Dear all,

I thought today, a key reversal day on the FTSE, after a Fibonacci Classic thirteen day sell off was a very good time to start some Candlesticks commentry on the FTSE 100.



We have a a thirteen day sell off, the longest continuous down day period since 1947, followed by a clear hammer bottom reversal, from L 3391.50 to H 3493.70, an intraday swing of 102.20 points, hammer reversal point 33.33% head/66.66% tail required, original run to 3490.70 fading at peak 3493.70 dutifully turned towards close at 3457.60/3459.62 area, hammer neckline, closing at C 3483.80

Hence:-

Head = H 3493.70-C 3483.80= 9.90 points
Tail = C 3483.80-L 3391.50=92.30 points

Previous day a bullish Long Legged Doji Formation indicating upcoming reversal, followed by strong hammer bottom, verging on dragonfly doji reversal, ie very bullish.



What we hope to see is a hammer bullish engulfing formation tomorrow in order to confirm this bullish reversal of the trend.

Cheers

Ashley

Where to tomorrow Ash?

Insider Trader,

Well on profit taking we held above 3672.00, before rise towards close at 3689.40.

Basically I can see some profit taking at some stage but unconcerned provided 3659.90 holds, I expect this rise today to possibly bring more capital into market, although stress 1,093,794,484 volume is not massive.

I think we will break 3709.50 tomorrow possibly, and I still see by Wednesday possible 3784.50/3807.50 this week on or around 34 day EMA.

Hopefully got it right this time Pivot Points and Support and Resistance tomorrow as follows:-

Definition

The pivot point and its support and resistance pairs are defined as follows:

Pivot point (P) = (H + L + C) / 3 First resistance level (R1) = (2 * P) - L First support level (S1) = (2 * P) - H Second resistance level (R2) = P + (R1 - S1) Second support level (S2) = P - (R1 - S1)

where H, L, C are the previous day's high, low and close, respectively.

My calculations showed today FTSE 100 UKX:-

H --3698.90
L --3649.90
C --3689.40

T-11,038.20

Therefore:-

Pivot 3679.40

Hence:-

R1 3708.90
S1 3659.90
R2 3728.40
S2 3630.40

So I am qualifiedly bullish, I think many may have sat on sidelines and would have needed to see a 122.00 point FTSE rise to have believed time to enter market long.

FTSE is still oversold relative to DJIA, S & P 500, on a two day view I think 3784.50/3807.50 this week by Wednesday on or around 34 day EMA will be achieved which would represent a 38.20% or 5 day Time Fibo retracement of the 13 day drop, noting that Friday made a higher high just at 3580.50, so to me counts as an up day.

A 61.80% Fibonacci Retracement of 49.00 point gain from O 3649.90 to H 3698.90 put us at 3668.60 above previous resistance being support on hammer bottom 10th October 2002 at 3663.40 area.



The most important thing is we have significantly broken important resistance at 3609.90, 3625.90 and 3663.40, so I think short term trend is up.

DJIA Short term chart may reinforce this short term bullishness:-



All IMHO, NAG, DYOR etc, etc

Best regards

Ash

Insider Trader,

Following DJIA Close.

To confirm I do see a retest of 3663.40 to 3668.60 area tomorrow possibly, but retain my short term bullish stance, MACD remains IMHO oversold, RSI looks poised to break 50%, and Slow Stochastic has not yet reached 80% let alone bent over at 90% approx.

Towards the end of January 2003 I called an arbitrage pairs opportunity short DJIA/Long FTSE to arbitrage the then differential between current pricing and normal --> 2/1 DJIA/UKX Ratio, while retaining an effectively perceived neutral directional risk to the markets as a whole.

The convergence of the two indices definitely seems to be happenning, here is the latest:-

DJIA O:8053.74 H:8152.08 L:8053.74 C:8109.48
FTSE O:3567.40 H:3698.90 L:3567.40 C:3689.40

Ratio
FTSE/DJIA O:44.29% H:45.37% L:44.29% C:45.49%

Basically we are seeing a convergence towards 50%, with a current divergence reducing from 44.29% to 45.59% today, a 2.72% convergence of the two indices.

