FTSE 100 October 2004

[goshort]

alliance


Regarding your thought on shorting ftse @4650, I suspect it may have further to run and that from a (post election) bear who suspects that the sirens call to us to go long before the eventually turn on us and have us for dinner...somethings don't change.

QUOTE]

I agree, although there is already daily divergence, the market may well run up a lot higher before it turns. Additionally we have a year high here, institutions and funds could chase the move, feulling it further.

I also agree that from a chart perspective FTSE has dislodged itself somewhat from the DJIA and this is an interesting point.

Paul(goshort)

 

[barjon]

And for next week?

Everything I've got - swing, candles, bar, p&f - points unequivocally north. And when that happens........

good trading all

jon

 

[goshort]

And for next week?

Everything I've got - swing, candles, bar, p&f - points unequivocally north. And when that happens........

good trading all

jon

Barjon

Wouldn't it better for those that are short to take a loss and then keep their powder dry - use your methods to indicate when is the time to come back and take that short. There will be shorts in the future but if you commit too much on any one trade now hoping that things will get better it could be painful. Even something as simple ast waiting till the ADX starts to flatten out will be the first sign that momentum is changing and then you can get ready to take the down move.

rgds

goshort

 

[FetteredChinos]

FWIW i have this in mind for this week...

am currently short from 4700.

targeting 4675 today/tmr..

then from tuesday's close we may have a big move day on wednesday. not sure which direction, but we could see either 4720, or 4600 or very close to either.

if we see 4720, that should be pretty close for the absolute top for some considerable time (4750 was the figure i had in mind)

4720, on wednesday would see a bearish couple of days on thursday/friday


please dont trade off these numbers, they are just my provisional calculations for the week, and could change depending on the next few days action..


FC

 

[barjon]

goshort

Not for me to suggest how others manage their trades. I can only repeat what I said towards the end of the September thread that I'm only still bullish because I've seen nothing in my charts to tell me otherwise. Since then we've had a nice swing low @ 4530 and it's a drop below this level (assuming no other forms at a higher level) that'll tell me to wear the intermediate trend bearskin. For the longer term trend the support @ 4300 needs to go.

good trading

jon

 

[bracke]

There is various data due from the US this week and Mr Greenspan is giving one of his talks.

The US Election is only 4 weeks away so positive news would be very nice for the Bush camp.
If the news gives the US markets a nice shot in the arm it just makes it all the more pleasant for the major players when they decide enough is enough and decide to take their profits.

On the other hand you may think that it would set things up nicely for a bull market for a year or two.

Each to their own.

Regards

bracke

 

[peterpr]

alliance

ps peterpr would you like your bearskin well done ?

Had the whole damn thing - rare - mid-day Friday - see post #9. Bloody revolting it was too!

I've been out of the market (FTSE anyway) since Friday morning. Looking at the US I'm expecting further upside there today - which will probably fuel the UK some more. I find it near impossible to put a logical upper estimate on this move right now. I've no doubt that, in addition to 'irrational exuberance' + clever, canny trading (pace BarJon), it has also been fuelled by masses of forced covering of speculative shorts (mine included!) - Funny thing is that volume was nothing special - which, if we are nearing a major top (still my macro-stance) argues for quite a bit more upside yet (On the basis that major turns are usually signalled by a crescendo of volume)

 

[peterpr]

There is various data due from the US this week and Mr Greenspan is giving one of his talks.

The US Election is only 4 weeks away so positive news would be very nice for the Bush camp.
If the news gives the US markets a nice shot in the arm it just makes it all the more pleasant for the major players when they decide enough is enough and decide to take their profits.

bracke

My take is that Both major Camps in the US election would probably prefer calm serene financial etc markets in the run up to polling day.

To the extent that Federal authorities (and the big financial players in both camps) can act to secure such conditions (albeit probably only temporarily), you can bet the ranch they're going to do so. I follow about a dozen US commentators/analysts closely (on balance bearish but plenty of Bulls too). It's surprising the degree of unanimity there is among them on the subject.

Pretty well every analysis is presented with just that caveat.

