Weather outlook for the FTSE

Reading price charts which may give you direction in the market using established TA methodology
oldcharlie
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Re: Weather outlook for the FTSE

Postby oldcharlie » December 28th, 2016, 8:12 pm

http://stockcharts.com/freecharts/pnf.p ... 0!!2!20%5D

FTSE closed above the all time highest close but has not exceeded the highest high achieved on 27/04/2015 at 7122.74. Not yet broken out on the P & F box 60 size chart.

OC

oldcharlie
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Re: Weather outlook for the FTSE

Postby oldcharlie » December 30th, 2016, 8:11 pm

The break above the previous highest high has arrived and there is another box on the P & F 60 box size chart. If you click on the link given in the post above to Stockcharts you can see this break out.

Unfortunately, this has come on the third day above RSI level 70 and looking at previous movements on the RSI, a pull back down comes after 1 or 2 days. Only four times in the last 20 has the Index stayed above 70 for more than 3 days. So very likely there will still be a bit of a fight to establish the break.

Medium term, given that Markets are taking a very positive view of stock markets where currencies are weakening (eg yen and euro) because this improves their terms of trade, I would expect the trend to continue to run up in FTSE.

Looking good?

OC

FredBloggs
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Re: Weather outlook for the FTSE

Postby FredBloggs » December 30th, 2016, 10:47 pm

I don't really understand the details, but I get the jist of what you're saying. It's fascinating, but can you shed some light on the following please? The press are saying that the long term average P/E for the FTSE index is around 16 but at the moment the P/E is around 30. So, very high? But the FTSE is no higher now than back in 1999. Yet, surely, over the last 17 years company efficiency and profitability has improved? So, why on earth are the papers saying that the P/E in 2016/7 makes the FTSE expensive? What was the P/E in 1999 when the FTSE was above 7000?

Thanks.

Fred.

oldcharlie
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Re: Weather outlook for the FTSE

Postby oldcharlie » December 31st, 2016, 1:52 am

Fred this is really not a question that a TA can answer as it is basically about fundamental analysis. P/E is a value derived from historic company accounts. TA studies price over time and some other matters derived from them such as momentum and other statistical series.

http://www.telegraph.co.uk/finance/pers ... raphs.html

This article has charts of historic P/E and the CAPE P/E. It says that the current P/E of the FTSE100 as a bit above the average of 16 and the CAPE P/E (a moving average of the last 10 years to iron out cyclical factors) is well below average.

I did read a very interesting article about this on the IG board but it is not available now. I think it said that the high number of commodity and oil stocks in the 100 has depressed earnings and made the Market expensive but that this is changing and next year earnings in these sectors will improve and this will make the market cheaper.

OC

oldcharlie
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Re: Weather outlook for the FTSE

Postby oldcharlie » December 31st, 2016, 2:02 am

http://www.telegraph.co.uk/investing/sh ... vervalued/

There is some discussion of this in "Trading my Way to a Million."

However, I think this is closed as off topic!

OC

FredBloggs
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Re: Weather outlook for the FTSE

Postby FredBloggs » December 31st, 2016, 9:24 am

Thanks for taking the time to answer. I subscribe to the Telegraph and it's largely their articles prompting my question.

DiamondEcho
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Re: Weather outlook for the FTSE

Postby DiamondEcho » January 1st, 2017, 5:08 pm

Thanks OC, nice chart you created there.

Where do you source authoritative intra-day and closing high levels? I find I have to make notes of such levels on the day they occur, as I've found nowhere that accurately records them. And causing further confusion they can be mis-reported later by the media it seems. In contrast you'll find such records for the US indices on Wikipedia.

Was Friday 30-Dec both a record intra-day and cob at 7142.83?

oldcharlie
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Re: Weather outlook for the FTSE

Postby oldcharlie » January 4th, 2017, 1:03 am

Weather Warning!

RSI now 4 days overbought and the weekly is showing bearish divergence!

So short term I expect a few down days. Maybe a pull back to support on the breakout level (old highest close or 7000?)

OC

oldcharlie
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Re: Weather outlook for the FTSE

Postby oldcharlie » January 10th, 2017, 12:10 am

FTSE is approaching the 7300 level which was my target to confirm the breakout. It seems that the fall in the £ is pushing the Market up!

OC

DiamondEcho
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Re: Weather outlook for the FTSE

Postby DiamondEcho » January 10th, 2017, 8:28 am

Yep, seems so.
FXEmpire's daily has [precis version]> Could reach towards 7500. Current floor at 7125. Bit over-extended at the moment. Pullback needed [in order to then retrace, and then go higher]

oldcharlie
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Re: Weather outlook for the FTSE

Postby oldcharlie » January 11th, 2017, 1:32 am

The Index is overbought with the RSI at 81 and over 70 for 9 days. This the longest run and highest level for a long time, in fact back to May 2013 when the Index dropped 800 points approx with little warning. Then it is back to the 1987 bull market for runs over 70 and levels over 81. 81 has only been exceeded about a dozen times since 1984 when the Index was formed. This run is probably unique in terms of the strength and consistency of the daily candles.