Here is Three Month Convergence/Divergence Daily:-



Here is Three Year Convergence/Divergence Weekly:-



All IMHO, NAG, DYOR etc, etc

Best regards

Ashley

Insider Trader,

Well breach of S1 Level at 3659.90 should have triggered stops to close on rally to 3684.00 this morning.

Interesting that profit taking leads to a fall from H yesterday 3698.90 or C 3689.40 to an Intraday L of 3637.30, above S2 level, and above 78.60% level or 21.40% Retracement level of 307.40 point gain from L 3391.50 to high 3698.90 at 3633.10.

Basically yesterday saw a rise from 3567.40 to 3698.90 131.50 points, or closing 122.00 points at 3689.40, today our low at 3637.30 is 61.60 points ie a 50% retracement of yesterday's gain (50.49% of O C or 46.84% of O H)to retest trend line support.

Important issue is S2 is not breached and I guess a retracement was on the cards after yesterday's 3.42% rise in the indices.

Hopefully tomorrow will give the direction up or down.

Right now assuming we do not break 3626.40 23.60% (72.50 points) retracement level to S2 3630.40 level we may see the FTSE regain it's possibly more durable one day up, one day retracement pattern from 29th January 2003 hammer.

War worries no doubt persist though arguably factored into the markets already.

All IMHO, NAG, DYOR etc, etc

Cheers

Ash

Seems to be bouncing from 61.80% Fibonacci Retracement level of yesterday's 122.00 closing gain 3567.40 to 3689.40 at 3614.00. Not sure for how long.

38.20% Retracement of whole 307.40 points rise L 3391.50 H 3698.90=3581.50
50.00% Retracement of whole 307.40 points rise L 3391.50 H 3698.90=3545.20
61.80% Retracement of whole 307.40 points rise L 3391.50 H 3698.90=3508.90

Looks bearish although may turn from 3581.50 IMHO

Pivot points for tomorrow for those interested.

Hopefully got it right this time Pivot Points and Support and Resistance tomorrow as follows:-

Definition

The pivot point and its support and resistance pairs are defined as follows:

Pivot point (P) = (H + L + C) / 3 First resistance level (R1) = (2 * P) - L First support level (S1) = (2 * P) - H Second resistance level (R2) = P + (R1 - S1) Second support level (S2) = P - (R1 - S1)

where H, L, C are the previous day's high, low and close, respectively.

My calculations showed today FTSE 100 UKX:-

H --3684.00
L --3590.10
C --3590.10

T-10,864.20

Therefore:-

Pivot 3621.40

Hence:-

R1 3652.70
S1 3558.80
R2 3715.30
S2 3527.50

All IMHO, NAG, DYOR etc, etc

Cheers

Ash

Ash

After todays events, it just shows we all must be ready to rethink our stances/calculations at the drop of a hat, and above all remember that the market is always right. Keep up the good work.

Ash excellent thread, don`t stop now

MikeShares,

Sorry I have decided to cease posting huge reams of information on the BB, but appreciate your kind words.

Regretably certain other people do not wish me to post extensively on the boards so I have taken the easy way out and stopped.

I do not intend to post much now on MoneyAM.

Hope you were long and made a good profit today.

Cheers

Ash

Ash our loss , have enjoyed reading with great interest, I have been flipping between both sides at present, I can get streaming chart there, I normaly print your thread off , as you go into great detail. "huge reams " from you Ash the more the better.

I wish you continued success for the future.

No Ash I was mostly bearish , that life.

Ash
only been on the bb for about a week and found your threads realy great.For a novice its hard to find people who genualy share information they have.Are there any other BB where you can find genuine tips from traders that dont feel they must keep things to themselves.
B

milkshares, beardy why don`t you go on the traders thread so stocks and ukx are combined. It might encourage other posters and anyway I find it useful in otder to gauge market sentiment

Hi all, discovered your thread too late, Ashley. I see you are stopping it. Our loss. I am just exploring the site at the moment. Any other FTSE threads?

Have a g-day all

TS

Nasty head and shoulders on UKX target length of neckline approx 3738.50 less 3714.50 ie 24 points off right shoulder at 3730, ie 3706.00 IMHO



Edited:- should be 24 points drop from neckline to 3689/3690 area.

Bull Manana IMHO

Night all

CHECK THE CHARTS AND THE HISTORY.