FTSE must hit 7000

We are certainly living in uncertain times. With the increasing worries over the Europe’s future relationship with power supplier  Russia it seems once again investors are looking for a safe place to put their wealth.  The UK seems, or more specifically London seems to be the considered a relatively safe bet. With the banks recapitalised and the majority of FTSE 100 companies holding health balance sheets it seems rather than ‘rushing’ back in to the traditional safe havens like gold, the indices in general are where people see value.

 

I maintain that the DAX has tipped the markets hat here having reached 10,000. I don’t feel the outlook for the EU or Germany is particularly strong in the mid term so I can see the FTSE and the S&P easily reaching the psychological highs of 7000 and 2000 respectively.

 

For the FTSE I predicted a daily dip buying strategy that has worked on the lows very well over the last few months. 6699.80 has proven to be a key levels of strength in the FTSE. The next target is 6819.30 and once we test 6867.80 then 7000 will surely be tested and broken. If you see any daily candle with a large lower wick, the chances are that the next open is positive. It is a reality easy technical

 

Once we hit new highs there will of course be a battle to see how far the FTSE can rise. I don’t foresee a correction until next year. I when I refer to a correction I mean where the FTSE and correlating indices lose 7-9% of their value in a relatively short space of time.

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Bo Yoder S&P update

The S&P 500 (ETF Proxy – AMEX:SPY) continues to drift higher as it nears the “round number” of $200. I really don’t have a clear forecast at this time, but this type of upward drift leaves the market vulnerable to any shocks which could break this up-channel and start a mad rush to the exits.

 

I am VERY worried about the low levels of liquidity that I see intraday and urge caution if you are trading on the long side this week.  The odds are high for some fireworks to the downside, even though there is no actionable data to trigger a short for me at this time.

 

SPY 7-25

 

 

The ETF proxy for gold (AMEX:GLD) has been pushing down to the support level that I think will force the bulls/bears hands next week.

 

I would expect to see a tug of war near the $123 level, then the beginning of a new bullish wave OR the beginnings of an attack on the lows and a breakdown.  The odds are better at this time for the breakdown scenario to unfold, so I will be watching how the market reacts with this in mind.

GLD 7-25

 

The waiting in TXN is over!  The resistance I forecasted was indeed strong enough to turn price lower, and this downward move is showing good signs of power confirmation to the downside.

 

If the broad market indexes turn lower into a long overdue correction, TXN should drop nicely down with relative weakness to my profit objective (blue zone).

TXN 7-25

 

Bo Yoder

3D Apex Trading

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The FTSE 100 re-assumed its climb above the 6,800 points but can it hold on these levels?

The FTSE 100 re-assumed its climb above the 6,800 points but can it hold on these levels?

The FTSE 100 was all about gains last week as it moved higher during almost all of the sessions. The London index has been showing signs of its bullish intentions from the previous week but the plane crash in Ukraine and the tensions there turned the tables. However, last week the FTSE re-assumed its bullish trend and managed to climb back above the 6,800 points.

The release of the minutes from the Bank of England meeting on monetary policy revealed that there is no urgency to raise interest rates within 2014 as the slack in the employment sector and the wages’ growth is still considerable. This translates to the current accommodative policy remaining intact for the foreseeable future and the FTSE benefited from this development. Furthermore, the PMI reports from the Euro-area shows encouraging signs of progress and that helped the London benchmark index as well.

For this week the important question is whether the uptrend will continue and make its way towards the 6,850 points and above. From a technical standpoint, the momentum behind the uptrend seems to be diminishing and there are signs of exhaustion. Does this mean that the FTSE 100 will reverse lower?

Not necessarily, there is a number of scheduled events that are very important and will definitely affect the investment sentiment over the next 5 days. This week we have the Fed meeting on the tapering agenda on Wednesday, the Non-Farm Payrolls employment report on Friday and several other events that will dictate the tempo of trading.