 

[barjon]

.............(On the basis that major turns are usually signalled by a crescendo of volume)

peter

Wish I could understand this volume business. The July down move was accompanied by a real crescendo of volume. It looks as though this was significant - with the bright light of hindsight I suppose you could argue that the bulls were taking on all that was thrown at them until the bears were exhausted which, in turn, could explain the succeeding fast up move on low volume where remaining bulls needed to bid up sharply because there were few bears left to sell. On the other hand it's all too easy to rationalise any past price action with spurious reasons.

Any volume experts like to comment?

good trading

jon

 

[bracke]

peterpr

My commiserations on your Bearskin lunch and the indigestion that probably followed.

Looking for something positive from the event, do you now consider yourself a wiser person and what have you learned from the episode ?

Regarding the "calm serene" comment. I accept that Mr Bush does not want lots of action but it would do him no harm if he can allude to what appears to be a strong, healthy market without being to overt about it. After all the comment "its the economy, stupid" says it all. After the election all bets may be off but then thats what politics are about.

Regards

bracke

 

[peterpr]

peter

Wish I could understand this volume business. The July down move was accompanied by a real crescendo of volume. It looks as though this was significant - with the bright light of hindsight I suppose you could argue that the bulls were taking on all that was thrown at them until the bears were exhausted which, in turn, could explain the succeeding fast up move on low volume where remaining bulls needed to bid up sharply because there were few bears left to sell. On the other hand it's all too easy to rationalise any past price action with spurious reasons.

jon

Jon

I'm certainly not a volume expert - or any other kind for that matter but....

my understanding of the 'volume crescendo' argument is that cumulative volume increase is synonymous with bandwagon-jumping. - ie by the time everyone has decided to get on, its near time for the smart ones to get off - and pretty sharpish - or something like that.

 

[peterpr]

peterpr

My commiserations on your Bearskin lunch and the indigestion that probably followed.

Looking for something positive from the event, do you now consider yourself a wiser person and what have you learned from the episode ?

bracke

Thanks Bracke

I always take away something positive. No big deal really.

My 'calm and serene' comment was not just about the Bush camp's interests. I reckon it's easy to overestimate the incumbent pary/president ability to bring major influence to bear. At this stage in the electoral process its probably fair to say that, so far as the markets are concerned, the interests of both are pretty much coincident.

That said I think the incumbent can sometimes have major and calculated influence at obvious potential market turns. For example, there is a large body of opinion that views the release of strategic oil reserves back in August and the $44 billion or so of new M3 created just last WEEK after two months of flat money supply figures, as calculated to lift equity markets. It's probably not something that Kerry is going to get excited about either, so why not?.

 

[goshort]

peter

Wish I could understand this volume business. The July down move was accompanied by a real crescendo of volume. It looks as though this was significant - with the bright light of hindsight I suppose you could argue that the bulls were taking on all that was thrown at them until the bears were exhausted which, in turn, could explain the succeeding fast up move on low volume where remaining bulls needed to bid up sharply because there were few bears left to sell. On the other hand it's all too easy to rationalise any past price action with spurious reasons.

Any volume experts like to comment?

good trading

jon

Jon

Agreed easy in hindsight.

But concerning volume, if you consider that in a down trend sellers are most of the time or generally in control and that in an up trend buyers are mostly or generally in control, then what does it take to reverse either one of those scenarios?

Take the down trend - sellers are in control on "x" amount of volume, and the market is gradually moving lower, the only way that sellers can be robbed of their control is by buyers coming into the market and overwhelming them. What actually happens is that the voulme will then increase. So we get more than "X" volume, because we have the selers who are selling and we have all these new buyers are who are buying. This is why on turning points you see increasing volume.

When the sellers capitulate you may get a reversal bar. During the following bars the down trend will have at least bee arrested and the market will probably move higher on lower volume and this indicates that the tables have been turned - that is to say - that buyers are now in control and can gently move the market upwards - the sellers have sold out.

This is how I see it.

I have attached an example of this from this mornings DAX trading.

Good trading

Paul

 

[bracke]

peterpr

Without wanting to go too deep into the US election tactics.......Is Kerry going to rely on his Iraq difference with Bush as their main difference.

I get the impression, and I may be incorrect, that the US population may not be too pleased about Iraq but when the chips are down and the vote has to be cast the economy plays a large part in the final decision. If that is the case Kerry needs to be able to point to an underperforming economy, even though he may have done nothing different.

