FTSE 100 October 2004

[bracke]

Interesting to read the last posts on the September thread.

Having been in similar position myself in the past ( but not currently ) I see how easy it is to form a frame of mind that the market will or is almost certain to trade in a particular way and to pursue that thought even when it is hurting

The above is not a criticism of any of the esteemed posters merely an observation from someone who is sitting on the fence and who knows from experience that it can be very costly to pursue a frame of mind when the evidence suggests that a rethink might be in order.

I do not know where this market is going and the bears may well be correct in that the fall is imminent but beware, the market may not agree with you.

Regards

bracke

ps I'll put the Bearskin back on the stove peterpr.

 

[alliance]

Hi bracke et al

Thought I would pop in and say hi and update u on my exploits! Started the training course, tho its pretty basic stuff to start off, however apparently it gets more into my "bah humbug" TA in later weeks. In the meantime, I have not traded since taking the FTSE100 off my xmas card list a few weeks ago and have instead turned my affections to foraying into forex.

I was persuaded to part with £30 for the 4xtrend course, and tho y'day was the 1st day I (paper) traded it, I must say that both the experience and the results were positive. It is the first "system" that I have ever purchased and it was well worth the £30 just to get me (for the 1st time ever) to look @ charts I must confess that for a TA-na-phobe like me, it was enlightning...even if I I was just following numbers. The fact that I closed both my trades @ the end of the day for a (virtual) profit of +156 was a bonus. However, one swallow does not a summer make, so planning to paper trade it for quite few weeks b4 risking any real pennies :cheesy:

I still subscribe to the thread, and enjoy reading all the posts. FWIW I would be looking to go short on the FTSE near 4650...but what do I know

Happy trading in October everyone!

 

[pb]

Just opened another short for FTSE March at 4660.

 

[FetteredChinos]

5 peak divergance on the 15 min chart.


this really is going to end in tears soon....


still short..


this must be a stop collecting exercise the MM's are doing...

FC

 

[pb]

Well, I have decided not to be swayed by these rallies and instead have faith in my own analysis and verdict on where the market is going. I have added more margin money at the slightest possibility of getting a position closed and opened a new short at every opportunity. I will see this through.

Good luck to all shorters, you know this rally cannot last. So just hang in there.

 

[FetteredChinos]

stopped out..

not good.

 

[RogerM]

pratbh - remember the old adage that markets can remain irrational longer than you can remain solvent? With benefit of hindsight the failure to follow thru from Monday's fall was a danger sign. The current range is clearly defined between 4288 and 4600, so a break above 4600 implies a move to 4900(ish) although not necessarily in a straight line - although that's what has happened twice with the current range (from March and Aug bottoms). Maybe with the US election only 4 weeks away, bearish is not the way to bet.

 

[sumathik]

I have been a lurker for a some time. very good posts by f.c/peter/ bajron/bracle and others.
sorry for not contributing.because have not much to say.
I had 4650-4670 as a shorting level for some time but because of the dow performance lately, have covinced myself that ftse would not pass the prevoius high of 4600 and started to scale into shorts from 4480 yes 4480.losing heaps and averaging out (poor money management).
add some more shorts @4650. if we pass 4670 then will take my deep cut .it will wipe out my 2 months hard work.

here is hoping to see ftse reverse from here.
good luck for all the shorties. well done all longs
sk

 

[peterpr]

Well today has been something of a watershed for me - hit the buffers twice in one day!!

That 4630ish level was pretty fundamental in EW terms. There will be a lot of analysts scurrying to re-label/count all over the place right now and for them it undoubtedly leaves the bulls a clear run to at least the 4680's.

The problem is that, so far EW counts on the SPX & DOW remain intact with a fair amount of upside possible before a fundamental re-think is forced. Looking at today's action it is clear that FTSE is continuing up from 4630 on the strength of the US, so I'm still not entirely convinced.

Quite happy to munch that bearskin now though because a close above 4630 looks pretty much inevitable

 

[RogerM]

Research into the VIX by Larry Connors shows that over the last 14 years the S&P500 has risen by 300% but none of this gain came during the time the VIX was >5% below its 10 day sma. VIX currently about 8% below 10 day sma, and on average, S&P 500 only rose 0.01% in following week, compared to average weekly gain over the entire period of 0.19% . In isolation that's not a trading strategy, but something to bear in mind. Also whilst the FTSE normally follows the US, there are times when it diverges significantly which seems to be happening at the moment.

