It has certainly being a bit tricky this week and I wasn't expecting to see 6550 yesterday. That was the bottom of the 20 day Bianca channel and held pretty well in the end, though the initialisation was half closed at 70 and rest at 62.
So, a few points gained.
But, not as many as from that rise to 6600 later in the day as I would have hoped. I was just being a bit too cautious, which is prudent on day when it's dropping and going counter trend, even if it was bull Tuesday.
Decent manufacturing news yesterday had little effect on halting the initial fall, whilst news that the UK will have the strongest economic growth (2.9% GDP forecast) of the G7 failed to get anyone excited.
Wonder why? Probably, as it's just a number plucked from thin air and doesn't actually mean anything and is bound to be revised and adjusted over time, as it always is.
Unfortunately, it's once again growth built on credit and the underlying issues are still there. So, the chickens will come home to roost yet again, probably making 2007/2008 look like a minor hiccup.
The reality correction of the overpriced stocks mostly on the Nasdaq 100 continues, and about time too.
FTSE Outlook
The bottom of the 20 day Bianca channel for the FTSE 100 held well yesterday with the test (twice!) of the 6550 area. Today sees both Bianca channels in the 6575/6585 area and with today's pivot from live charts at 6588 we might find support at this area.
However, it has been pretty weak since the initial climb to the 6600 area yesterday evening and not really doing much since. Some are saying that the Russia situation is what is causing this rather weird behaviour on the indices. That may well be the case. That and probably quite a few traders have taken Easter off for the last ski trip of the season!
For today, if 6595 can be broken and held then the bulls will be looking to reach 6628 and 6650. If that 6580 area breaks then 6520 and even 6450 (bottom of the Bianca 50 day) are downside supports.
Daily Raff Channels
Bianca Trends
Gold
I think Gold's drop to 1280 was just overdone as it now looks like it will get that rise I was thinking of all along. Support today is 1307 and if that breaks then 1301 looks likely; 1301 would be a good long entry. The 30 minute chart below shows a pretty decent rising channel.
S&P
The S&P 500 struggled a bit at the 1850 area, but quite possibly has a rise to 1875 or thereabouts in the wings. Key today will be 1855. If the bulls do appear and can break it, then the path to 1875 is a bit better, with hurdles at 1858 and 1868 first.
If it all goes pear shaped then a dip below the 20 day Raff support at 1835 will see 1805. With a bit of support at the 10 day Raff on the way down, I am favouring a bit more upside before it really drops, though. So, I'm looking at a longer term short at 1868 and 1875 as well as day trades off those areas.
DAX
Looking at the daily DAX chart, the 20 day Raff is pretty positive. On this, the FTSE and the S&P on the channel has held pretty well this week so far.
9517 is the resistance level to watch today and with the daily pivot at 9469 as the initial support area. If the bulls break that 9517, we could start climbing back to 9590 and 9650. Long off the pivot is the most likely trade here. 