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FTSE100 - Daily Analysis


Chanakya

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So far the FTSE has stalled at my up-sloping tramline and lower edge of resistance zone.  Can't rule out a final pop (50% Fib on FTSE, 62% on US) and we might get this with US opening (or as we near Us opening in futures trading) before a drop back.  I have 2 possible tramline sets but they both project the same thing, a drop to at least the weekly chart support line (17400 ish on Dow).

 

Alternative is Chris's scenario of a bust through the congestion zone, not for the faint hearted this one...

 

 

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PS: for those of you tracking commodity correlation with stock markets, Oil is looking set for a move down again and Copper continues its down trend...  This could support a final move down on stocks before a stronger retrace and then let's see.

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Well those were fun discussions so far this morning, nothing like a good blast at politicians and fat cats in general but now back to the markets.  FTSE100 caught a bid after a weak opening but is now back at my strong down-sloping tramline and finding resistance.  Oil and Copper is on a rally and this sector is causing this pop in the FTSE, well Oil and Gold really, general mining stocks are down.  The other green area is defensives and Financials are in the red across the board.  So Oil and defensives then, not the best basis for a sustained rally I feel and where is Oil going?  Laters!

 

I remain fully bearish and I now believe we have indeed turned into the "Big One".  This is just the end of the beginning, you paraphrase Churchill.  Will need to see a new lower low to confirm of course, as always.

 



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Blasted through my tramline minutes after I posted, sods law that!  So where does that leave us?  Waiting for the Yanks again that's where (and Oil!).  FTSE100 (and to a lesser extent Dax) had been sluggish to response to the US surge yesterday and now the FTSE looks like it has moved to complete a more obvious A-B-C.  IF the US markets have indeed turned they are in a retrace (that would turn short of yesterdays highs).

 

I would need to see Oil end and the US markets consolidate yesterdays turn in an EW1-2 to be confident of FTSE and DAX turns so with about an hour to go to US open is wait and see time (again!).  There is a lot of China data to come before we get to the next FOMC and if that is bad I can't see a rally into FOMC, with the weakness from yesterday in the US, what will have changed today?  BoE? hardly!

 



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I have FTSE put option expiring next Friday ( @6025) , so I'm hoping that happens.  Seems plausible to me 2nd attempt on 6060 been made surely something will occur before then that will break that support...  3rd attempt might make it through. C

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So Oil looks like it might be about to blink on this rally (maybe...) and Copper looks like it is set to resume its bearish move but Gold is unresolved and stocks are looking bullish again, at least temporarily with some expectation of Fed drugs being administered via double speak tomorrow but what does it mean for the FTSE big picture?  Ideally I would like to have seen another leg down to FOMC before getting this rally, which is entirely expected, but the markets rarely seem to give us what we want...  Still with dual bet strategies and profitable protective stops I did fine ont he FTSE and am now out of the FTSE but seeking the next wave, which I think will be a resumption of the bear move (I am not trading Long on the retraces).

 

Looking at the Daily I have a fresh view of the whole move down since Apr/May 2015 as wave 1 of a bear market.  We had Neg Mom Div on each major turn down (May 2015; Oct 2015; Apr 2016).  There was a decent 1-5 count for both major down legs, wave 1 is usually short and indistinct.  The whole move is encompassed by a decent pair of tramlines (red).  You may be able to see it easier on the weekly chart (also below) and note that the Wave 2 retrace turned right in a strong congestion zone on the weekly and at the MA200, for those who like that indicator after a break and kiss back on the middle tramline.

 

Looking at the 4 hourly (as a proxy for hourly to get everything in): we can see the Neg Mom Div at the W2 turn down and then a clear 1-5 wave pattern down to the blue Wave 1 turn back up on 6 May (with Pos Mom Div).  Currently I see an A-B-C pattern as marked with green labels and it looks to me like we are approaching the end of wave 3 of wave C.  Therefore I forecast a small retrace and then a final wave 5 up to complete the retrace.  Where exactly?  Well there are a number of candidate as usual depending on where wave 3 ends and the pattern of the final wave and what happens to Oil and Copper and the US when it opens.  There is the 50% Fib and the 62% Fib (nestled nicely in a congestion zone!) and the mini head and shoulders from the Daily, although I don't trust that one as much as the lower one.  Can't say for sure obviously but should become apparent in the coming hours or perhaps into tomorrow.

 

Thoughts?

 

PS: if you don't like modern art try starting your own thread...

