A funny day yesterday that did in fact play out as predicted but only after a little rise up to 5780 first. Asia is a little weaker overnight on anticipation of bad debt sales from Spain and France.
Asia overnight from Bloomberg
Asian shares fell and South Korea’s won dropped before Spain and France sell 13.5 billion euros ($17.6 billion) in debt. The yen weakened for a third day as Bank of Japan Governor Masaaki Shirakawa pledged to continue monetary easing. The MSCI Asia Pacific Index (MXAP) slipped 0.3 percent as of 1:17 p.m. in Tokyo, led by declines in Japanese equities. The Hang Seng China Enterprises Index rallied 0.8 percent and futures on the Standard & Poor’s 500 Index added 0.1 percent. The yen lost 0.2 percent and South Korea’s won slid 0.4 percent. Ten-year Treasury yields held below 2 percent for a fifth day. Copper retreated 0.3 percent, while corn jumped 1.3 percent for the biggest gain in more than two weeks.
Outlook
Well yesterday’s prediction was bang on the money with the drop to 5730! We found support there and I am now expecting a rise up to the top of the 10 day channel today – 5820 area – if we can break the resistance at 5785 (yesterday’s high). You can see the resistance levels on the chart below. Pre market we are around the top of the 20 day channel at 5770, however I think we might see a little push past this today before dropping back next week. The shorter term trend is now up and the 10 day channel has started breaking out to the upside from the 20 day channel as you can see below, reflecting the recent bullishness. I think the market is hoping for further QE when required despite the denials from the Fed, and they are probably right. We are a long way from any problems being solved with slow or no growth in pretty much every country. Despite the short term trend being up I am not an over excited bull at this stage as I don’t think tis going to go that much higher, as I mentioned yesterday – 5830 tops? Of course it’s possible that we may not break the 5770/80 top of the 20 day area at all. Today’s pivot is 5753 so we should see support there on any initial weakness.
In summary I am thinking a rise up to 5830 before the bearishness kicks in, IF we can break 5785. If we can’t then its downhill from there.
ftse 15 minute watch 5785
looks like 5785 is holding…just about.
should fall from here.
also 5780-5785 is the 50% retracement from the 5989-5575 swing, so should be good resistance
Also it’s weekly resistance around 5780, but a rise above next week would have me long then.
as well as the point where it hits the upper trend line of the downward swing from early march.. in summary great risk-reward to go short here..
Check out the daily chart on the FTSE after today’s close….. Ultra-bearish! There have been three days worth of failed attempts taking out the resistance level around 5780 and today the bearish doji candle has formed. In addition to this, if you plot the Fibonacci from the most recent daily from top to the bottom, you’ll see we are failing to retrace to the 50% level.
Therefore, I believe we have lots of downwards confluence here and I expect us to fall, if not tomorrow, next Monday.
Great risk reward here…. I have taken out some shorts at 5,750 and I will short the price again tomorrow if price moves back closer to the 5780 level. My stops will be set above today’s high so 5,795/8,000 should suffice. A risk:reward of 3 or 4:1 could be on the cards.
Could well be Jon – certainly failed to break 5785
Have you had a look at the daily charts of Apple and Google? Oh dear, we could be on the cusp of something a little unsavoury. Not looking good at all.
Been sitting on my hands last couple of days waiting to see how things develop. Fears over Spain have decreased but their bond yields are still quite high. Earnings in the US have come in higher than expected but not propelling stocks higher. Can’t see what the catalyst is to drive markets higher.
I don’t think there is one. Still on for some summer lows I reckon. 4500 anyone?!
We will print money before we get anywhere that level. QE puts a floor under the markets
This is the reason why my longer term trades will be switching more and more towards Gold, Silver and agricultural commodities especially wheat, coffee, sugar and the like. The printing of money will continue to bolster stock markets in the short-to-medium term but eventually companies will be hit with astronomical price inflation (oil, energy, raw materials) which will thereby affect profit margins and you know the rest….. it will all go to $hit but who knows what time-frame this will be.
Here here to everything said so far today. I think heavy down coming soon (question is is there going to be up first) greek elections which are coming up are a worry. Also the French elections could be even worse if Hollands wins. Some slightly scary policies there.
Working my way through Chris Martenson’s “Crash Course” at the moment. Can’t recommend it highly enough. http://Www.chrismartenson.com