FuturesTechs Blog

2012 has started well for equity investors as January has seen gains across the board. A standout performer is the Dax which has gained 10.9% YTD as of the close on the 26^th January. Mainstream financial media would have you believe that the ESM, EFSF, ECB’s SMP, QE 1 and 2 (3? around the corner) and various other three letter acronyms (TLAs) created by the establishment have rescued capitalism and the financial system from sure disaster. Undoubtedly an exceptional amount of liquidity has been made available to financial markets and as a result asset classes have been boosted, but as a Technical Analyst there are signs that particular markets may be due for a pause.

Yesterdays blog post included the FTSE Index approaching a significant Fibonacci retracement and testing a trend resistance line as shown below (Click on the picture to enlarge it)

Today we highlight a similar situation in the DAX (Click on picture to enlarge it)

The chart shown is the Dax Future and highlights the recent rally approaching resistance. An old trend line which has proven both resistance and support, and the 61.8% Fibonacci Retracement level of the July ’11 to September ’11 bear move are both being tested during this weeks price action.

The Dax has a particular relationship with the 61.8% retracement and often provides critical points of consolidation and often reversals. In September ’11 the Dax consolidated around the 61.8% retracement of the 2009 -2011 bull market and whilst the popular press and general consensus continued to call for lower prices the Technicals indicated a reversal was due, which I highlighted vehemently in our reports and in a special webcast. Another worrying sign is the lack of volume attributable to the gains seen so far this year suggesting the weight of ‘Real Money’ is unwilling to partake in higher prices, making them less sustainable.

So while the general consensus is for higher prices supported by unlimited liquidity from Central Banks worldwide, the Technical Outlook suggests the bigger picture Risk/Reward doesn’t favour the bulls.

Please navigate to the relevent buttons above to request a Free Trial of our reports, which cover all the major Equity Indices as well as Bonds, Commodities and Forex.

Liam Roberts MSTA

We are pleased to announce that our ipad/iphone App is now available to download from the App Store (simply search for “Futurestechs”).

We would like to invite you (client or otherwise) to download the App.

We are running a 2 week Free Trial Period when you can look at all the reports (After that access will be limited to 1 “sample” report per day).

We would ask that you pass this e-mail on to any friends or colleagues who you think may be interested.

Also any reviews of the App would be most helpful and appreciated, so if you like it please take the time to add a review to the App store.

As you can see from the screen grabs below (click on them for a full size view) the reports look really good on the ipad and, thanks to our friends at wordflow, navigating around the App and finding the reports you want is really easy.

Anyone who decides to subscribe will also be given free access to our Website Member’s Area (in case the kids are hogging the ipad!!) where all the reports are also posted daily.

Cheers,

Clive.

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!!

As the FTSE Futures near important resistance levels, the Year’s highs, we posted a comment this morning that started off in our normal level headed manner, then descended into something of a rant! Here it is for all to share!!!

“Today could be all about 5950. A hold above here keeps the bulls in the box seat and suggests we can head to 6030 then 6086.5″.

Stop there! Say no more. We held 5950. We bounced from a low of 5968 to hit the heady heights of 6033.5 by the day session close, getting up to 6039.5 in the after hours trade, and 6044 in today’s overnight trade.

So we are seeing off 6030 and now have our eyes trained upon 6086.5-87.5, the February high. This rally is on low volume. Back it while it lasts, but don’t be surprised if it doesn’t, and don’t come crying to me if it falls over, because I’ve been worrying about this and warning about it all the way. Houses built on sand don’t stay up for very long. Rant Over. Enjoy the Wedding!

As well as the FTSE FuturesTechs covers 22 markets every day, giving Chart, Support and Resistance levels, plus Commentary each morning before the markets open. This award winning service is widely read by Investment Professionals, and some of our clients have been with us since we started over 10 years ago.

If you are an Individual Trader please go to http://www.futurestechs.co.uk/trial/ to request a free trial of our Web-based service.

The same reports are available to Fund Managers, Brokers and “Pro” Traders in printable format. If you are in this category please request a trial at http://www.futurestechs.co.uk/professional_trial/

The heroics from Ben and Hank that I spoke about in yesterday morning’s Blog were squarely ignored by the markets. Despite the rescue of Fannie and Freddie we sold off harder than any day we’ve seen of late, just from a higher base.

We’re going to start the US session from a low base today, so will we recover? I wouldn’t bet on it, but George Bush and Ben Bernanke will do their best to say the right things again.

The FTSE 100 Future has been down to 5150 today, the lowest price printed since October 2005.

It doesn’t look like the selling is over, but we are starting to get that “capitulation” feel about things, aren’t we?

Right now it’s worth remembering two really naff phrases that often get rolled out, and in my opinion should be rolled out more often:

Naff catch phrase number 1: “The Trend is your Friend”

Naff catchphrase number 2: “Bottom pickers get dirt…” I don’t think I need finish that one.

Lastly, another one that I think is quite relevant right now:

“Denial is not just a river in Egypt”.

Have a good day and be careful.

Cheers,

Clive.