The last few days have seen some big swings either way in Equity markets.
“Where next?” I hear you ask! Our chief market analyst Clive Lambert was on CNBC last night trying to pick the bones out of this price action, looking at the S&P 500 Futures, FTSE Futures, and suggesting Fresnillo as a Stock to buy.
See it on our media page by clicking here.
This morning’s reports on Silver and the FTSE would have reaped dividends for our clients, for different reasons.
Here’s the text of the FTSE Futures report:
We have posted the “all sessions” chart today because it’s actually a bit cleaner, and also shows what we’ve seen overnight; selling.
Selling to the 200 day MA as well, this well watched proxy sitting at 5771.5 today.
Yesterday’s low was 5827 in day session trade so this is a bold resistance above, and if the bulls don’t quickly retake this mark we will likely break through 5771.5 and head to 5615.5 then 5584.
If the bulls can dust themselves down from this weak open and get us back through 5816 and 5827 we then need to retake 5869.5 then fill the gap to 5912.
My gut tells me this weak open is a buying opportunity. The chart tells me otherwise…
Nice “gut feeling”!
Our Silver commentary was a bit more “nailed on”, and since we sent it out first thing this morning in the UK it traded up to 37.330 (as we tuck into our lunch in the UK, awaiting the open in the US):
Lunchtime (in the UK!) Update: We now have day session gap support at 36.400, protected by the broken resistance at 37.020, the latter having done a job in the last hour or so “on the retest”.
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Last week we posted a Blog about the potential Head and Shoulders pattern forming in the FTSE Futures. Things got interesting with respect to this yesterday, which was the crux of our morning report, reproduced below.
The fact that we’re not breaking this line PROPERLY does suggest the market’s ambilvalence is set to continue.
Towards the European close yesterday we were selling off, and we’d got through 5858, the Neckline of the Head and Shoulders pattern that we’ve been watching of late. So on the “Day only” chart that we prefer, as above, we have a slight closing break of this Neckline, and a sell signal.
Except we’re called 50 higher this morning and this will instantly tell us that the sell signal is a false one.
It looks like the market is happy in it’s current moribund range-bound confused stupor, and we’ve got to put up with this situation for a bit longer.
We’re not getting any firm signals at the moment, then, and this counts for the Individual stocks as well, making our (and your) job a rather tough one.
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We have sent an extra report to our customers this morning, outlining the POTENTIAL sell signal that’s looming in the FTSE Futures. Here is the text and accompanying chart:
We have a potential “Head and Shoulders” pattern forming in the FTSE, although the sell signal has not been given yet.
The sell signal comes if we break the “Neckline” which is at 5851, and probably on a closing basis as well (although a “clean” break on high volume would convince me enough to take the signal “intra-day”).
The target, using the traditional measuring technique for this pattern, would be 5600.
Of course this also comes off the back of the recent failure at 6095, which was very similar to the February high/failure (6086.5). The “Double Top” sell signal from this situation would only be triggered on a move through 5584.5, so a long way off yet….
5851 is on the radar, however, so “Watch this space!”
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Below is a sample of a note we sent to our “Premium” clients today; those clients who receive our Trade Recommendations service covering Individual UK Stocks. We’ve gone a bit quiet on this front of late as we await some clarity from the markets. In fact it’s been one of the most frustrating periods I can remember on this front! This frustration may show in what we put out. If you are trading or Broking CFDs on UK Equities and required Technical Analysis to aid your decisions or offer ideas please let us know (clikc the link below) and we’ll set you up with a Free Trial.
http://www.futurestechs.co.uk/professional_trial/
So to today’s note:
If you’ve been wondering why we’ve been so quiet of late it’s because we’re doing lots of head scratching when looking at the charts right now. The Equity markets have been a very fraught hunting ground of late!
So with an apology for lack of recent recommendations here’s proof that we’re not just sitting around doing nothing: A list of every FTSE Stock with a line (sometime just a word!) to say what I’m seeing and why we’ve not got a conviction trade on!
AAL - Looks heavy, but is holding it’s 200 day MA (2950) and previous support in the low 29’s. Scope to 2490 if it breaks
ABF - Very rangy feel to the chart in the short term. Bigger picture suggest scope for weakness to 960 or even 920.
ADM - Hasn’t done anything since September
AGK - Could be worth buying, looking for a hold above 1700
AMEC - Hasn’t done anything since November
ARM - Probably worth buying, but Reward/Risk isn’t right
ANTO - Looks bearish, but downside could be restricted to 1208
AU - Going sideways - No trade here
AV - Going sideways - No trade here
AZN - 200 day MA at 3095 might weigh. 3145 and 3175 also resistance
BAE - Been going sideways since October 2008!!
BARC - Breaking support at 277.50, but next support is 261, then 256, then 253. Too many supports below for a decent short risk/reward wise
BATS - Bullish, should hold 2645
BG - Broke support at 1400 last week but came roaring back. Gap above at 1498 is a worry for the bulls though.