 

[peterpr]

A quick search though YTD reveals that today (so far - ie 4463) is the largest open close and range and percentage FTSE increase for the entire year.

Now I wonder why on earth everyone is piling their money into equities today? The news flow certainly isn't contributing much in the way of positive bias - and take a look at gold - that's up another £2 an ounce or so.

Big Al G's (That's Greenspan not Ali!) 'excess of irrational exuberance' phrase springs forcefully to mind. Must remember to take a close look at volume after the close.

 

[RogerM]

A quick search though YTD reveals that today (so far - ie 4463) is the largest open close and range and percentage FTSE increase for the entire year.

Now I wonder why on earth everyone is piling their money into equities today? The news flow certainly isn't contributing much in the way of positive bias - and take a look at gold - that's up another £2 an ounce or so.

Big Al G's (That's Greenspan not Ali!) 'excess of irrational exuberance' phrase springs forcefully to mind. Must remember to take a close look at volume after the close.

Remember that AG's original "irrational exuberance" speech was made when the Dow powered thru 6000, and after that it almost doubled. I refer you to the "irrational" and "solvent" quote above!

 

[pb]

RogerM,
Sound advice and thanks for that. But as they recommend, I am playing only with money I can afford to lose. So I will hang in there.

 

[peterpr]

Remember that AG's original "irrational exuberance" speech was made when the Dow powered thru 6000, and after that it almost doubled. I refer you to the "irrational" and "solvent" quote above!

RogerM

I quoted him somewhat tongue in cheek. Not a big fan of Big Al. Have a pretty jaundiced view of how history is likely to judge him. Still, got to give the guy some credit - doing the same job for both Republicans and Democrats - Vicar of Brae springs to mind. No matter how the markets view his pronouncements short term, fact is he is just tooooo sanguine about the US deficits I'm not making any sort of trading point when I opine that the US economy is riding for a very nasty fall at some stage in the not-to-distant future. Have a look at the New Statesman this week: http://www.newstatesman.com/site.php3?newTemplate=NSArticle_NS&newDisplayURN=200410040024
I've seen lots like that from over the pond - hindsight will make it pretty damned ovious when it actually happens. In the meantime - well lets make hay eh?

Your reminder of the 'irrational' and solvent' maxime was timely and spot on.

I'm nursing a month-on month loss as a result of today but it's swings and roundabouts really - all good experience. A bit of sach-cloth and ashes good for the soul.

 

[pb]

I am still at work, can anyone tell me how the volume was today, compared to the 50-day volume average?

Thanks.

 

[barjon]

I am still at work, can anyone tell me how the volume was today, compared to the 50-day volume average?

Thanks.

pratbh

volume 1.67b 50 trading day average 1.5b

jon

 

[pb]

Thanks Jon

 

[peterpr]

I am still at work, can anyone tell me how the volume was today, compared to the 50-day volume average?

Thanks.

Volume respectable (1.669 b) but nothing to write home about. Certainly not a crescendo of volume. Yesterday's down day was much higher at 2.226b for example. Both days well below the average for the July decline as well.

Not sure what, if anything to read into that.

 

[pb]

This board has gone really quiet, so here is a little topic of debate:

Since Jan 04 FTSE has been going through these higher high, lower low sequences (while other indices are following traditional lower high, lower low patterns of a usual downtrend), which I call widening top formation.

First high 4513 on Jan 5; next low 4390 on Feb 3
Next high 4559 on Mar 4, next low 4309 on Mar 24
Next high 4574 on Apr 27, next low 4287 on Jul 26
Next high 4659 yesterday; next low ???????????

One slightly worrying thing for us bears is that all major indices rose quite a bit yesterday, although the downtrend lines are still intact. October will be very interesting indeed.

 

[bracke]

alliance

Nice to read from you again. Keep taking the TA and keep us posted on progress.
Wish you well with your foray into forex it will be interesting to read how you find it compares with trading the ftse.

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.

No matter how we apply logic and rationalise what the market should do, if the big players think otherwise what we think is irrelevant. If you go against the flow you take the risk of being swept away.

Getting rather lyrical so I will cease.

Regards

bracke

ps peterpr would you like your bearskin well done ?