As to Kerrys failure to react to the money supply input. I suppose he cannot be seen to be anti something that appears to assist the economy far better would be an economic reversal that he could point to as poor policy and management.

Perhaps the more 'interesting' time will be next year after the election and what action, if any, is taken to correct debt and balance of payment problems.

Regards

bracke

 

[barjon]

Jon


I have attached an example of this from this mornings DAX trading.

Good trading

Paul

paul

good example.

mmm, in general I see it slightly differently if you start from two facts: 1. For every sale there must be a buy - thus buys and sells are always equal and there can't be a preponderance on one side or the other. 2. You can only sell at a price if someone wants to buy at that price (forgetting spread) and vice versa.

There can, of course, be a preponderance of buyers or sellers waiting in the wings, either because of new participants arriving on one side or because of numbers on one side reducing (or because the price isn't yet right). By the time a volume bar prints it's history and we're only interested in it to give us clues about who's waiting in the wings.

So, in your down trend, sellers continually need to offer down to attract buyers and it's maybe a clue that more sellers than buyers wait in the wings. When there is large volume, more of those sellers are able to offload because more willing buyers have arrived and that's maybe a clue that there may soon be more buyers than sellers in the wings.

Does that sound logical? I wonder if it's right

jon

 

[alliance]

as I was saying...

FWIW I would be looking to go short on the FTSE near 4650...but what do I know

I rest my case, thankful I didnt trade it

Bracke:
again FWIW (not a lot I know) ..I am not a Bush fan, but imho I doubt he is in much danger from Mr. Kerry, and the markets know it too! A bit like Blair v Howard..no contest methinks

 

[goshort]

paul

good example.

mmm, in general I see it slightly differently if you start from two facts: 1. For every sale there must be a buy - thus buys and sells are always equal and there can't be a preponderance on one side or the other. 2. You can only sell at a price if someone wants to buy at that price (forgetting spread) and vice versa.

There can, of course, be a preponderance of buyers or sellers waiting in the wings, either because of new participants arriving on one side or because of numbers on one side reducing (or because the price isn't yet right). By the time a volume bar prints it's history and we're only interested in it to give us clues about who's waiting in the wings.

So, in your down trend, sellers continually need to offer down to attract buyers and it's maybe a clue that more sellers than buyers wait in the wings. When there is large volume, more of those sellers are able to offload because more willing buyers have arrived and that's maybe a clue that there may soon be more buyers than sellers in the wings.

Does that sound logical? I wonder if it's right

jon

Jon I'll post again later but here is another example from the YM a few minutes ago. The bearish reversal bar to me can only be due to sellers swamping the buyers. The spike in Vol shows this.

Rgds

Paul

 

[FetteredChinos]

nearly got my 4675. looks like we may have to get there early tomorrow. possibly by a gap down...

thereafter, we may get a bit of congestion and an inside day.

big move to come on wednesday.

is the the MPC interest rate decision day?

perhaps a surprise further increase?

FC

 

[peterpr]

peterpr
Without wanting to go too deep into the US election tactics.......Is Kerry going to rely on his Iraq difference with Bush as their main difference.
<Snip>
bracke

This is probably not the thread for this discussion so I'll just post this reply then try to confine myself to footsie a little more closely:

From the perspective of the general US public the economy is not underperforming. A serious market decline right now would make little difference to either campaign other than to 'stir-up' economic issues - that could rebound unpredictably on Kerry as much as Bush. Better for both to just keep the feel-good factor/status quo simmering if possible.

The real US problem is its burgeoning twin deficits; housing finance bubble; unfunded mind-boggling pension and medicare liabilities and the astronomical level of consumer debt + a few other nasties. Kerry can hardly say his reponse would be to raise taxes, devalue the dollar etc. or blame Bush when both are in denial about there being a problem in the first place (it is that bad!) - and much of it grew on the Clinton watch anyway. In truth there's a conspiricy of silence betwen both camps about the whole US mess.

You're right about next year though - and maybe earlier with the mutterings coming out of China, the IMF etc.

 

[barjon]

Interesting candle today, guys. A shooting star(ish) doji which, if confirmed by a lower opening and down move (or a strong down move) could warn of a top.

First bit of potential support comes at the mid-point of the long white with potentially stronger support at its base.

good trading

jon