A quiet weekend on the economic news front and we are nearing the end of Feb now – been a strange month in terms of activity and a bit hard to call but still managed to net a few points. I am still running my June short entered at 5930 (cash price). I am still bearish, especially when you see headlines like this “UK has run out of money” http://www.telegraph.co.uk/news/politics/9107485/George-Osborne-UK-has-run-out-of-money.html. Still, don’t believe everything you read in the papers. The charts have been saying that we are due a down leg from around the 5930-5970 level for a while now to around 5750 and that’s what I am playing for at the moment. On a separate note, I watched the film “margin call” over the weekend and its worth a watch and has a good cast – suitable for us traders!
This from Bloomberg-
European equity futures and Asian stocks fell amid concern that rising energy costs will hurt corporate profits. Oil snapped a seven-day winning streak after the International Monetary Fund warned of an economic slowdown. Euro Stoxx 50 Index futures slid 0.7 percent as of 7:10 a.m. in London. The MSCI Asia Pacific Index (MXAP) lost 0.8 percent and Standard & Poor’s 500 Index futures retreated 0.3 percent. The yen advanced against all of its 16 major peers. Treasury 10-year yields fell two basis points to 1.96 percent. Oil slumped 0.5 percent to $109.19 a barrel.
US News
The Nasdaq Composite and S&P 500 closed up Friday while the Dow Jones was unchanged. The health care equipment & services and software & services sectors traded on the upside while the banks and auto sectors were under pressure. The S&P 500 (1365.74) closed at its best level since June 05, 2008. The index holds above its 20d moving average (1344.3) and its 50d moving average (1301.5). The RSI14 (70.1) rose just above its overbought threshold (70) but continues to draw a bearish divergence with the index.
European markets are expected to start on a soft to weak note.
Outlook
The 15 minute chart , and also the Bianca one, follow on neatly from Fridays post last week, which is that I would be looking to short around the top of the 10 day channel at the moment, certainly for a test of the bottom of the 20 day channel, today standing at 5880. If we break the 20 day channel (we will need a catalyst to do that, maybe Spain worries next?) then there is a lot of fresh air underneath, as the 50 day channel bottom is 5890. Basically, if the bears can break those 2 channels then there is a lot of downside. Resistance is 5958 again, and todays pivot point is 5941. The short term trend is down at the moment and it all hinges on whether those channel bottoms can hold. Might be worth a long at the 5880 level for a bounce off the 20 day channel – usually comes good. The 50 day channel tends to get breached and then come back, as you know the 20 day channel is my preferred one.
ftse 100 bianca trends online trading
I now see hourly FTSE as bearish.
Looking at last week’s volume on some of the daily & weekly US mkts there may be some weakness there.
The ES (S&P e-mini future) with 2 trading days left in Feb, is on course for the lowest monthly volume for 4-1/2 yrs.
We are certainly seeing some resistance at 5880, but as yet we are not seeing a decent rally develop.
I’ve bought the FTSE to finish up for the day. The price is extremely low, and if a rally does develop, then I will be able to take some profits.
are you on igindex? that ftse to finish up doesn’t look right to me, it says >5935, does it start from midnight rather than London open?
It’s a long way back up to 5935!
Yes igindex Dave. I’m not expecting it finish up. The asking price for it will increase if a rally develops. At that stage I will take profits, before it reverses again.
Sure is weak.
Ive been waiting to go long all day from about 5980 but even with strong divergence the price will not follow.
I am sure it must happen but ive been waiting so long i wont play the long side now.
4 hr chart weak, and 50 day ema may be rolling over…i would love to play the ‘inevitable’ bounce, but this might fall out of bed today.
Already short, so that’ll do for now…
Sure is weak.
Ive been waiting to go long all day from about 5980 but even with strong divergence the price will not follow.
I am sure it must happen but ive been waiting so long i wont play the long side now.
4 hr chart weak, and 50 day ema may be rolling over…i would love to play the ‘inevitable’ bounce, but this might fall out of bed today.
Already short, so that’ll do for now..
we havent risen off the second ‘touch’ at 5980…dont fancy this for a long, and cant see much reward if it does rise.
i fancy another drop today, no surprise if US sells off early.
Agreed Donald, unless the US homebuyers report is particularly good and the Dow takes us up somewhat, but not from more than 5870 I think; descent gathering some momentum…
I’m not sure we’ll get a big sell off this week but seeing as the FTSE has been unable to advance through the 5,950 level during cash hours, a retrace is inevitable. This may be the start of a weak string of trading sessions allowing the indicators to fall back. Tom de Mark expects weakness into the 9th of March but thinks it will be a zig-zagged move down therefore frustrating bulls and bears. He thinks the S&P could lose between 5% and 7% before bottoming and resuming rises again (I saw this on Bloomberg over the weekend). If the same happens on the FTSE, we may see 5,700 or thereabouts???
It’s looking weak today though, isn’t it?
big support at 5866….if thats not broken after 3pm i would consider a long.
interesting to see the IGIndex % of clients short the FTSE100 going down quite markedly with this fall from about 80+% to 65%, seems to show a number of these bears taking profits already…
I notice that last week, it dropped to 70% on a fairly small drop in the index. I think theres a lot of scalpers/ short term traders there, taking profits on small dips. I don’t think that sentiment is a good medium-long term indicator
or it could be more people going long on the dips
Agreed Donald but equally… 5,884/5 may now act as strong resistance. It looks interesting doesn’t it.
Agreed, alot of key S&R within 10 pips either way…im staying out now see how it plays out…no more trades for me today.
to late in the day to trade now… volume falling so it’s petty hard to read. It looks like the psychological ’0o (5,900) is going to be tested now.
We are rapping on the 5900 door again. If it opens, we might just have witnessed a bear squeeze. If it does open, next stop 5920, followed by 5936, 5950. Ouch!
Hi all, well the 20 day channel kind of held. Got 10 pips off the initial touch, then lost 15 when it dropped, re-entered at 5875, closed 5915.