So even though the technical indications suggest a slowdown and possibly a reversal I would be very careful and keep an eye on the expected reports. The pivot point for me to the downside lies at the 6,750 points and to the upside the 6,880 points is the main resistance and we’re certainly in for a very interesting and probably volatile week.

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alpesh

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Weekly Markets Overview

US Markets are still in a clearly defined uptrend despite increased geopolitical uncertainty and low trading volumes. The current state of VIX, Volatility Index, is indicative of very complacent market conditions. The end of next week is the beginning of August, which is seasonally a very thinly traded month anyway due to the holiday season. On Friday, US indices pulled back a little but the overall trend is still intact unless the current direction continues throughout the next week trading. European Markets are showing divergence from the US with FTSE and DAX creating a sequence of lower lows and lower highs.

Dow Jones Daily timeframe price action is creating a rising wedge pattern. Friday’s price action is currently challenging psychologically important support levels which were seen as good buying opportunities in the past. Current support on the downside is at 16915. The loss of that level and a confirmed close below could potentially target further downside support at 16847 which is also 50 Day SMA level, followed by 16717-16735 levels. Alternatively if the Friday low stays intact and the price moves swiftly higher, the upside resistance is located at 17000 followed by 17068 and 17100.

Pivot points for Monday 28th July trading are : Pivot – 16986, Resistance 1-17058, Resistance 2- 17152, Support 1-16890, Support 2-16819.

S&P Daily timeframe price action resembles the Dow Jones as well. Current support on the downside is at 1974 which is Friday’s intraday low. The loss of that level and a confirmed close below could potentially target further downside support at 1967 followed by 1953 -1955 levels. Alternatively if the current levels hold and the price moves swiftly higher the upside resistance is at 1985 followed by 1991.

Pivot points for Monday 28th July are : Pivot – 1979.37, Resistance 1 – 1983.57, Resistance 2 – 1989.33. Support 1 – 1973.61 Support 2 – 1968.87.

FTSE Daily timeframe upside resistance is at 6840 followed by 6875. The initial downside support is at 6769. The loss of that level and a confirmed close below that level could potentially target further downside support at the psychologically important 6705 which is the 200 Day SMA level followed by 6643 which is the 10th July low. These support levels are also 50% and 61.8% Fib retracements from the high at 6895 level.

Dax Daily timeframe price is currently trading below the very important 9794-9800 (Neckline) resistance level. Only a breakthrough and a daily close above that level could potentially target additional upside resistance at 9870 followed by 9965 and 10047 level. Alternatively if the current price action falls further next week, the downside support is located at 9597 followed by 9467 levels.

Gold Daily timeframe current upside resistance is at 1316.25. Only a confirmed breakout higher and a daily close above that level could potentially target further upside resistance at 1324.75 followed by 1331.40 and 1346.80. Alternatively current support on the downside is at 1293.97 followed by 1286.95 and 1280.76

Silver Weekly timeframe price action appears to be a bullish breakout after a long term sideways consolidation. The important downside support is at 20.11 level. The loss of that level and a confirmed close below could potentially negate the current breakout. If that occurs than the further downside support could be located at the long term low at 18.72 and 18.61 levels. Alternatively if the current levels hold than the initial upside resistance could be found at 21.63 followed by 22.18 and 23.00 levels.

WTI Crude daily timeframe downside support is at 101.00 level. The loss of that level and a daily close below could potentially target further downside support at 99.88 followed by 99.00 levels. The important upside resistance is at 102.85 and 103.75-103.90 levels. Only a confirmed breakout and a daily close above 103.90 could potentially target further upside resistance at 104.50 followed by 105.22.

