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Dow remains in touch with the range bottom having slipped though yesterday so not a clear break. Interesting reading in this Reuters article that the Fed remains unconcerned with the daily 'noise' and still sees a strong economy so not needing direct intervention as yet though recognises the schedule of rate rises may need to change, having had 7 in the last 8 months. There is no real feel of panic and difficult to see any real reason for one, the market has adjusted after some big players were caught offside following the Feds latest rate rise so difficult to see continuing downside until there is new news. 

The Fed (and all big movers for that matter) are not glued to and ruled by the charts, technical analysis is only a tool that at any one time may or may not have an influence. There remains (as the Fed clearly thinks) the real possibility of a rally back up once the pain of the last rate hike has been digested.

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https://www.reuters.com/article/us-usa-fed-policy/signs-of-trouble-so-far-just-noise-to-a-fed-that-sees-growth-continuing-idUSKCN1OJ2IT 

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fair go, the failure to break through the blue rectangle was crucial for further downside. Now looking for resistance (sellers to step back in) and the most likely area is just before the red 29400 de

That is the 50% retrace for  the Dow and S&P. 

Interesting S&P daily shaping up 👇

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All 4 looking very similar in set up and waiting for a sign as to direction for the day. Overnight repeat of poor China manu prod figures looks to have caused an initial drop but Dow and Dax holding up on the European open and so now waiting for the London open. Dow poised on the old support level 23110 which failed to act as resistance during the holiday period rally.

Daily charts.

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Dax and Ftse remain in step after the morning session which saw a strong 8 AM 1 hour push down which was immediately countered. Dax blocked from upward continuation by prior support turned resistance at 10559.

Much will depend on the US open at 2:30 PM.

1 hour charts;

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Review of the COT data of the Dow last updated 21/12/18 shows large speculators retaining net longs in similar respect to the COT chart of the 14/12/18 posted above in this thread.

In the chart below comparing the Feb decline verses this recent decline it's interesting there was no real washout this time round and was much more controlled suggesting less panic and more a case of managing potential high risk over the holiday break.

Next COT snapshot will be after close on Friday which is also a NFP day.

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The Apple news late yesterday (big drop in expected revenue due to China slowdown) causing a bit of a fire storm across the markets with usdjpy most affected seems to be contained within the indices now. Clear short term targets for Dow, Dax and Ftse once the mornings direction is decided.

ADP NFP today 1:15 pm may give a hint to tomorrow's NFP figure, also US manu PMI at 3:00 pm expected to be 57.7. 

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On the daily chart the 'Trade of the Week' Dow short looks perfectly reasonable but that hourly chart looks very indecisive in comparison. 

TotW;  Dow Short:  Entry 22914.  SL 23535. Was called mid day yesterday so the retest of resistance later in the day would have caused a bit of concern but Apple saved the day 😊.

Price now back around the entry level at the mo but I would prefer to see the prior low at 22812 taken out first (yellow dash on 1 hour chart is a 4 hour chart support level so not shown on daily chart) .

Anyone taken this?

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Yes very much a data driven day today @TrendFollower. The ADP US jobs data came in really high but just after the US open the US manu PMI came in at a big miss 54.1 verse the 57.7 expected and though still a positive number the market didn't like it.

The jobs data is a lagging indicator while the PMI is a leading indicator so the PMI miss took priority and the 3 pm bar gapped down on the news driven initially by the algos. Price seems to have stabilised since the initial reaction.

1 hour Dow chart;

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Steady retrace after the slide down on poor US PMI figures yesterday looks to be on the back of gains on the Shanghai Composite which is up 1.7% after hitting a 4 year low.

Will be looking for continuation to resistance as Dow looks to have recaptured 22812.

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When it comes to the house market figures out today from Nationwide (showing the smallest house price increase in a looooong time) what are peoples expectations?  Next year will start to fall...rapidly. With a ‘hard Brexit’ - leading to a plunging pound, sharp rise in inflation - creating a rise in unemployment and BoE interest rates. Each one is toxic for the UK housing market - combined its lethal!

