FTSE100 - Daily Analysis

[Mercury]

Fade is my bet, have gone Short from recent touch on my 88% Fib.  If it goes up to Nov/Dec highs then that would put US markets over the top and a switch to bullish stance.  Can't say that won't happen of course but I'd expect the US markets to lead that charge.

 

Elsewhere Oil is softening and Copper is down over 200 points so maybe an end to the Resources led rally on the FTSE?

 

If you look at some of the FTSE stalwarts like Unilever and Reckitt you will see some very Bearish signals.  These kinds of companies have been propping up the FTSE in a flood to the more stable global FMCGs but they are the last line of support so when they go...  Imperial Tobacco also took a hit over the last few days, BAT still strong but for how long, are investors beginning to worry about over inflated defensive stocks?

[Guest Rich88]

For now we need to get doha out of the way, so then we will get a true picture of what is going on. But like we've seen before opec don't aways make a decision. For now it fills like a 50/50 bet on what the out come will be, so I think the markets will be rand bound till the weekend.

Monday though! Well that'll be a different story.

[Mercury]

You may well be right Rich88 but here's the thing, how much of any positive message has already been priced in by the rally?  If we assume a lot, and why else would the market have rallied in the face of so much over supply (other than specs just thought Oil was cheap), then the news would have to be astonishing to drive the market further, hence my sell the fact stance, well that and the analysis I have done outwith any so-called fundamentals...  If it does move down after Doha then it will move hard and therefore be difficult to get in on.  It it bounces I doubt (possible but...) it will move that fast after such a strong rally.

 

You are right it is a coin toss as to what comes out of the meeting but in order to trade we have to make a case for one way or the other no?  Or else just stay the **** away and focus on something else of course.

[Guest MrJake]

I'm going to focus on the birthday party that I am going to on Saturday - Chinese Feast :-)

 

and real ale of course

 

 

[Mercury]

Are you selling tickets?

[Guest MrJake]

I might have to so that I can afford my next deal..

 

On the menu

 

Doom Bar

Banana Bread Beer

Stella (sorry but I have to mention it)

Gin - Plymouth of course

and more

 

Oh yes there is food as well

[Mercury]

FTSE has turned at the 88.6% Fib with strong bearish indicators as previously posted.  Is this "the" turn?  Don't know yet of course but it is encouraging.  Turns on all major indices at significant points as well AND all turned before breaching the Nov/Dec 2015 highs.  Almost wish the Dow had breached cos at least then we would be looking at new all time highs for sure (err... as much as you ever can be).

 

Need to see a small 1-5 down followed by an A-B-C retrace and turn on the hourly chart to confirm this is indeed a move down.  If it is then we could be looking at a retrace to at least the Fib 38% (6040).  After that?  Well let's wait and see on that...

[Mercury]

My latest chart shows a 1-5 wave pattern up to the recent tops contained within a pair of parallel tramlines and capped with a potential ending Triangle with Neg Mom Div.  Added to the Daily chart picture I think the odds are good that we are seeing a significant turn.  I have finally found what I think is a strong pair of tramlines on the daily chart and the turn is happening (if confirmed) bang on the Fib88% with strong Neg Mom Div.

 

Charts:



[Guest Condor]

Well I 'faded' ( I think thats the term) at 6360 and a 2nd short at 6342 so I've got a split bet strategy going. I'm hoping for a fist fight at Doha or atleast someone storms out with the hump!  If not that then the market thinks it's risky at these elevated levels and best to take profits.  I'm a bit worried about crazy volatility at open knocking out my stops when/if the market falls i.e. even though my bear view is correct a crazy spike goes north knocking my trades out when my view is correct. That would be extremely irritating.  IF it's a continuation Bull market fair enough if they break.....this is my biggest concern , is how far up from present levels to place them.  C

[Guest Condor]

**** just spotted this from Questor...Time to 'Sell in May' as Brexit looms and storm clouds gather over FTSE 100 | http://www.telegraph.co.uk/business/2016/04/16/time-to-sell-in-may-as-brexit-looms-and-storm-clouds-gather-over/

 

He says FTSE100 Avoid!

[Guest Condor]

Wow the FTSE, more or less recovered the inital fall of this morning. Quite amazed, suppose I shouldn't be. C

[Guest MrJake]

So, let's work this one out?

 

1. The Doha talks breakdown
2. Oil price falls
3. Gold rises
4. Morgan Stanley profits halved
5. Declining issues outnumber advancing ones
6. IG Client sentiment 84% Short
7. 56% of trades in the last hour are "Sells"

 

Well it's obvious, the market goes up!!!!

 

You've just got to smile

 

[Guest Rich88]

We are being ramped up by the us, earnings after the bell might change all this though!

6335 was my bearish stop, even though were above now we could still fall thought and target 6210 the next coming days.

i dont think oil has finished selling off either, looking at the fundamentals what is there to hold it up?

[Mercury]

LOL!  That's why Fundamentals don't mean much in this market, in my view.

 

Short sharp 1-5 EW wave up, W3 may be done.  I would love to see volume on this, I bet it is thin, as Rich88 alluded to.  This is the rally that keeps on giving (Bulls at least) but when it ends there will be a massive retrace at a minimum (over 1000 points on the Dow for instance).  After that?  Who knows...

