Archive for January, 2012

Looking for a dip

Sat, 28th Jan 2012 Leave a comment

Candlestick chart of FTSE-100 at 27th Jan 2012The above chart is a close-up of the three tramlines in my previous post with a fourth line showing the rising lows beneath the middle tramline. This triangular formation suggests a drop is imminent, probably to my bottom tramline. I would expect the index to poke its nose over the middle tramline before turning though, possibly approaching 5900, which would correspond to around 13000 on the Dow, a likely resistance level I feel. From there, I’m looking for a drop of around 450 points. After that, assuming nothing happens to upset the “recovery” story in the US or the “they’ll muddle through” story in Europe, I think the FTSE will continue to make progress up to 6000. This is what the conspirators are predicting as well, so ordinarily I would have severe doubts, but I find the chart quite compelling and I think I will run with it anyway.

I also note that the index, though not rising particularly strongly, has remained above the 20-day moving average for five weeks now, which is quite a long time and suggestive of a significant dip being due. In addition, my financial bookmaker reports that sellers outnumber buyers on the FTSE 70:30, but I am not sure how significant this is as it can often pay to bet against the herd.

Categories: Betting, Lunacy

Still in two minds…

Sat, 21st Jan 2012 Leave a comment

Chart of FTSE-100 at 20th January 2012I’ve added a third tramline to my chart, just below the top one, that touches quite a few points. With the Dow approaching its one year high, the index could turn round at either of these upper lines, but there is also still quite a lot of positive sentiment which could take it higher. Many commentators are saying that shares are “good value” because of the miserable returns available on cash or gilts, but I still think the potential downside is far too high for long term investment at the moment. I seem to be in the minority for now though, so shares could easily continue higher in the short term. On the other hand, the sovereign debt crisis could blow up at any time and shares could plummet. Consequently I still cannot call which way the index will go.

Talk in the US is still of recovery and the eurozone crisis has rumbled on for some time now and could continue to do so for a while yet, but there is the more pressing issue of whether Greece can avoid an official default. If her bondholders cannot be persuaded to voluntarily accept a large reduction in the value of their holdings (which would mean they can’t claim on their default insurance) Greece wouldn’t have much choice other than to declare itself bankrupt. This would raise questions about the breakup of the eurozone and create a lot of fear, uncertainty and doubt, depressing sentiment significantly.

Categories: Betting

Just drifting in little news

Mon, 16th Jan 2012 Leave a comment

FTSE-100 at 13th January 2012The FTSE has made little progress over the last two weeks, failing several times to break through 5700. It is still below its October high unlike the Dow which is drifting higher on hopes of economic recovery:

Dow Jones at 13th January 2012Last year saw a US government initiative to boost growth by allowing a 100% deduction against tax of investment, which has now expired. It remains to be seen how much this will affect “growth” as any extra last year was simply brought forward and will be lost this year. The Eurozone issue rumbles on, but is being superseded by the growth story in the US. On this side of the pond, however, it is still suppressing sentiment, but I still think the Dow might drag the FTSE to my upper tramline, though it’s taking longer than I expected and so the FTSE will have to go higher than I anticipated to meet it. With no decisive moves on the cards I am not betting at the moment.

Categories: Betting

I’ve found some tramlines…

Mon, 2nd Jan 2012 Leave a comment

Chart of FTSE-100 at 2nd January 2012I’d like to buy into the FTSE in the hope of a continuation of the Christmas rally up to 5800, which would be the top of a pair of tramlines I’ve noticed recently, but the UK market is closed today. It’s generally best to trade at the top or bottom of tramlines, rather than in the middle, but the traditional Christmas rally started quite late last year, so I think it is a fairly good bet that it will continue into the new year. Unfortunately, the european markets that are open today are up around 2% so it probably won’t be worthwhile getting in tomorrow. 5800 is also a significant support level from before the August slump that could easily become a resistance level on the way back up and therefore a likely turning point at which the next mini crisis could take hold.

Categories: Betting