Last week the FTSE bounced around a narrow range of 6150-6250 until Friday, when it lurched upwards to 6350 and closed just above 6300. Wall St failed to respond in kind as oil and gold rallied. We thus need to see if 6300 will hold.
Resistances
6500
6350
Supports
6300
6280
6260
6240
6200
On the 1-hour chart the FTSE has touched the SAR on the upside, so is bullish. However, the MACD is still negative, and indeed in the first minutes the FTSE has dropped. The 30-mins chart still bearish. No trade for the moment.
Rising prices of crude oil and gold have a complex effect on the FTSE as it has important petrochemical and mining companies listed. It is also worth keeping an eye on currencies at the same time. Friday's commodities surge was quickly followed by a drop in the dollar, so that in Euro and Sterling terms the rise was limited.
I am always cautious of indicators on Monday mornings. On IG the charts run continuously and the obvious lack of action during the weekends means that the graphs have flattened and indicators can give false signals. This is not so big a problem during the rest of the week as the FTSE prices are adjusted for the Dow and then Asian markets whilst London is closed.
Sitting on my hands for the moment...
19 May 2008
Trading Day
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Still sitting this one out! I may even just walk away and come back when Wall St opens. Often the FTSE will do what it needs to do in the first 2 or 3 hours of trading then drift sideways waiting for New York to wake up.
ReplyDeleteOne contract to keep an eye on is the FTSE Tunnels. It is very rare that the FTSE does not move at least 40 pts at some time during the day. As it continues to do nothing the value of the 35pt and 40pt tunnels start to look attractive to go short.
TRADE!
ReplyDeleteFTSE to finish up > 50 pts
BUY @ 27.2
REASON: 30-mins chart shows SAR and MACD positive. 1-hour chart heading up but MACD still negative due to weekend drag. The UP>50 contract has more mileage left in it and a lower price. If the FTSE rises just 20 pts to 6350 then this will also rise to about 50 pts.
At this point, with just one hour to go, and the FTSE just 7pts shy of +50, it is worth opening up the chart of our contract. With hindsight, perhaps it wasn't the wisest choice - the UP>30 is now already over 30pts in profit. Anyway, things get volatile here, and am loath to take a loss so near the close. Note that the binary bet contracts stop being traded 1 minute before market close at 4.30 pm, but they settle at the official close at 4.35pm BST.
ReplyDeleteTRADE!
ReplyDeleteCLOSED @ 52.3
PROFIT = 52.3 - 27.2 = 25.1 pts
a braver soul may hang on, but the contract will either end at 100 or zero. I'll take the 25pts profit. The contract chart is not looking good. The actual 30-mins FTSE chart is still bullish but, as I said, worth keeping an eye on the clock too.
Well, the braver soul would have got the cream this evening. The contract ended at 100, with a potential profit of nearly 73 pts. Never mind, bottled it too early. One of those rare days when the FTSE was itching to rise, but being held back by a sluggish early Dow. In the end, with gold and oil losing ground, the dollar rising and the Dow finally waking up, the FTSE made an end of day further rally.
ReplyDeleteRight trade, right opening, wrong close!
Sometimes, a good day just has to be good enough.