Well, that’s the Olympics done. What a great success it was in terms of organisation, facilities and the medal haul. That should buoy up the UK and London in the eye of tourists. What will the economic effect be? Well there is certainly a ground swelling of people getting into sport, both young and old. Bike sales have shot up so a long on Halfords will probably be good! However, overnight we have had slightly worse than expected Japanese 2Q GDP – 1.4% vs 2.3% expected. The recent rally is all built on the expectation of stimulus to ride to the rescue on any issues. However, if the issues are bigger than the stimulus can cover? Asia are expected to be the engine room to the recovery – if Japan, China, Singapore etc are all slowing down (as recent news would suggest they are) then something more fundamental than bailout and asset purchases are needed.
Asia Overnight from Bloomberg
European and U.S. stock futures declined and most Asian shares fell after Japan’s gross domestic product expanded less than estimated, underscoring concern that the global economy is slowing. Corn retreated after climbing to a record last week.
The Euro Stoxx 50 Index futures lost 0.3 percent, while the Standard & Poor’s 500 Index slipped 0.4 percent at 7:13 a.m. in London. The MSCI Asia Pacific Index declined 0.3 percent. Australia and New Zealand’s currencies weakened 0.3 percent. Corn dropped 0.4 percent in Chicago.
Japan’s second-quarter economic data comes as Bank of America Corp. cuts its growth outlook for China. Bank of England Governor Mervyn King said Europe’s crisis has “no obvious end in sight” before a report tomorrow that may show the euro- area’s economy contracted in the three months through June 30. Federal Reserve Bank of San Francisco President John Williams said it’s time to move ahead with a third round of asset purchases, according to the San Francisco Chronicle.
Outlook
The Bianca trends are still up, however I still believe that we are at or nearing an important level around 5880 to 5910. I have 5850 pencilled in from ages ago as you know as a likely top. I am not (no one is!) good enough to pick exact tops or bottoms but anywhere around these figures has got me feeling more bearish. Today’s Pivot is 5844 and we are looking at opening at that or just below. That won’t be a target for today in that case. Fridays close was 5847 so also pretty much where we are due to open. With the Olympics finishing will the hangover kick in now. They have been great from the UK point of view, and I get the feeling the rest of the world has been pretty captivated by them. Will that optimism and good will carry on? This rally has also been built on low’ish volumes and the hope of decent stimulus – if that’s not forthcoming in the size required then the markets might not like that! it’s a tug of war between stimulus hopes and bad economic data at the moment.
We are dipping below the 10ema on the 4 hour still – if they cross on that time frame then we should be on the way to the summer low towards the end of August/early September that I have mentioned before. On the daily chart we are still below that first resistance line at 5860. On the hourly we are right at the bottom of the trend channel that has held since 6th August. The top of that channel is around the 5910ish area.
I have put the 30 minute chart below and as you can see I am still feeling bearish. However, I am not ruling out the possibility for a bit of a rise to 5910. I can’t get too bullish at these levels, especially as the S&P and Dow have stayed at around their current levels for a few sessions now.
ftse 100 prediction
Tough support to the downside on the 4-hour chart. Price is sitting on the daily pivot and the lower upward channel trendline. I’d imagine that if we test the daily lows and fall through them (approx 5,823) then it could be a case of TIMBERRRRR this week. I’m still not expecting larger falls so I’ll be buying the dips.
I’m short from 5847. Not expecting a big move, hence a small-sized trade with a 25 point stop loss. In my eyes, anything below 5838 is a good reason to be bearish while above 5856, bullish.
I agree Lal. As per my calculations I too think if we are below 5836 we are bearish and above 5854 bullish
Great! Hopefully, between us we can convince the market to head down big time!
I am expecting this to drop to 5828 which is my first target. Then i expect this to drop to 5822. If that does not provide support either then 5814 (r2). hope it goes as per plan
Don’t know about those levels – I tend not to use traditional pivot levels. If enough sellers jump on board, I think we could see price dipping to 5780-ish levels. 5820 does seem a level at which some support could come in.
Looking bearish on the 30-minute now. Lows of day at 8,823 are key. If these break then we are off to test 5,800.
If the lows look to hold and you are long-biased then obviously it’d be a great place to go long. Getting harder to call in this choppy PA.
sorry… i meant 5,823 and not 8,823!
It s testing the 200 ema on the 30 minute chart
…and busted! Unless it recovers above it within the next 4 minutes!
We are heading towards the 10 ema on the daily
Moved my stop to break-even. If the index reverses sharply, it will be no profit, no loss.
Thats what i have done too
. I am short at 5852 from last night
Where’s your profit target? The index is still looking weak although the bar that completed at 3.30pm (30 min) managed to close above 5820.
I have closed half my stake at 5618. I thinking this might be go to 5804 (10 ema on the daily). But you never know….
I’m targetting the nice round number that is 5,800. There’s only one direction we’re heading now till the London close.
Hmmmm….buyers stepping in. Weird the way FTSE recovered while DOW has not done so massively.
I don’t think we go any higher than the pivot though.
Opened a short a 5868
evening star pattern formed on the 30 minute chart
i’m still long from 5826 and holding… momentum is long currently.
I think we ll drop to R1 (5852) and then rise to test today’s high again
yep agree quite likely