FuturesTechs Blog

So goes January, so goes the year, is a phrase often circulated around the market as the big players and fund managers decide how they want to be positioned for the year ahead. January 2012 was an exceptional month distinguished by significant rallies in banking stocks, tightening of European bond spreads, and a resurgent Euro.

FuturesTechs Liam Roberts wrote a brief review of January highlighting noteworthy technical points across various assets and sectors. Click the link below to read the review.

futurestechs-january-review

For further information regarding our service or a free trial of our service please naviagte to the Contact us tab on our website.

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

One of our services offered to clients is providing trade recommendations in UK equities. After taking a step back from the market last July – October when Risk Reward opportunities weren’t viable given the intraday volatility, our service has resumed and run consistently since December. Capitalising on the year end rally and move so far this year recent recommendations report solid returns. (For a spreadheet of our Trade Recs please contact us)

Our current outlook for the FTSE itself remains bullish in line with the recent trend higher although a lack of volume is worrying as we approach significant resistance as shown by the FTSE chart below.

As such, the Risk Reward for further upside in the FTSE isn’t particularly favourable so our recent recommendations have focused on short opportunities. Obviously such action is risky given the trend of the market which is why we’ve looked into stocks that have recently released fundamental news and reacted with a large increase in volume. Two such instances are Tullow Oil and Morrisons Supermarkets.

Tullow Oil has been trading within a broad sideways consolidation since September but continues to fail around 1470. After releasing an update the stock gapped lower to post an ‘Abandoned Baby’ candlestick reversal. Additionally a failure at the underside of a broken up trend line has provided an opportunity for a short trade running a stop above the recent gap lower.

Morrisons Supermarkets posted a massive reversal candle at the start of the year and hasn’t looked back since. After selling off significantly Morrisons lost further ground and gapped lower following comments from rival Tesco. A counter trend rally has returned to the 38.2% retracement and a break above short term swing highs at 298 was rejected yesterday to post a Bearish Engulfing Candle on good volume. Trade below yesterdays low begins to confirm the Bearish Engulfing candle providing an entry for a short trade whilst running a stop above the Gap.

Both these trades have been sent to our clients and although against the trend of the market their relative underperformance, fundamental news flow, and increased volume increases the probability of the trade. This is why stock selection is key.

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.

Dear All, We welcomed an old friend and buddy from the LIFFE Floor days to FuturesTechs Mews this morning and he insisted we did a webcast together, which was great fun. It can be seen on the Naked Trader website here:

http://www.nakedtrader.com/webcasts/tony-laporta—-please-click-here-to-reach-me-directly-via-email/9-26.aspx

Enjoy!

Cheers,

Clive.

Here is a tick chart showing last night’s shenanigans in Natural Gas, where it looks like two Black Box “Algo” systems had a right good go at each other for 2 minutes, steadily increasing the range (on hardly any volume) until one of them gave up!

So I’d call this chart “When Algo goes Bad”…

Have a good day!

PS We write daily Technical Analysis on Natural Gas, as well as the entire Oil/Energy complex, Metals, Commodities, Equities and Bonds. Click here for a free trial.

For today’s Forex “Lunch” Report we looked at the Dollar Index . As well as covering 4 major FX Crosses every morning we also send out a lunchtime update on anything that’s of interest in FX Land!

Below (click on the picture to get a full size version!) is today’s chart for the Dollar Index, showing reasons to think we may be heading back lower again.

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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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Below is the Comment and Chart from today’s FuturesTechs report. As well as this we provide Support and Resistance levels from our own analysis, as well as “Automated” levels referencing Market Profile, Pivot Points and Moving Averages.

If you would like a free trial of our daily technical analysis reports please click on one of the links below:

“Professional Trial”, for Traders, Fund Managers, Brokers etc click HERE.

“Website Membership” for Individual traders, suitable if you’re Spread Betting or trading CFDs click HERE.

From yesterday: “Backing either camp is proving difficult in this volatile environment so our Skew turns neutral’

Sideways consolidation at multi month highs remains the story, albeit in a volatile environment. The dip below the previous days low found buyers at 1328.75 who rallied the market up to 1348.75, the previous breakdown level, on good volume.

Yesterdays low validates an up trend line from the low on the 14th March. Today this trend line provides support at 1330.50. Yesterdays downside rejection in conjunction with the validation of the up trend line means our Skew switches to tentatively bullish above 1330.50.