USD Index Daily timeframe is currently challenging a very important upside resistance at 81.00 level. Only a breakout and a daily close above that level could potentially target further upside resistance at 81.50 level. The initial downside support is at 80.60 followed by 80.39 & 80.26 levels. The short term bullish outcome for the USD Index could be indicative of a short term bearishness in EURUSD and GBPUSD and potentially bullish for USDCHF and USDJPY. The opposite is also true, the short term pullback in USD index at the current levels could potentially indicate short term bullish EURUSD and GBPUSD and bearish USDCHF and USDJPY reaction.

EURUSD Weekly is currently retesting a very important downside support level. The loss and the close below current 1.3425 level could potentially target further downside support at 1.3295 followed by 1.3246 level which is the 38.2% fib retracement from the current high at 1.3993 level. Alternatively if the current levels hold the initial upside resistance for any oversold bounce backs is at 1.3510 followed by 1.3600-1.3620 levels.

 

Phillip is a professional trader, managing a personal investment and trading fund. He has proprietary trading experience in energy commodities futures trading including procurement of commodities for the physical delivery on behalf of a corporate client base.

Like many investors, Phillip began Trading and Investing with a long only approach on unleveraged equities since 1996. In 2003 he started equity margin trading and in 2004 he bolstered his portfolio by adding versatile CFDs and Spread Betting. Phillip trades a wide range of asset classes and instruments but specializes in equity index futures ( ES_F, S&P 500 ) and energy commodities futures trading. Phillips trading style is structured, objective and business like with aggressive risk management structure. A sharp minded individual, Phillip is well versed in the latest thinking regarding the Psychology, Financial Management, Fundamental and Technical Analysis aspects of financial trading.

Founder  www.TraderCast.com

Email: pkonchar@tradercast.com

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My Ideal Setup

david paul 150 wideAs I have discussed many times the VectorVest edge is based on combining three aspects of the market in a very unique way. These are

1. The Fundamental position of a share as ranked by the shares value, earning potential over the next 1-3 years (RV) and the shares safety of earnings flow (RS).

2. The technical position of the share (RT).

3. The technical position of the overall market as defined by the MTI and the Color guard.

The last bit is now being done for us in the UK. Every week a very experienced analyst rates the technical position of the overall market after a lot of research and thinking. It’s available via text and video on the front page of VectorVest. At present the analysis doesn’t make great reading as all apart from the shortest measure of the trend are down. In VectorVest terminology the LSE is in a UP/Dn trend within a Confirmed Down call. To summarize the strategy “VectorVest advocates caution in buying shares at this time”.

I like the fundamentals of many of the top shares in the Stock Viewer on VectorVest but the Interior Service Group (ISG) looks very attractive. It’s on the fringes of the construction industry which seems to take so much of my focus at present. The share is much undervalued and shows excellent earnings potential (RV) and safety (RS). The RV is at a compelling 1.58. The fundamentals certainly get a tick.

The technical position of ISG really appeals to me. If you pull up a chart over the last 18 months the share has doubled in the last half of last year and since that has traded sideways in a text book “flag” pattern. This is a bullish formation which I believe is nearly complete. The pattern is more accurately named by an analyst named Ralph Elliott as a “flat” and within the flat there should be 5 sub waves. It takes a few doubles aboard to see the sub waves but that’s why I reckon the formation is nearing completion.

I particularly like the fact that the share broke the 285 resistance and then came back and “kissed” the level twice.The double bottom charted midway along a move is a strong reason to bet that the move is about to restart after a sleep.

I think it’s quite a simple matter to draw a trend line defining the top of the flag pattern and on a break above this level a move SHOULD occur. I will let the share close up around the 315 level before getting interested.
Let’s review the facts.

1. The Fundamentals look good.

2. If the share breaks as above the technical position also look good.

3. The technical position of the LSE looks poor and any trade (to be a high probability trade) should be taken when at least the longer term trend has turned up and the more conservative will wait for a confirmed call UP.

I show the above as a setup that has worked for me, in both the UK and SA and is not a trading recommendation. It is meant for education purposes only.