I think this will hurt, but I don't think it would prompt the 'next crash'. Those always come from something which no one has an eye on. Unlikely to be a repeat as it was previously.

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Will be interesting to keep an eye on the house price figures @cryptotrader, the govt has a long history of intervening anytime the boomers nest egg is threatened but by now most need help from the bank of mum and dad to even contemplate buying one. Something of a paradox.

When you say 'next year' are you meaning 2019?

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Dax looking at the 10640 resistance level after the NFP beat. Was looking at client sentiment for Dow (56% long) and was surprised by the other indices as well as the 'most' open positions (see pic) the US large caps.

Did also note the IG disclaimer at the bottom of the page and the new year's amended loser rate, up from 79% to 81%. Hands up who's responsible for that. 👀

ps; remember to be logged in for the expanded market data pages.

pps; Dax now looking to 10712.

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Worth taking a refresher look at the daily charts. Dax did progress as expected in yesterday's post as did Dow and both now approaching new resistance though Ftse looks untroubled and has pushed on ahead.

Looking today for continuation upward if Dow can leap the blue resistance level 23881.

Still no hard news out of the China-US trade talks but there must be something sometime and it will move the markets.

nb; the COT report has been held up due to the US gov partial shutdown. 

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Quite right @TrendFollower  the market can turn any which way on new news but I also wouldn't assume good news either. The unknown is always 50/50 until it becomes a known so it's a case of preparing for either. Some would have us believe that markets are technically driven but that is not so. Fundamentals are the market drivers, technicals just describe how price moves in order to get there. 

That is why I always wait for direction to be evident and a most obvious target identified and only then look for an entry point. It's just not worth trying to second guess the market, you will constantly be getting trapped. I don't even try to catch turning points anymore but rather wait for the first pullback to fail to be a reversal and join the continuation of the new trend.  

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Dow did attack the 23881 but failed this morning and PA somewhat aimless since ranging within the 4 hour support and resistance levels (green) while Dax has been gyrating around 10911. Ftse holding up well but not able to break away on it's own.

Will be looking to the afternoon session for another attempt at the resistance levels though traders may be waiting for the latest FOMC meeting minutes published today at 7 pm which could well provide a spur one way or the other.

5 min charts;

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The indices just pulling back a bit after a lack of much detail from either side after the end of the US-China. Fed minutes and members reiterating a dovish shift in outlook and both Powell and Bullard to speak today (around 5:40 pm) expected to continue that theme.

All looking for short term support this morning with a view to another leg up.

Zoomed out 4 hour charts; 

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The Dow (and others) at a significant position on the daily chart, a break to the upside will throw it back into the higher band range while a break to the downside ...

Friday not a good day for major breakouts but given the Feds new respect for the emotional turmoil of the markets and so their easing up of a systematic rate rise approach and given an easing of US-China trade tensions further upside is anticipated.

But, as ever, new news can make the markets reverse on a pin head so as always, be ready for anything. 

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All looking poised for a break higher. Interesting Reuters report this morning that the markets are pricing in no further rate hikes this year at all and that plans are being made for China's president Xi to visit Washington latter this month.

https://www.reuters.com/article/us-global-forex/dollar-slips-on-fed-chiefs-patient-comments-idUSKCN1P501T

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Very similar story to yesterday, a morning attempt to break higher failed except for Ftse which was soon reeled back in. 

Yesterday saw the break upward after the US open, same may happen again today though being Friday any move may be subdued.

5 min charts; 

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US session and weekly close sees Dow back up to challenge resistance leaving the others left lagging. The daily Dow shows a second day attempt to drive lower thwarted and price back to nudging this very important level.     

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Dow just backing off the short term high pre Monday open, on the open will be looking for a run up to retest those highs and possible continuation.

Reuters reporting increasing concerns re China economy https://www.reuters.com/article/us-global-forex/aussie-kiwi-dollar-tumble-on-poor-china-trade-data-idUSKCN1P800V

JPY public holiday today.

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