[Guest Condor]

How about this market, I was starting to think this morning the big drop was on but no! Not even Doha could stop the Bull Market.  Maybe the Dow will now go to new High beyond May Last Year 18360?!  That would be a Five Up then I think.

ps. I love stops, they keep saving me destroying capital of any significance so I can be around when it finally happens (the Big pullback that is) C

[Guest Rich88]

the Dow is not far from all time highs! if we are so lucky to reach that far?

Did here Q1 GDP might come in at -1

 

[Guest Rich88]

honestly though, we rallyed last week on doha and now all is said and done or more was said than done! we still rally.

Once the new is digested properly then will see if the indices are still correlated with oil.

[Mercury]

That is the only way to do it Condor!

[Guest Condor]

OK how about this:

The Peak of this morning around 9am was the end of a strong 3rd wave(W3) around 6417.  The W1 wave starting at the bottom of the 'Doha' drop.

Currently put in W4 turned around 6382, starting W5 up to new high, Wave 5 to go above top of W3 for EW to hold.... then boom...

So. A-B-C correction to follow.......... top of the pesky 5th Wave...of course difficult to call, but maybe 6480... could stall and fall before then of course...next stop after that bottom of the 'C' Wave target 6320.  So minimum 100 points from the top me thinks.  C (Ever the Bear)

[Guest Condor]

chart to support above scenario. Appreciate your input  i'm sure you're watching like me, C



[Guest Condor]

If Momentum divergence appears i.e. momentum peak for W5 is lower than level at top of W3.  Then indicator for a turn?  C

[Mercury]

Hi Condor,

 

I agree your small 1-5 scenario but the watch out is that we have had a long run of these false dawns for the Bear move so any position taken needs close stops until things clarify.  Safest way to play it is to wait for a small 1-5 down followed by A-B-C back up and turn at a lower low.

 

It is easy to loose heart given the strength of this rally and turn with the Bulls but all too often that decision seems to happen just when it does actually turn, such is the psychology of the markets.  Ask yourself what you would be thinking if you were a Bull and had got in near the bottom of this rally?

 

As to the FTSE100, I think the the motive action is being driven by resources and FMCG stocks in the main so watching Oil and Copper will help us decide on this one.  Copper has just made a turn down at what could be a W4 point and is in the processes of tracing a small 1-5 down (not yet confirmed).  Oil has already done this now we await a clear A-B-C and turn (this might come near where price currently is (around 4390, which is the Fib 76%).

 

Dax is on a different path but may becoming up to a turn as well but frankly I'd be loath to do anything until we see how Oil does and how the US markets open...  

[Mercury]

PS: WRT the Dax, I'd like to see this market also trace a 3-4 before I get too excited about the FTSE.  If it does this now, before the US opens and then turns to peak about 10390, that's the Fib 62% off the Nov/Dec high, then we could be in business for a significant retrace.

[Guest Condor]

think my chart still holds with today's price action. W5 awaited above W3.  

Think my centre tramline(between the red ones) is further validated by price action today. Hasta Manana.  C



[Mercury]

I'm not ready to call the top of the FTSE rally yet but it is looking promising, then again it has looked so before on this long, long rally.  Last night we got a double top (albeit out of hours) and the US dropped away from recent highs quite sharply.  This morning the Dax put in a technical 1-5 high and turn.  Oil looks set for a retrace at least and maybe more.  Copper is also turning down and Silver has bounced and rebounded sharply.

 

To be more confident I'd need to see a nice 1-5 down followed by an A-B-C retrace and turn.  As against this there is strong resistance just above both the Dax and FTSE but how often have you seen such strong resistance showing a near miss on with price action?  A lot for me...  Next few days ought to tell this little tale.

 



[Mercury]

The case for "the turn" is getting stronger.  I have a technical break of an ending Triangle with clear 1-5 hits within the Triangle at a W5 top (under EW counting) with Neg Mom Div on Daily and Hourly.  Of course it has been like this before but this time it could really be different (HehHehHeh!).

 

To be clear I'm not saying it's going to drop like a stone now, but traditionally the price can drop quite sharply from such a move before a strong retrace, perhaps back for a kiss on the line (or nearby resistance).

 

One to watch closely, similar set ups appear on all the major stock indices and USD strength has returned (still TBC via a breakout of a Triangle formation on the DX).  Gold is stuck in it's own Triangle formation.  It can't last...

 



[Mercury]

I'm expecting a retrace to a suitable resistance point later today across FTSE, DAX and US markets but not quite yet.  Another small leg down would give me a small 1-5 wave down and if we then get an A-B-C back up with a lower low the Rally from 11 Feb will be over.  Will be interesting to see whether this all happens tonight after the US opens or if we will have to wait until Monday... 

[donaldprice]

the ftse 100, has almost reached a double top, and therefore failure to surpass this could possibly turn south, also daily 61% approaching as well, MACD + RSI pointing lower. Of course this still could continue a bull run, however eye brows being raised as well on the 2 hourly, as it has touched the bottom tramline quite a few times, therefore exercising caution if anyone is considering going long. always glad to hear different views.





 

[donaldprice]

hy casey, yes i used the gann fan on the daily chart, and the price action of the ftse had been closely approaching the 61% level. But of course we would need to see a break of the 45 degree angle in order to follow the next angle line. However Gann never made anything simple therefore always best to use a few others forms of technical analysis. But i agree always good sometimes just to see charts compeltely naked, as that alone can help you see where price action is at present. 

[Guest Rich88]

Now that we have broken 6335 as long as we stay below this then we should see a move back to 6100 medium term. Looks like 6400 was the top. Oils due a pull back so this should help.