David Paul
July 20th 2014

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Bo Yoder on Market Distortions

Bo Yoder 75 wideI write and talk about the market distortions that the “open market operations” of the Federal Reserve Bank cause, and nowhere is there a clearer example of this than on the daily chart of The S&P 500 (ETF Proxy – AMEX:SPY).  This market was exhausted and ready for a correction the last time I wrote to you, and you can see from the chart below, that my forecast was dead on about the upcoming price cycle, but dead wrong about the depth of the correction.

 

The constant liquidity injections from the central banks distort “normal” supply and demand and create a “crowding out” effect that we can see in these charts which are eerily free from the normal corrections that allow a market to breath and build a strong foundation upon which to build a trend.

SPY 7-17

 

 

 

You can see clearly why I had my “take profits” zone in the $129 area for Gold…After testing that area, we have come off rather violently, and this sets up an important decision point for this market.

 

My indicators show that we will likely pull back to support near $123, than I will be watching intently for the next net of supply/demand measurements as I believe we will have two potential outcomes…First, we make a higher low which confirms this as “the bottom” in gold and we begin a new sustained and significant bull phase, OR we drop through support like a stone and break down perhaps to challenge the $100 level.  Not enough data to make a forecast at this point, but I suspect next week will offer an entry in this market.

 

GLD 7-17

 

The TXN trade continues to struggle here at resistance.  There is no new data to suggest my original forecast is incorrect, so it’s just a waiting game for me now…TXN 7-17

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Lower expectations in the summer

Kevin Burton 75These hot summer days encourage people from all professions to slow down their activity and enjoy more time with family, friends and wine! Never is this seen more in the markets where traders traditionally are less active in the height of the summer which normally gives way to lower volatility.

Obviously we already have very low volatility in the FX markets so traders need to do one thing – lower their expectations. There’s no point imposing our will onto a market that simply isn’t willing to give us what we want. This can lead to frustration and frustration can lead to losses. There’s still plenty of opportunities but keep an open mind and you will be better suited to anything the market does or doesn’t throw at you!

I’ve been watching the EUR/CAD for a while now and since falling over 1000 pips since March, it has found some support at its 50 week moving average. Since early July it has not gone any lower.

So is it about to breakdown on Euro weakness or are we seeing a near term base being built? I’m in favour of the latter due to a number of factors but one being the MACD divergences we have witnessed on the daily chart. I would like to see this pair push higher in the near future and see the potential for some Fibonacci retracement levels to be targeted. If it breaks down to take out the lows of the 4th then I will be wrong…

Charlie Burton

EzeeTrader

simoncad

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The FTSE is stopped mid-way on its move higher, is there enough drive to restart the climb?

A series of volatile sessions have driven the FTSE 100 above the 6,700 points during the last week but the index stalled ahead of the 6,800 points barrier. It did seem that the momentum was to the upside but a number of developments turned the tables mid-way.

The event that was expected to attract the most attention was the release of the labour market data last Wednesday and the way they printed pretty much dictated the pace for the rest of the week. The employment data revealed a satisfactory decline in the unemployment rate but the thing that disappointed investors was the slack of wages’ growth hence the FTSE didn’t pick up any substantial momentum towards higher levels.

The unexpected incident with the crash of the Malaysian Airlines plane in Ukraine pretty much capped any expectations for a move higher. The fears for a military intervention in Ukraine from Russia and the renewed tensions between the two countries drove investors away from the European stock markets and the FTSE ended the way slightly above the 6,750 points.

Now for the next week, I am cautiously optimistic over the FTSE’s outlook. I am looking towards a new swing higher and my first area of interest lies at the 6,800 points. If the support is enough to drive the London index above this barrier then the 6,850 points area will come into focus.

The main event that could provide new data to change the FTSE’s outlook is expected on Wednesday when the Bank of England will release the minutes from their last monetary policy meeting. If policymakers remain optimistic over the domestic economy’s progress then it should be smooth sailing for the FTSE for the rest of the week.

