Swingin' the ftse 2010

[tomorton]

Hi Mr Flibble - We're thinking on the same lines here, its late to be going long, its certainly a good level to take profits from earlier longs, and I hope to open a short today or very soon.

If we made a higher high now, above 21/06, that would be obviously be bullish purely due to the rise: that kind of move would also probably suggest we were looking at bars well clear of the 200EMA: as 21/06 might be the right shoulder of a head-and-shoulders top reversal, that would neutralise some bearish potential there: it probably also finally neutralises the bearish 50/200EMA crossover of 01/07.

Without a higher low, an 'official' uptrend label might be premature - more likely than a parabolic break-out we will have plenty of opportunity for both longs and shorts as price swings up and down in a 500+pt range. I see more of the same yo-yo tendencies since early May.

 

[Splitlink]

I took profits last night but only because I preferred them in the account. I think that this market could come back to 5200 and still be in an up trend. Anyone shorting would have to be strict on target. I want to see what pattern develops and then may go long again.

 

[barjon]

................ Again looking for the FTSE to make the first move and the DOW to follow. .................

Flibs, I think you said some time ago that you'd noticed ftse ticks first which led you to the above quoted thought. However, it is very, very rare for ftse to lead dow.

dow (or US futures out of hours) almost always leads ftse. ftse will trade strong or weak against dow (better or worse than 1 point for 2). When ftse is keen to rise it will trade strong by rising more than 1 point for 2 dow points on the up moves and falling less than 1 point for 2 on down moves. Ninety percent of the time it oscillates during the day between periods of trading strong and periods of trading weak.

Since start of the year ftse stands overall weak by about 125 points as at yesterday's close - ie: it should be 125 points higher compared to the relative ftse/dow position at the start of the year. During that time it has been as much as 135 points strong (in March) and 330 points weak (in May).

good trading

jon

 

[Splitlink]

It's been a good morning for shorters. I am faced with the conundrum of the time trame that I have decided to follow. Mine, still says long. In fact, it's getting near the time to buy---Wall Street, too.

Due to the breaking-in of my new overnight mentality I think I will opt for caution and wait for signals before shorting. Which means I am faced with a buy signal.

So, I am looking at a lower TF for a buy and I may have to use an order for that because I only have another hour.

 

[tomorton]

She must roll over from here.

 

[Splitlink]

I am long overnight because I entered on an order I left before I went to work. Glad I was not around to see the spike shortly afterwards.
The index does look as if it might break down but have you seen the strong trendline running through the lows of 8th, 9th, 12th and 15th?

 

[tomorton]

Hi Split - I probably don't believe in trendlines any more, though trends are real and I can see daily Highs, Lows and Closes.

I also find it hard to consistently evidence as support / resistance - MAs: psychologically important numbers: round numbers: Fibonacci levels. I find gradients of MAs entirely misleading.

Then again, I am also completely baffled by the popularity of tennis.

The FTSE's hanging man is reinforced by the S&P doji, both on weakening volume. This doesn't look bullish at all.

 

[Mr. G]

The FTSE's hanging man is reinforced by the S&P doji, both on weakening volume. This doesn't look bullish at all.

How about a short under yesterday's low?

 

[tomorton]

I think a short below yesterday's low would be a classic entry level, but always nice to get confirmation - weak price action compared to open and yesterday's close, yesterday's high remains intact, weakening afternoon performance. Stop could be just above yesterday's high, just above 21/06 high for the most bullish: target levels have to be gap 7th-8th, at least 5062: if the gap fills, 4800?

 

[Mr. G]

I am long overnight because I entered on an order I left before I went to work. Glad I was not around to see the spike shortly afterwards.
The index does look as if it might break down but have you seen the strong trendline running through the lows of 8th, 9th, 12th and 15th?

Split - could you tweak your system so that the first close under the 12 bar average would take you out of a long? You could always get back in with a close above the 12 bar average assuming the 24 bar is still in an uptrend......

 

[Mr Flibble]

Had a pretty weird spike in the early hours of the morning. I tried to look and see what caused it but found nothing. That could have taken out a lot of peoples stops for sure. I am beginning to realise that its just how the market reacts to certain news is key. If the FTSE still goes down today on OKish unemployment figures released yersterday than you have to ask, what exactly would make it go up? I'll hold a short for a good few days and these spikes just make me very pleased that I don't use stops.

 

[Splitlink]

Hi Split - I probably don't believe in trendlines any more, though trends are real and I can see daily Highs, Lows and Closes.

I also find it hard to consistently evidence as support / resistance - MAs: psychologically important numbers: round numbers: Fibonacci levels. I find gradients of MAs entirely misleading.

Then again, I am also completely baffled by the popularity of tennis.

The FTSE's hanging man is reinforced by the S&P doji, both on weakening volume. This doesn't look bullish at all.

I agree with you about all indicators. My basic reason for trendlines is as a reference. Be on the right side and there is no problem. Cross a trendline and that requires watching.

So far as averages are concerned, they avoid me getting into a trade too quickly. On a higher TF they seem to work and, also, act as entry signals when the smaller ones are pierced. My thinking is that I need a reference point to enter and this provides it for me but my logic, over the years, is that a simple method is exactly the same as a complicated one.

