Mark Austin FTSE Trading Update - 31 Jan 2011

Good morning

 

The FTSE gave a negative signal on Friday, with price action being accepted under 5956. 

 

In terms of Elliott wave theory the target for this decline is 5800. The pattern at this stage is taking form as an ABC. See attached chart. At this stage I would expect wave 4 and 5 of C to complete with a rally towards 5900 first and then a final decline to 5800. There is major support at 5800

 

Once this decline had completed near 5800 the price action from here will determine whether we have seen an important peak at 6090 and whether there is further downside to come.  It is normal for healthy corrections to test the MA 200.

 

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Mark Austin FTSE Trading Update - 28 Jan 2011

Good morning

 

After promising price action at yesterday's market open the FTSE failed to deliver any meaningful moves. The DOW is also resting in tight range around 12,000 and has done so for most of this week.  The USA has GDP data out today at 1.30pm which many investors will be focusing on. Traders are most likely waiting for this news to be released before taking fresh trading positions.

 

Yesterday I mentioned the importance of 5976 and we failed to close above this level yet again after a failed retest at 6000. Again this is not positive price action.

Mark Austin FTSE Trading Update - 27 Jan 2011

Good morning

We have as slightly muddled picture on the FTSE today.  We had a clear sell signal earlier this week which we traded and since then the FTSE has moved up but not in a very convincing manner.  Why do I say that?

Last week the FTSE gapped down and left a  closing gap at 5976 on the back of strong volume. This was one of many sell signals.  As long as the FTSE stayed below this figure we had a clear path to 5820.   A move above this level weakened my analysis which is why I didn't trade yesterday.

Mark Austin FTSE Trading Update - 26 Jan 2011

Good morning

We remain short on our spread bet yesterday which is now risk free and with a stop at 5955.

The market showed great promise yesterday with the initial decline but 5900 is holding up for now which is not ideal and is why I took half profits at 5906.  Major resistance lies at 5955. This was previous support and led to a decline below 5900. The greatest concern is we are clipped out and the market then falls back again.

Mark Austin FTSE Trading Update - 25 Jan 2011

So far this pattern is right on cue for a fall and the gap which I made reference to yesterday at 5974 has just been filled. At this stage if the pattern is correct I expect a move lower.

Its possible we could get a quick price spike at the open to scare off shorters but I would not expect us to have acceptance over 6000 and this should be a reference point for stops on spread bets. Acceptance would be three thirty minute candle bars above 6000. If we see this my analysis is compromised.

Mark Austin FTSE Trading Update - 24 Jan 2011

Good morning

Last week the FTSE turned down and I am expecting weaker prices this week.

The selling came in after a double top near to 6100 and a strong gap down on the back of high volume (weak volume moves are associated with false moves).  Previous support has been broken at 5946 and this also coincides with the 38.20% Fibonacci retracement level. On Friday prices managed to climb to 5940 on the back of short covering but this was short lived.  This will act as resistance going forward.

Mark Austin FTSE Trading Update - 21 Jan 2011

Good morning

The anticipated FTSE correction is well under way and as mentioned previously I have targeted this to end between 5820-30.  As long as prices do not close below 5820 we are set to make fresh highs in the next few months. However a strong downward break of 5820 would indicate a deeper correction towards 5600 and possibly confirm a top was formed at 6090.(double top).

It is expiry today (10-10.15am) so I would expect volatility to increase after this event and into next week. This will increase trading opportunities especially on the magnet side.

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Mark Austin FTSE Trading Update - 20th Jan 2011

 Good morning

Yesterday the price action for the FTSE starting to come into line with my elliott wave analysis. As you know I am bearish at this point and even if we make one more high above 6090 that will be short lived. We have been patient up until now but I believe some great short opportunities will soon be available to us.