 



 

 

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Picking up on the US markets post, on the FTSE the case for whether the market has produced a 1-2 retrace already and is in wave 3 down OR still has to complete wave 1 is less clear (or put another way the risk that a strong retrace could occur is higher).  The general set up is similar to the US so I won't repeat it here but a break of the lower head and shoulders neckline and anew lower low has not yet happened.  There is a strong possibility that this market may find support in the 6000 area and retrace back up to form a 1-2 pattern, especially as the previous rally did not go as far as I would have expected (not even to the Fib 50%, whereas others did).  If Oil and mining minerals catch a retrace bid then the FTSE overall may do as well.

 

On balance if the US markets fall fast then the FTSE will follow and if it does then the Fib 62% seems the likely next stop (5850ish) but we should all be on our guard against a sharp relief rally.

 

Thoughts anyone?

 



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I'm Surprised the FTSE didn't properly crack the 6060 level yesterday (3rd attempt this month) - so FTSE still showing resilience which meant my PUT option at 6025 expired worthless this morning. I still haven't changed my longer term view that it will break and my PUT Options for June and Sept. remain in place.  These are my insurance against my ISA's & SIPP that Ive gradually sold to Cash (75%) since March.  I'm still happy my action whatever happens in the coming months.  I'd rather deny myself profit than see my portfolio take a significant hit.  That's the long way of saying I'm still a Bear on FTSE (& US500) until I see some reason that world markets and the businesses that comprise the indices are somehow in great shape . C

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Fair enough, my approach is different: find the turns and go Short and the stop protect at B/E, if I get stopped out I don't lose and give myself a chance of gaining big.  It was Warren Buffett who said, when asked the secret of investing, "don't lose money" so decent approach   Of course to make money in trading at some point you have to take a risk...

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.. yes indeed :) - I'm consolidating at the moment as I'm not happy to enter on what I'm following at the moment.  Having been stopped out more times than I care to count I'm trying to trade less and get on high probability trend reversals ( I thought I was doing that before - turned out I wasn't) .... I guess it's all part of my learning and finding the method that works for me.  That method still includes EW , tramlines , support /resistance etc. but with the FOMO element that has caused me to make what with hindsight were bad entries.  I think that's my key learning over the last period.  C

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6260 is a key area for the ftse. If we stay below this then we should see a break through 6050 quite soon. But there again oil is retraced a little the last sessions, but people are still calling for a break above 50. If this happens then the ftse could get a good kick upwards!

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Picking up on the US markets thread I have struggled to make sense of the FTSE ( and particularly the Dax) with all the volatile whiplash.  This is not only reminiscent of many wave 1 moves but also of the dreaded complex 3-4 wave retrace and that is what  believe we have being seeing in both the FTSE and the DAX (thought not the US it seems).  The attached charts mark out the complex wave pattern that has recently completed.  On the FTSE there is a chance the wave 5 is done too because of the lower low but not on the Dax so on balance, and with the US picture showing a standard 3-4 pattern, it seems to me that the Dax will lead the rest down to a final wave 5 to complete the bigger picture wave 1, after which we can expect a strong bull rally, which given recent history could reach almost double top territory.

 

Again we cannot be sure a wave 1 is not already complete so need to guard against this scenario.  A sustained break of the upper tramlines would signal this scenario.

 

So in summary I think we could see a small pop on opening tomorrow followed by a drop into a final fifth wave (or it could open down of course).  But if you do trade this make sure stops are close as the alternative scenario of having begun a bull relief rally is possible too.

 



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THE MARKET IS RUN BY THIEVES  m these non performing fund managers   and pension con artists  , they need to raise prices  to book days pension investments at the day's high.They need to raise prices  every day  and never let stock markets   fall.

 

They  bring in the FED to bail out stock markets IN THE GREENSPAN PUT  , THEY HAVE CIRCUIT BREAKERS TO PREVENT STOCK MARKETS GETTING TRUE VALUATIONS They stop shorters  

 

My own analysis showed 80%  of puts lost  money

 

yeah so go short and burn your account

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Good afternoon

 

What a tough trading week that was!? On friday I had a sell order on the ftse at 6260 but we never got that far. But my excitement got to me and I sold half at 6230 with a trailing stop of 15 points. So still happy.

A tough fight is going on between the bulls and bears mainly down to following hope with oil and the us equities (what evers going on with them at the moment) this will very likely change approaching the referendum.

I'm keen to short anything between 6250 - 6300.

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Curiously the non US markets have been heading south making lower lows while the large cap US markets have not.  My current feeling is that US markets could very well make new all time highs (S&P in particular got very close) but perhaps others will not quite make it.  As such I would guard against a strong rally in all stock indices over the coming days and trading prior to the Fed release on Wednesday is not for me unless I can see a definitive move.  Currently stock markets are murky at best so I'm waiting on the sidelines for more clarity and better entry points.  FX much more interesting for me just now.

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