With this current trade I am currently long and 6 points down. My trend is still up, though.

 

[Splitlink]

Split - could you tweak your system so that the first close under the 12 bar average would take you out of a long? You could always get back in with a close above the 12 bar average assuming the 24 bar is still in an uptrend......

You have to be careful of whipsaws with averages, they can be quite costly. Currently, I am using the main average for trend and this is confirmed by having the two smaller averages above (in a long). I enter, and add, when those averages are pierced.

What I like about averages is that they help you to keep your feet on the ground and reduce the number of trades.

I want to emphasise that I am working with a new broom. I have been an interday trader and am trying longer term trades. I may not like it.

 

[barjon]

I protected my ftse long this morning when it was 5230 with a half-position dow short at 10340.

May not have needed the insurance but, as I write, ftse is at 5230 again and I could buy back the dow short at 10341. So virtually flat despite the dow spread. I'll not be covering dow until ftse re-asserts itself which may cost me a little but worth it for the insurance.

jon

 

[Mr Flibble]

I protected my ftse long this morning when it was 5230 with a half-position dow short at 10340.

May not have needed the insurance but, as I write, ftse is at 5230 again and I could buy back the dow short at 10341. So virtually flat despite the dow spread. I'll not be covering dow until ftse re-asserts itself which may cost me a little but worth it for the insurance.

jon

I like the idea of that hedge you may end up keeping that for a while its probably a smart move. I'm sure we'll have plenty of ups and downs before the market agrees with me The issue for me is always to try to have my money on the table before the others by the time most wait for a confirmation the train has already left the station. I don't mind being wrong 3 times as much but I aim to let the winners run and run when I see fit. I keep biting away and for me I will only be looking for shorts.

 

[Splitlink]

I can see where you potential shorters are looking. I am going to put a stop at 5245. That will give me 15 points on my trade, if it fails. I will not be shorting today, though, unless it is tonight.

Good trading.

 

[ibetyou]

Hi Guys.Afternoon off so thought i would write something i read today.

You might be intrested,probably already seen it.

There has been a dramatic change this week,the bulls have dropped below the level of the bears.
This is apparently the first time there was more bears than bulls since April 3rd 2009.
What is also intresting here is that the entire shift went in to the correction camp and none in to the bearish camp,as the bears are unchanged from a week ago.
The bulls are at there lowest levels since March 27' 2009.

With the bulls having closed there positons already and not going short it only leaves profit taking to
pull the market back.

So what does this tell us.
There waiting to go long after it falls back.
There waiting to go short if it falls further than 5000
Help me out guys i'm thinking long but i'm having problems after missing 500 points this last couple of weeks i've lost all my confidence.
I'm trying to stand back and not have an opinion and let the market show me the way,
The trouble i have is which time frame to play and by watching them all they cloud my judgement,
as i had always day traded before and now trying to go longer term,but can't stop myself from looking at the day targets.

Any suggestions apart from not looking at the daily charts.
Or have i just stated the obvious.

 

[barjon]

I can see where you potential shorters are looking. I am going to put a stop at 5245. That will give me 15 points on my trade, if it fails. I will not be shorting today, though, unless it is tonight.

Good trading.

split

If you'd hedged with a DOW short at that point - just before 2pm our time? - you'd have been short DOW from around 10365. FTSE closed at 5211 (- 34 from your 5245) when DOW was 10282 (- 83 ).

So, let's say your were £10pp long FTSE then you'd hedge at £5pp DOW. Therefore, at FTSE close you'd be - £340 on your FTSE long position and + £415 on your DOW short. That "profit" is because FTSE was a little reluctant to follow the DOW down which you may think is a small sign that your ftse up-trend is still favourite (dow permitting).

Of course, FTSE may have traded weak after the DOW hedge in which case there would have been a "loss" but it's a course worth considering if you think the up-trend (in this case) is intact. Particularly since those nice Fins Gentlemen are offering 1 point spreads atm

good trading

jon

 

[Splitlink]

split

If you'd hedged with a DOW short at that point - just before 2pm our time? - you'd have been short DOW from around 10365. FTSE closed at 5211 (- 34 from your 5245) when DOW was 10282 (- 83 ).

So, let's say your were £10pp long FTSE and you'd hedge at £5pp DOW. Therefore, at FTSE close you'd be - £340 on your FTSE long position and + £415 on your DOW short. That "profit" is because FTSE was a little reluctant to follow the DOW down which you may think is a small sign that your ftse up-trend is still favourite (dow permitting).

Of course, FTSE may have traded weak after the DOW hedge in which case there would have been a "loss" but it's a course worth considering if you think the up-trend (in this case) is intact. Particularly since those nice Fins Gentlemen are offering 1 point spreads atm

good trading

jon

Thanks, Jon. Just got in and read your post quickly. It's not digested yet though, I'll need tomorrow morning for that! I'm out, anyway, but I've had a good run, all told.

 

[tomorton]

FTSE gave reasonable confirmation of downswing starting yesterday and I am short from mid-evening.