BLND - Slow, steady riser. Good one to hold, but buying at these levels?
BLT - Left an “Island Reversal” back in April, when we shorted it. Scratched the trade on the subsequent high. Doh!
etc etc!!
In Brief: All I keep hearing at the moment is how we will have a 10% correction, so, let’s have a look:
The “funnymentalist” community, particularly Stateside, seem pretty happy with the idea that this pullback will be a “normal” affair and will pull back 10% from the January highs, at which point you can happily pile in, buy the dip, and carry on where we left off…
I thought it would be useful to know where this level is on the markets we watch. So here goes, and we’re looking at the Cash Indexes here, NOT the Futures:
Dow: High was 10730. 10% pullback level is 9657 (currently 10023)
S&P 500: High was 1150, pullback level is 1035 (at 1065 right now)
NASDAQ: High was 1897, pullback level is 1707 (1743 now)
DAX: 6094 was the January high, 10% off that is 5485. BROKEN
FTSE: 5600 high, 5040 is 10% pullback. 5033 was last week’s low, so holding…
Eurostoxx: Pulled back from 3044. 10% back from here is 2740. BROKEN
CAC: high was 4088, so 10% back from there is 3680, BROKEN.
So to summarise, if anyone stateside says to you about 10% pullbacks the simple thing to say is “thanks, but we’re already beyond that!”… especially if/when the FTSE breaks 5030-40.
Keep safe in these markets.
Last week’s big highlight was meant to be the US Employment Report. As it turned out all the action was before this, and the numbers were a bit of a damp squib (like the topical analogy there?).
Equity markets have caught a fresh bid, and we were early to catch this as there were several reversal patterns on major indices at the start of last week. We were bullish from Wednesday onwards, so have reaped some firm rewards on the back of that timely change of sides.
Most of our readers are short term traders so they benefit from these timely “calls”. Longer term traders and Investors may be on the sidelines waiting for an opportunity to get in, and coming out of a dip or retracement is an ideal opportunity. Often, as was the case last week, our charts can tell us nice and early if it’s likely that a pullback has come to an end.
We are now looking to see if resistance at 5300 in the FTSE Index will be seen off. If this happens the next upside target is 5650, a failure high from last August.
Gold is on another big run at the moment and has traded up to a high of $1111 as of yesterday morning. Yesterday’s candlestick (A “Shooting Star”) gave a warning that things may be getting toppy at these levels but so far we haven’t seen any downside moves to confirm this, so we’re sticking to the idea of higher prices going forward, targeting $1192 next, then $1250.
Oil is stuck in a range for now. Brent Crude has traded between $75 and $80 for weeks now. We expect this range to get broken with a move higher, and we would then target $90 and beyond. We have been suggesting to our clients to buy the dips to $75, and whatever their timeframe this has worked out well. Longer term holders would never have been offside, whereas those who trade in and out should have been able to jump out at $78 to $80 on several occasions then buy again at £75 next time it comes off.
If you are uncertain of any of the terminology used or methodologies discussed in this report you could swot up on our website. Feel free to ask for a Free Trial by clicking here.
Yours,
The FuturesTechs Team
Weekly Roundup, 19th to 23rd October.
Last week was a fairly mixed affair, particularly in Equity markets. The FTSE’s range for the week was 5166- 5299, and Friday saw the top end of this retested just before the US Markets opened, which triggered some afternoon selling. Quite often Friday afternoon sees traders tidying up positions that they’ve been holding all week, so if the market is long then you see selling on Friday afternoon as some of these longs are trimmed.
As far as individual stocks are concerned Miners and Resource stocks are still amongst the leaders, whereas Bank Stocks have been having a much tougher time. The “strong” banks like HSBC and Standard Bank are the safest bets for longs. We are seeing Utility Stocks finding support and starting to turn now and this is something that often happens at tops, with the real money moving into safe havens. We suggested buying United Utilities and Shire Pharma to our clients last week, which gives a clue as to our thinking. We are starting to short consumer related stocks as their charts are starting to agree that we are still in recession and things aren’t really improving.
The Dow has, as we suspected, shown a complete disregard for 10000, but we do seem to be having trouble getting through 10110-120, where we topped out each and every day last week. We are happy with our current “cautiously bullish” stance, and we continue to advise our clients not to get too excited about the prospects for higher prices.
Gold continues to go sideways, frustrating all of those who have piled in And got long because we got through $1000. We always thought $1034 was more important, and we’re happy to be long of this while this important technical level is holding firm.
In last week’s round up we talked about the change in skew we’ve been forced into in Oil. We had been favouring the bears but then we got above $75 to change our stance. Sure enough this has continued higher, and we want to see $78 holding now to give us a launch pad for a move to $90 and beyond.