My first target is 7345 the minimum target set by the inverse H & S base formation. Bad weather and disruption to rail services may eventually depress the City!

OC

DiamondEcho
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Re: Weather outlook for the FTSE

Postby DiamondEcho » January 11th, 2017, 8:16 pm

10th consecutive record high, and yep, probably due a breather

DiamondEcho
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Re: Weather outlook for the FTSE

Postby DiamondEcho » January 12th, 2017, 6:59 am

FXEmpire:
'Very, veeery, bullish. Continues to be a buy only situation. Pullbacks needed to get involved as it is overbought. However the selling of this market is all but impossible, even though I expect a pullback. I look at 7125 as the absolute floor. The FTSE-100 is just a freight train going higher'.
https://www.fxempire.com/forecasts/arti ... sis-382583

The above text is transcribed from the video, which always elaborates and adds useful emphasis to the summary text that FXE provide. Actually, here, I'll post the summary text as well and you can see how they vary, and why I find an additional minute watching the daily vid useful:-

'The FTSE 100 rallied yet again during the day on Wednesday, as we continue to see an extraordinarily bullish move in this market. At this point, there’s no way to sell this market, and pullbacks must be looked at as potential value. The 7125 level remains a “floor” in the market as far as I can see, but quite frankly I am getting a bit worried about the acceleration of the move. Sooner or later we need a rest. However, that rest should offer quite a bit of value for those of you who are willing to wait.'

FredBloggs
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Re: Weather outlook for the FTSE

Postby FredBloggs » January 12th, 2017, 7:49 am

OK. When you see this kind of stuff you know the FTSE is at or very close to a significant correction downwards.

piccadilly
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Re: Weather outlook for the FTSE

Postby piccadilly » January 12th, 2017, 8:56 am

I agree,reading the above, this level is not sustainable.

FredBloggs
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Re: Weather outlook for the FTSE

Postby FredBloggs » January 12th, 2017, 9:54 am

piccadilly wrote:I agree,reading the above, this level is not sustainable.

Until very recently I was quite comfortable with the lack of buy, buy, buy hysteria this time around. This is the first I have seen of it. Time to sell, very soon, I fear.

oldcharlie
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Re: Weather outlook for the FTSE

Postby oldcharlie » January 12th, 2017, 12:01 pm

Although there has not been a close above 7300, I am inclined to back the raging bull . Buying after a pullback, ensuring no significant break of support, would seem to be the safe option. There are several upside targets on the P & F and no downside targets.
Updata are very enthusiastic for this market.

Since further weakness in £ is practically guaranteed which seems to be correlated with Market strength.

OC

DiamondEcho
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Re: Weather outlook for the FTSE

Postby DiamondEcho » January 12th, 2017, 12:46 pm

FredBloggs wrote:
piccadilly wrote:I agree,reading the above, this level is not sustainable.

Until very recently I was quite comfortable with the lack of buy, buy, buy hysteria this time around. This is the first I have seen of it. Time to sell, very soon, I fear.


IMO caution is wise, even cynicism depending on the source. But note his analysis isn't a mainstream media headline vying for attention. Furthermore he publishes c20 FX, Commodity and stock index analyses a day, so you might conclude his forecasting for the FTSE is within that global context. Perhaps his weeklies or monthlies would provide you with a deeper and more reassuring wider background. Current weekly -> https://www.fxempire.com/forecasts/arti ... sis-381796

IG tend to issue a shorter term view, and their dailies have recently noted less or no upside resistance levels. But on 3-Jan they noted an upside target level, +150 points higher, at 7300. No upside levels on Monday 9-Jan. 'Key resistance' at 7244 on Tuesday, which it stormed through. No upside levels yesterday. Today, upside resistance at 7295 and 7333. And FWIW downside levels support at 7250, and if it continues down through 7200 then 'sellers now in control'.

I'll take unemotional TA over a mainstream financial journalist for my data any day; but it's entirely up to the individual what sources they rely upon. I feel that there are a lot of unknowns priced into the London market, what with BREXIT, Trump etc. Maybe that's why the FTSE has been rather soggy of late in the mornings and then takes clearer direction from the US open.

DiamondEcho
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Re: Weather outlook for the FTSE

Postby DiamondEcho » January 12th, 2017, 12:58 pm

oldcharlie wrote:Since further weakness in £ is practically guaranteed which seems to be correlated with Market strength. OC


I agree. The FTSE-100 companies derive much revenue in foreign currency. With Sterling under the cosh the div increases start to look attractive. I've a big US$ derived div coming due in a couple of weeks, and last night I was mulling the FX rate vs that applied on the same div last year. The YoY rate difference alone suggests even a flat US$ div would equate to 14% more in Sterling terms.

FredBloggs
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Re: Weather outlook for the FTSE

Postby FredBloggs » January 13th, 2017, 12:44 am

Thanks for the perspectives. I by no means understand this stuff. For sure though, when conversation round the coffee machine or in the pub is about how far the FTSE is going to go up and how much money folks are making then its time to think about selling. I don't really understand or know how reliable good TA is, but the scenarios I'm outlining have never failed as far as I can recall. The precise moment the market falls is exactly coincidental to when nobody can see a reason why it should!


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