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.