Finally can I remind you it’s the World Money Show at the end of the week and we’re going to be exhibiting. We are running a competition to win an Apple iPod 3G, so if you can make it please come along and say hello.
Click here to register for free.
To request a free trial, with no obligation, of FuturesTechs’ daily analysis service please click here.
Have a good week,
The FuturesTechs Team.
We often get asked “How can I use your product?”
FuturesTechs provides support and resistance levels to professional traders across a range of different Futures markets. They use our levels as the basis of their day trading.
Unfortunately I often come across traders using them in different ways, so it’s tough to give a definitive answer to that question. We are all different, and do things in different ways, and the individual’s interpretation of the levels we produce is no exception.
Let me make something clear right now. A lot of what we do here at FuturesTechs is basic common sense. We are almost “reporting” the technical news.
Take today’s FTSE Futures price action as an example. In our report this morning we talked about how important resistance at 4220 was, and we made this a bold level to make sure our readers got the message!
It was a VERY obvious level, being Friday’s high: Quite simple, unless you decided to ignore the simple and obvious.
It gave us the high this morning, not once but twice.
The low between these two highs was 4174, so we got a sell signal (Double Top) on the short term (eg 10 minute) charts once this gave way. We had 4163 posted as our first support, so on the way back down (if you hadn’t sold at the bold resistance at 4220) there were two more opportunities to sell; once we broke 4174, or even safer once we sold off through 4163.
Where to get out? We had a bold “area” of support at S5 in today’s report, between 4051.5 and 4064.5. The lunchtime low was 4066.5, where we suddenly started posting reversal candlestick on our trusty 10 minute chart - time to cash in.
Hopefully this gives some insight into how one can use technical levels to help decide where you put on trades, and where you get out.
Ideally you should aim to create trades with a basic set of criteria.
In other words In a downtrend sell ahead of an important resistance with a tight stop if it breaks.
Buy ahead of a key support level in a rising market.
But if £1.10 is an old high on several occasions it is hopeful at best to ask the market to trade £1.11, so you have set a target that’s going to be tough to achieve.
Whenever you’re looking for trades to put on you want to try and skew things so that it’s going to be tough to get stopped out, but much easier to head to your target.
This doesn’t mean you’re not ever going to get stopped out, it just means you’re stacking the odds in your favour. This is what Technical Analysis does, and what we hope to help YOU to do when you use our service for YOUR trading decisions.
And one last thing while we’re talking about stops. RESPECT YOUR STOP. It is very easy to move a stop further away if a market’s getting near to triggering your loss. If you have set a stop, then LEAVE IT WHERE IT IS!
So far 2009 has been a tough year to call. Volatility has dropped, but we haven’t gained any firm directional traction yet in most anything. Although it goes against our usual mode of operation to give longer term calls we are still happy with our overall view for Equity markets for 2009; that we will make a new low in the early part of this year, but end the year quite a bit higher than where we are now…
We have had our new website available for around 1 month now and we are starting to gain momentum for our new “per end user” offering. Private Investors, CFD and Spread Bet traders are starting to sign up and see the value of our service.
In recent days we’ve seen some interesting moves in the markets:
Gold Futures have turned over and after a plethora of sell signals yesterday we went Bearish this morning, just before the market sold off sharply.
Brent Crude Oil Futures has seen a big sell off but we’re certain this is merely a buying opportunity.
We have remained Bearish in the short term on Equity markets but our patience is being tested on this, particularly in the DAX Future, never one to willingly play the game!!
Interestingly today’s early high/failure in the S&P 500 Futures could be key and suggests that the market can head lower in the short term.
Login for a free trial to see our thoughts on these movements in more detail.
So to a question we’ve been asked a few times of late: Where did we appear from?
We have been servicing professional traders for 8 years now. The company formed in March 2000, soon after the closure of the LIFFE Floor. The traders who congregated on the LIFFE Floor headed up to different offices around this time, and suddenly they needed an edge, they needed information. I always had a string of traders who used to come and have a chat about the charts when I was based on the Floor, and so it was a natural progression to turn this into a daily commentary. I started by sending out a daily report on Bunds and T-Notes, and it grew from there. We grew with the Industry. Proprietary trading accounts for a good percentage of the daily Volume on exchanges like LIFFE and Eurex.
We wanted to expand our horizons beyond this arena, though, so it was a choice of Banks and Hedge Funds or Private/Retail Customers. Which way to jump!? We have found over the years that “bean counters” at the Institutions can cause problems for services like us, because they see a lot of free technical analysis being provided by the large brokers vying for their business. “Why pay for something that you can get for nothing?” -they say.
So we came up with the idea of a Members website where the reports can be viewed securely, on a “per end user” basis, which allows us to significantly reduce the price without upsetting our existing professional clients who pay for a “Site Licence” and the ability to distribute the reports amongst their traders.
We encourage you to take advantage of the chance to utilise this professional trading tool in your daily trading routine.