It was bulls one, bears nil, yesterday. We got the dip to the pivot early on instead and then a steady rise all day, slight pause at the 6850 to pick ups few for the short but the rest of that trade then got stopped out. We have a 15.6 divi being applied to the FTSE 100 today as well, so bear that in mind if you are holding a position at the close. Somewhat out of kilter, gold rose a lot yesterday, as well as the indices, so are we seeing the last bullish hurrah on equites?
Talk has resumed about interest rate rises - think we will see them in Q4 or Q1 2015, even just 25bps. They won't put them up much before the election but will just need to use them to control the economy which is doing better (so say) than almost everyone else! All the bears need is the biggest bear sign of them all - the BBC TV news to start running headlines on the FTSE 100 at record highs or some such thing and then it will be downhill for a while!
FTSE Outlook
Well it certainly feels like the indices are all getting very excited and the party is going to end soon. More and more headline sabot record highs and so on are usually a warning sign (look at when Apple Inc (NASDAQ:AAPL) hit $700, gold nearly got $2000, etc etc) - those levels made mainstream headlines and over the next few weeks/months generally halved!
The FTSE 100 looks like it might well reach the 6900 area where we have R3 and also the 10 day Bianca channel - so a good area to look at shorts, but reaching that hinges on whether the bulls can keep the momentum going to break through this 6875 area.
Today sees a 15.6 divi as well so we may get some divi hunters at the close for a little run up around 16:00 to 16:30.
Todays pivot is 6839 with 6823 support below that, then 6811.
The S&P is also nearly at a fairly key round number of 1900 so likely to see a little bit of bear around here (maybe 1901 to be little more exact).
We have a fairly narrow, and slightly weak 30 minute channel in play, but i think we might see a dip first thing from this 6875 area, possibly only as far as the bottom of that channel and the coral area, before bouncing. If that area doesn't hold then the pivot at 6840 might well do.
My 2 favoured trades today would be shorts at 6875 and 6900.
Daily Raff Channels
Bianca Trends
Gold
Gold had a bullish day yesterday even breaking through the 1300 at one point but then fell back as equites continued to rise. Resistance on the daily chart is around 1315 with support at 1278 and 1260. If yesterdays high is broken at 1304 then 1311 looks doable. So long on a break of that, or long at 1278 if it gets that low. If gold does start to get bullish then 1350 is a longer term target, based on that channel on the daily chart.
S&P
1885 held as resistance on the S&P 500 for a while but the bulls managed to break in the end and 1901 looks likely to get hit before too long. I am still looking at 1919 in the near future. If 1901 breaks today then 1911 will be the next resistance, whilst we have support at 1891 (daily pivot) initially and then 1882.
DAX
The daily channels are now both heading up on the DAX so we might see the 9900 level again here before too long before a dip. Near term though its on resistance at 9738 (as with FTSE at 6875) so may see an initial dip, though the pivot is at 9666 which seems a bit too big a dip initially this morning. Next resistance after this are 9812 and 9900. Lower support is 9450, a break of which changes everything to bearish.