FuturesTechs Blog

A few days back we said: “Dips are being bought, the bulls are in charge, and we’re not going to be caught batting against such a solid trend. Oh no!”

The market is in a rampant mood now, and put on stellar gains yesterday, trading up to then through my 1340 target (we’ve been talking about this as a target all year!).

We busted through the channel top line, RSI is overbought (the highest reading since 2005 in fact), and everything looks like it’s getting a little bit carried away. We are aware of this, and aware that sometimes this is the sort of thing that happens at a top. But that doesn’t mean we’re “calling” a top, because we can still see further upside in these sort of conditions.

If we break below 1328.2 things could start to unravel pretty quickly as I think there is now a fair bit of “speculative froth” appearing on the surface now.

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Below are Support (S1 to S7) and Resistance (R1 to R7) levels. On our daily reports we also include a chart, “Automated” levels including Pivot Points, Market Profile levels and popular Moving Averages, as well as our unique “SkewBar”, giving you an instant snapshort of the current short term trend.

Our daily analysis is read by Prop traders, Brokers and Fund Managers. Please feel free to request a Free Trial of our service.

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R7  - 1425

R6  - 1410

R5  - 1404

R4  - 1400

R3  - 1379.4

R2  - 1373.4

R1  - 1350

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S1  - 1345.7

S2  - 1342.9

S3  - 1333.8

S4  - 1328.2

S5  - 1324.8

S6  - 1319.8

S7  - 1313.3

WHAT DO WE THINK NOW?

At FuturesTechs we analyse 28 different markets each day and give our trading clients regular up to date analysis on the current thinking and market’s state of mind. We look at Bonds, Forex, Commodities and Equities. At the moment Stock Markets are the most interesting, providing the biggest conundrum for traders and operators.

We believe that Fundamental analysis is flawed (by not taking into account sentimenrt), and that most Economists get it wrong. A far more sensible way to look at the markets is to work out what the trend is, and stick with the trend, then do your best to spot (as early as possible!) any changes in trend.

One thing we’ve learnt over the years is that the market usually tops out when most people are getting bullish, and dashing in to get long, afraid to miss out. In other words when people are getting greedy. This could definitely be applied to Gold at present, and probably also to Equities!

The opposite situation creates bottoms and emerged in March when Equities bottomed out  -

Fear gripped the market and everyone ran for the door. We didn’t. We took a step back, and realised that many in the market had given up, that there were plenty of doomsayers talking the FTSE down to 2500. Our analysts said at the time that the market was nearing a bottom. In fact we said it on CNBC, so if you don’t believe us click below link to have a look.

There is a saying that “Harry Hindsight is the best trader in the world”, and we would suggest that if anyone says “I got long back in March” ask them to prove it!

In recent weeks we have been concerned that this up move is coming to an end, and despite the fact there is usually a “Santa Claus rally” we are still erring on the side of worrying about downside risk. We really haven’t gone very far since September, if you take a step back and look at things.

I used a Warren Buffett line last week in one of our reports and it sums up quite well everything I’ve said above.

“Be fearful when others are greedy and be greedy when others are fearful”.

He’s done quite well out of it!

We follow the trend, but are always looking out for when the market’s psychology gets to an extreme.

Feel free to ask for a Free Trial by clicking the link below. Don’t forget to click below as well to view our comment on CNBC back in March.

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Check out Clive Lambert’s March 4th CNBC appearance here.