Evidence that price action is forming a top:

We closed under 6000 yet again - A key psychological level
We failed to make a new high yesterday - failed retest
We had an negative outside day - This is when the FTSE makes a new high when compared to the previous day but then closes lower that the previous day
We closed under the MA 20

This price action cannot be ignored and signals the FTSE will reverse and turn down very shorty, if not now. The FTSE is renowned for strugging off such signals in the very short term but any upside is now limited. The strategy from now on is therefore to sell any strength. Up until now I had some compelling elliott wave analysis but the price action was still very bullish. I have therefore been sidelined. This is now changing.

We also have expiry on Friday. For those who are not aware, the markets often produce large large and significant moves after this event.

Mark Austin FTSE Trading Update - 19 Jan 2011

Good morning

 

I expect 6056 to be reached at some point today. This was the closing level for the FTSE last night and I shall use this for a target.

 

We have resistance at 6100 which the FTSE will struggle to get through

Mark Austin FTSE Trading Update - 18th Jan 2011

Good morning

Please find attached a video clip from the webinar held on Saturday running through my analysis on the FTSE. 

The FTSE continues to trade in a sideways manner with a break out due. In fact the price action can be seen as a flat triangle since the beginning of this trading year so the break out could come in today or tomorrow.  As mentioned in the video if we have one more push to the upside an important peak could come in at 6157.

Mark Austin FTSE Trading Update - 17th Jan 2011

Good morning

 

With the US markets shut today we could well have a range trading session this afternoon. For those who actively day trade this may present a good scalping opportunity (tight stops and numerous short term trades opened and closed).

 

We have a magnet target at 6028 however given the US holiday I may wait to see the opening break on the FTSE and a clear range established.

Mark Austin FTSE Trading Update - 12th Jan 2011

Good morning

 

The FTSE remains in a tight range and the action over the last few days is not the clearest.  Usually when price action is unclear it is corrective and for now we have to assume a short term top was formed at 6090. 

 

If we do breach 6090 then we will reach 6157-6200 quite quickly. This is my bullish alternate scenario.  Under this scenario this target would represent a longer term short opportunity. 

 

What ever the case there is not much room for the bulls left and a decline to at least 5820 is due.

Mark Austin FTSE Trading Update - 10th Jan 2011

Good morning

The FTSE continues to trade between 5945 - 6090 with a break out due shortly. If we see price action above 6000 again with an end of day close its still possible we could see the top of this rising channel hit 6200 but the sluggish action around 6000 and an incomplete wave structure for the advance to 6090 supports the view that a decline to 5820 has already begun. 

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Mark Austin FTSE Trading Update - 6th Jan 2011

Good morning

The FTSE trading closed over 6000 yesterday and closed at the high of the day. A positive move and doesn't give us a short signal just yet but I believe we are very close to a top.

If we look at the bullish scenario then the price channel is capped at 6200 (see attached) and we also have resistance at 6080. If we turn to Elliott Wave Theory then we already have five waves up pointing to a move down.  Elliott wave theory does state that wave 1 can be the same length of wave 5. Wave 1 started in July 2010 from 4788 and completed at 5429. That's 641 points.  Wave 5 started at 5518 on the 1st Dec 2010.  Add 641 onto this figure and you get 6159.  Add to the equation over bought conditions and we can see we are near a critical turning point and we could turn down immediately or at least very soon. I am not calling a complete top on this market but a move to at least 5800 is due. After that I will access whether we have one more move higher before a long term decline starts.

Mark Austin FTSE Service Update - 4th Jan 2011

Its clear from here that a major wave pattern is near completion and the FTSE is preparing for a major decline.  This also ties in with high bullish sentiment which often reaches an extreme near tops.  I'm sure you have all heard the saying..........when your local dentist starts recommending shares to buy its time to exit! I am looking at the FTSE topping over the next few months and I will be going into this in depth at the forthcoming webinar due to be held on the 15th January.  More on this shortly.

One final point  - This is the first trading day of a new year and month and these tend to be bullish with funds investing.