It most definitely wasn't bull Tuesday for the FTSE 100 yesterday. The past few Tuesdays haven't either, so that ship has probably sailed now and just trend down all day. A little bit of a reaction from the bulls at the 2 long points - 6835 and 6807 - but neither gained any traction and the bears drove down the price to 6770.
Even the round number of 6800 didn't hold! The bears are awake now, and the market is making lower lows on each dip. Therefore, I am still looking to short the rallies. The really frustrating thing is that all this week it has failed to reach my resistance levels to enter the shorts! It’s never easy!
Initially this morning there is a glimmer of hope for the bulls as the charts look a little bit more favourable - though they will need to break above 6807 and the pivot at 6814 to really do anything.
Reading about everything, there is certainly more of a vibe to be short than long at the moment. The UK housing bubble looks like it might pop at some point.... again. Read an interesting stat yesterday and that was house prices in London are rising at £26 an hour!
FTSE Outlook
Given the fact that bears hadn't really done much until yesterday, I was once again a bit too optimistic and instead we ended up with a trending down day, with the supports being broken.
The best strategy recently has been on the 10 minute chart using the SMA settings of 5 and 34 - members will know what this is. Overnight we have had a little pop back to 6800, but the resistance levels today are 6808, the daily pivot at 6814 and then 6825.
Not really that much upside based on them!
Support wise while we are below 6800 is yesterday low at 6773, and then 6745.
At these levels we are below the Bianca channel, whilst the daily Raff 10 day has now turned down for the first time in a while (on the FTSE anyway). The Raffs are showing support at 6770 and 6760 (10 and 20 day respectively).
Technically speaking, the EMAs rather than the daily chart are still bullish though definitely weakening with both turning down after yesterday’s fall.
Despite the bearishness, yesterday I would say that it does look like markets are being held up to project a feeling of normality, mainly as the FTSE is only 90 off its 14 year high seen last week, despite the Dow 30 and S&P 500 dropping a lot more.
After that fall yesterday, and subsequent bounce from 6770 I wouldn't be surprised to see a bit of a bounce first thing this morning to stop out some shorters.
With 6800 breaking i think that over the next few weeks we will most likely head lower towards 6600, and the top is most likely in for the time being with that rise to 6894 (so damn close to the 6905 I had pencilled in as well).
I have been bearish with the arrows with bounces at those supports - 6780 and 6745 - though the 30 min EMAs are building up for a cross. I think i will go for the long at 6792 and then see what happens. Might even turn into a runner and it doesn't dip down to those supports.
Daily Raff Channels
Bianca Trends
Gold
Gold bounced yesterday with that equity weakness. Resistance today is 1296 and then 1300, whilst support is 1285. As you can see, not he daily chart below there is a fairly decent rising channel, though the EMAs are still bearish.
It is this lacklustre performance in gold that does make me doubt the bearishness on equities to a certain extent as if the indices were in a bad state, I would expect gold to be climbing steeper than it is.
S&P
- Support today is 1868 with 1858 below that.
- Resistance is 1875 with 1884 above that.
If S&P 500 bulls could break 1886 though, then we should get some more optimism and possible see the 1900 level again.
I think a long at 1860 with a stop at 1855 would be good if that level is seen.
DAX
Initial resistance on the DAX is likely to be the pivot at 9646. If that breaks then 9660 and 9710 would be the next levels to watch for.
Support wise, 9610 is the first support, 9594 (25EMA on daily), then 9580 (fib).
As with the others, the Raff channels are turning down, whilst the EMAs (being lagging indicators) are still bullish.