Well the FTSE is turbo charged at the moment (and other indices, all on the hopes of further stimulus – they do realise that it has to come from somewhere right?) – and looking like opening at 5870! You can see what I meant yesterday in that the 20 day Bianca channel, that is usually pretty good, is not acting as resistance much at all. The faint glimmer of hope for the current bears is that the price is now entering some areas of resistance on the daily chart and also, the market in technically “due” a pull back. Yesterday’s analysis was good for the morning session, but then the afternoon was a lot more bullish than I was expecting. That said, despite the FSTE rising, the Dow stayed around the 13200 area and the S&P around 1400. To continue moving higher the longs are going to have to cough up for their shares soon, and therefore that might be a catalyst for the pullback – they might not want to so will start closing positions.
Asia Overnight from Bloomberg
Asian stocks rose, with the regional benchmark index extending a three-month high, afterChina’s inflation slowed a fourth month and industrial output missed estimates, boosting the case for more stimulus.
The MSCI Asia Pacific Index (MXAP) gained 0.8 percent to 121 as of 2:36 p.m. in Tokyo, with almost three stocks rising for each that slid on the measure. Shares have added 3.5 percent in the previous three trading sessions.
“There’s expectations policy makers may add stimulus globally, allowing investors to hope the economy will rebound,” said Tomomi Yamashita, a senior fund manager at Shinkin Asset Management Co. in Tokyo, which oversees $6.6 billion.
The Asia-Pacific gauge retreated 6.9 percent from a Feb. 29 high through yesterday as Europe’s deepening debt crisis and slower growth in the U.S. and China damped the outlook for global demand. Materials and energy stocks have led declines among the index’s 10 industry groups during the period.
Outlook
Buy Buy Buy. Go long and come back tomorrow. Unfortunately that’s what we should have done last week but hey ho. Trends are still up at the moment, but I am still expecting a pull back. This rally is all built on the hope of stimulus – if that isn’t as wide ranging or as much as the markets want then we will drop. That seems to be the only logical reason for the bullishness at the moment. Of course politicians are happy for it to rise while they don’t actually have to do anything so will maintain this promise for as long as possible. As I mentioned above the long positions are going to have to start thinking about buying their shares soon. We just need a newspaper headline with “is now the time to buy shares” and then the bull run will be complete and it will head right back down! Usually just after its squeezed every penny out of the bears. Today’s pivot is 5830 and we have the gap to yesterdays close at 5845, so I expect that we might see a bit of a drop on open to hit that pivot area. Previous resistance at 5825 will now in theory become support. As you can see on the daily chart we are also nearing some resistance areas, with the first one around this 5870 area. I have plotted my thoughts with the arrows below – these seem to be fine for the morning sessions at the moment but by the afternoon they are out of kilter! That was certainly the case on Tuesday and Wednesday! Maybe that’s the US getting involved with the FED pulling some strings? All that said, this overnight rise seems a bit overdone for that Chinese data which was pretty much on a par with expectations. Tricky!
ftse 100 bianca trend channels
ftse 100 prediction
Hi Nick I’ve been following the blog a few days and its nice and clear I just wondered if theres any reason you always post your charts from around 07:30am BST a few hours later around mid-morning BST?
Hi Art
I do that analysis and the charts at around 7-7:30am and send it out to subscribers before the market opens. I then post a cut down version on here about 11am – rather than type a load of new content I copy and paste what I sent out. Maybe a bit less content and leave out a couple of charts, but that is why.
Cheers
Nick
I thought there must have been a reason thank you
Pivot players shorting the early stab at R1 did well today. We are are in a nice downtrend so right now its short until we see the reversal.
When bulls get hold of a market you cant fight them, but I see the American consumer stocks reporting last night were pretty poor, and even McDs had a poor quarter.
So happy to be short for now, see if we bounce off the pivot.
BoE were downbeat this week, pretty much admitting interest rate cut futile, up to governments to fuel demand now as the consumer does’nt want to spend or borrow. Doubt we will see much initiative really.
It seems crazy to be here at 5850 but hey ho. Shorted the open. Long off the pivot…. if you cant beat them join them!
Exactly Nick…. our trades so far today are identical and my upside target initially is the 5,870/75 zone. I think it’s quite possible that we test 5,900 before the weekend.
Looks like we might see 5900-5920 before we decline.
Taiz, agree with you. I have 5886 as the projected top for the month.
What are your thoughts on the Dow. I think it would reach 13260 and then the bears would kick in big time.
I haven’t traded the DOW for a long time – it’s one helluva beast! A quick look at the chart suggests sellers hit it around 13300 and we seem pretty close to that level. It’s a case of wait and watch.
perhaps there’ll be one more test or ‘double top’ if you like of the Dow before markets digest these gains. This may equate to 5,900 or so on the FTSE.
Agreed. That’s the reason I’m keeping the powder dry for now. Besides, until the most recent swing low isn’t taken out, I’d rather not put the bear hat on.
most recent swing low – was that 5830?
5830 – in my eyes, probably not a significant swing low. I’d go with 5797 made yesterday (though it was pre-market), or 5784 made on the 7th of Aug. Once those lows are taken out, the balance shifts to the bearish side.
your opinion much appreciated. is there any reason why i am always caught out on the wrong side at approx 4pm , every time ! grh!
Steve, after years of day-trading, the trade around 4pm holds so much fear I rarely make it, and if I am in a position, the SL gets tightened right down. Market has a habit of moving against my position late afternoon as the Wall St algorithms take out stops, and if you dont close, you can bet money (if you have any left) you will be on the wrong side of a gap move by morning. My very last trade of the day has to be a very high probability trade eg failing to break a pivot with 10 to 1 risk reward ratio or so. Generally I seek to close down before 4 pm…no matter what.
Thabks for your response. At 4pm uk time i got caught out on the dow with the sudden drop. Of course it was only still morning for the americans. But it seems wherever i trade at this dreaded 4pm period whether uk market or usa…. I always get caught on the wrong side !
What are your thoughts on scalping? Thanks.
I can see premarket prices on the SpreadCo charts – however are there any websites that also show this info?
I’ve noticed that IG’s main page does show quotes for a few indices and surprisingly, they seem to be real-time and continuous. Dont know if this helps.
You’re welcome. Dont know about the 4pm thing – my dreaded time of the day tends to be 1.30pm when news emerges from the US!
RE DOW – 13300 ? It wasnt at 13300 since April ?
Steve, as per IG’s chart of the DOW mini-contract, a high of 13339 was made on the 1st of May.
Yes sorry i caught it on end of april, which was actually begining of May on my chart. apologies.
No worries. Charts are not always to read, especially these darn Java ones!
Nice day for pivot traders.