finally get 6338 in the next few days. Was hoping / expecting to be in September. After that the next level would be 6220 – I’m not totally convinced we will get that far – not as bearish as Nick.

    6338 could certainly be a good entry point for a medium term long, but the remainder of October and November are going to be bumpy.

  10. Terry …. Go home ….. You’re not cut out for this …. Demanding to know what the ftse will drop to …. No one knows !!!

  12. senu we will get that by 4:30, as the DOW looks bullish it will bring the ftse up.
    Lol at those who short 6390 =), might see that tomorrow though =)

  16. Small Resistance at 6412, really strong resistance at 6435/30 which is probably a good time to short

  21. Long at 6383 bottom of the range, looking to hold for a couple of weeks to 6600…
    Anyone know the divendend

    1. sorryfor my ignorance, but how can u even go long in such a market, whats ur methodology or thinking process here?

    1. wish i kept my short from 6430 and 6390 loool..then again easier to make decision hindsight. I really do think ftse dropping to around 6100, need to find a good entry for short…also believe there will be a small bounce before dropping (for the 30mins chart to not get over exhausted)

  29. Wow lost 22 pips, very unpredictable guess everyone was going long. Least we know bears are in control. Keeping out till the fog clears

  31. Super patient Bee..hope you entered now at around the 6340 level and not your 6380 level…I just entered now at 6342 level…small long..TP 30-50 pips.

  32. Sorry in above earlier post meant 6350 -60 not 6450-60..easily done with the speed at which the FTSE has shredded over 100 points.lol

  36. Have put a limit order to add to my long at 6338. Should be hit today or overnight. Effectively long at 6430…….a bit of pain……but hopefully will be fine when I come to close.

  37. Lost a lot, may lose a whole account by tomorrow. Shouldn’t have been so stubborn. Needed 10 points only to 6397.

    1. Nick, from my analysis 6200 not a good point to enter.
      If it does go lower (which in my scenario it will), Im expecting atleast a drop to 6100, all the way to 6000.
      You think thats too low?

  39. … Does anyone know if the USA can be sued for this run on the market for negligence as it’s self administered .. I seem to think there’s a lot of lawyers on this forum

  40. Jack honestly if you lose your account either give up or trade larger timeframes i would suggest weekly bars there is far less stress and possbility of over trading

  41. Missed most of the fall this week as been busy. Now waiting for a suitable level to go short. Trying not to keep looking at the points I missed!

    1. thats the way mate!
      I always say to myself
      “Only 1 trade to fu*ck u up! but infinite number of trades to make u rich!”

  43. Dow now at the levels we saw at the height of the Syria crisis and then suddenly bounced 800 points put of nowhere. This time we should head lower finally. Key level is 14650 which never got tested. This time it should.
    For the FTSE finally 6338 been breached…….a long time coming. 6220 the next level…….looking increasingly likely.

  44. Hubris…….haha…..on the flip side could argue the whole rally is self administered through the huge stimulus……..swings and roundabouts…….

  45. Yes Hubris…sue them for negligence indeed…they owed us (me) a duty of care..was a material breach of this duty and as a consequence Ray suffered irreparable damage to his IG trading account…lol..

    It’s just a big fix Hubris…only 2 or 3 weeks ago we were up some 1000 points from here on DOW..plus FED no QE taper…stimulus…buy..buy..buy..dow hit record high of 15720 or so…even though they all knew of the debt ceiling deadline and associated budgetary issues. It’s not like they can say the political crisis was a surprise!!!! People who have traded several years know this…it’s all swings and roundabouts…as I keep saying all ‘smoke and mirrors’….follow the yellowbrick road

  46. Javed…hope as the song goes…’this time it’s for real’…dow piercing below 15650…I have a score to settle with Mr. DJI…took £2k off me a few weeks back on the straight 1000 pt leg up from 14700 to 15700. My stop halted further losses at around 15250.

  47. Closed FTSE long at 6340 a few minutes ago…will trade with a fresh hand tmrw…could see 6300 tmrw or lower…as I type dow breaches 14798

  48. Hey guys most of you say you are day traders, you take your 10pt wins yet you dont use stops let them go 50+pts against you…average down.. Crazy!!

  49. Im long now. Luke it looks as though you were right about the debt ceiling effect. A nice pullback to get into…

  51. dont think my acc will survive tonight …..these yanks always seem to get the better of me ….. but hey i am dreaming of a white xmas some good longs coming up….LOL

  52. Well I feel sick.
    First really bad call & loss I’ve had.

    Must refrain from a desperate trade to try recover losses! Head is that scrambled that I cannot make head-nor-tail of the charts! Head does say downward trend continuing…but don’t want to get stung by the coiled-spring back up…tough call.

  53. lol i think its bad listening to everyones ideas here…tbh nick the only person with decent views around here.

    1. Well personally I really did think 1-2.00pm it was going to bounce up for a short stint…tried to catch a falling-knife.
      Tomorrow could go either way at the moment!

  57. Boy that dow drop was brutal! The final 10 minutes at US close saw dow take a further beating….fell from 14840 to 14743…ftse to 6304…obviously the double whammy of stop loss hunting and liquidations!! Bet many lost their shirt in the recent dow move…some 500 or so points from just Fri high to today’s low…buy the dip they keep saying…from where???? We have been dipping steadily a steady 100 points continously…result …1000 pts down…when does dip become a TRUE buying opportunity and not a trap!!!

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