To receive my free daily newsletter or to subscribe to my premium NewsletterPro service please visit www.investingbetter.com .

alpesh

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Safe as Houses

david paul 150 wideThe valuation of a company is no simple matter. It involves the prediction of future profits and then discounting those cash flows into present day money.

The novelist Mark Twain said that the “future is a very slippery commodity”.
VectorVest has algorithm that has been 26 years in the making which calculates the value of each share on the LSE each evening. At a glance the trader can see whether the share is trading above or below this level. As a default I prefer undervalued shares as there is just so much less risk there. Warren Buffett says that “you don’t know who has been swimming naked till the tide goes out”.

At the seminars I regale the crowd with stories of my parents who use to coach that the “only way to make money is to find the value of something and then pay a lot less for it”. My way of using VectorVest is to find shares that are undervalued and that are growing their earnings aggressively and safely, with solid balance sheets.

The same thinking is going on in the soccer Premiership this weekend. The managers are filling their teams with the best possible players that they can afford. Gary Lineker said that last season’s event was won before the start of play as City has simply the best combination of players.

Use this as a metaphor for your portfolio. It all starts with the best possible shares and I quote the founder of VectorVest in this. You don’t want to fill your side with defenders or strikers but spread yourself across the market as I have spoken about here many times.

“Good portfolio management starts with buying the rights stocks” Dr B A DiLiddo

As I said above measuring value is quite an exercise and over the months I have spent a lot of time comparing the VectorVest valuations with those of fund managers that I have worked with over the years. Invariably there is no more than a 10% difference between the VectorVest number and the funds estimate.

Over the last few days HSBC have made public their valuations of building stocks in the press. I note for example that the VectorVest valuation of Bovis Homes is 1238p while HSBC reckon its worth 1250p. The share is currently trading at 770p and this there is a 62% gap.

The theme is held across the larger building stocks with the VectorVest valuation and the HSBC valuation showing that there is a large upside potential possible across the sector.

The VectorVest value for Bellway is 2365p and the HSBC is 2275p while the share is trading at 1520p. That’s a 50% upside move.

I still think that the move down in the builders during the first half has given us a great opportunity in the months ahead. The seasonality I mentioned last week should kick in from September.

Remember you are choosing a Premiership side and please take it as seriously as Sir Alex would have done. I can’t decide on your investment recipe but I personally favor undervalued shares with high earnings potential with great balance sheets. That’s where it all starts.
David Paul
July 2014

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Bo Yoder trading update

Bo Yoder 75 wideThe S&P 500 (ETF Proxy – AMEX:SPY) has continued its “central bank boogaloo” as price rises slowly without wiggles or corrections.  I would expect it to begin correcting next week and to follow the pathway I have drawn on the chart.  However, the odds for this prediction are measuring very low, so it’s not a trade I would take on a daily chart level…

SPY 7-10

 

 

 

 

Gold did rally up into the target zone as forecast, but without any real dips or wiggles to provide entry.  This has been a purely “momo” week as the central bank news has continued

to “melt up” prices.

GLD 7-10

 

 

I was hopeful that the stock of Abbot Labs (NYSE:ABT) would survive as it had been showing relative weakness for some time, but it finally stopped out as the highs of the red zone were violated.

ABT 7-10

 

I am watching the stock of TXN rally up to retest same highs that were set after a violent price spike.  I would expect price to run a little higher to test the red zone. Then turn back

down to test the blue zone as my power indications are extremely bearish for the stock.

When there is a news event like the central bank buying that we have seen recently, it can violate the “rhythm” of normal support and resistance.

It takes a price cycle or two to clear itself before the odds shift back up into acceptable (70%-80%) levels…I see a lot of low odds measurements all over, so TXN is a shining gem this week in a murky cloud of conflicted charts!

 

TXN 7-10

 

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