|
 |
|
Monday, May 20, 2013, Marketing Communication
|
|
|
 |
|
|
|
FTSE 100, Daily
|
 |
|
Last week we stayed bullish in the near term, over the past week the buying interest has remained robust.
The chart details how the FTSE has posted extremly strong gains from the April lows, this speed of gains is unsustainable for the long term, however as yet the technical strenghth remains. The RSI has naturally moved into overbought areas, but RSI was not developed to be used in strong trend markets. In fact in recent years overbought conditions, early in a trend, can be used as confirmation that the trend is genuine.
On the chart above we continue to note the possible five wave impulse move higher from November 2012 to the recent highs (1-5 in red). From this move we can see the abc correction to the recent lows. Corrections often find support from the Wave 4 of the previous impulse. The buying from 6,200 in April found strong support from this area.
The price action has now moved up to fresh multi year highs, and close to breaking the 2007 highs of 6755. Suggesting that the current price action is indeed the start of a new impulse move higher. The FTSE 100 is trading above its 20 period moving average, and the RSI has broken the previous bearish trend line, black line, calculated from the bearish divergence described in February. As a result the technical picture remains solid.
Short selling the index is most certainly not advised, as we do see buyers interested in buiying into themarket on any minor weakness that may emerge.
As a result the technical picture remains solid. The near to medium term outlook on the FTSE 100 remains strong while the near term trend holds. Leaving the expectation that a 'buy on weakness' sentiment will be the dominant story for the days ahead, and seems to be upgraded to a 'buy on any weakness'. The contrarian will be waiting for this near term bubble to burst, the first such indication would be a breaking of the short term bullish trend, blue line.
|
|
FTSE 100, Weekly
|
 |
|
Last updated, May 2013
The graph above throws up a possible medium term Elliott Wave count on the FTSE 100. We can see how from the 2009 lows there was a fairly clear impulse move higher, Red 1-5, followed by a simple abc correction. Another impulse move higher brought us up to the highs of 2011.
From these highs the FTSE appears to have set up a combination correction. Where a simple abc correction has been followed by an ascending triangle c wave, (ABCDE). This possible count is giving quite an optimistic upside target limit. As Wave 3 of an impulse cannot be the shortest wave within an impulse wave of higher degree. Wave 3 on this count is less than the height of Wave 1, so we know that Wave 5 cannot move further than the highest of Wave 3 without negating this potential count. This level is up at 7136. This is the height of Wave 3 projected onto the low of corrective Wave e.
So from an Elliott Wave perspective over this timescale there are bullish arguments for a move up through and beyond the all time highs, and that this strength could start to fail early in 2014. The highs of corrective waves b and d could be used as stop areas to negate this potential count, or the 2011 highs could be used for the more cautious.
|
|
FTSE 100, Monthly
|
 |
|
Text last updated, May 12th, 2013
The monthly timescale naturally takes the long term view so the commentary in this section will only be updated as and when market events dictate. So regular readers of this report will only need to read the monthly and weekly sections on a relatively infrequent basis. However we include all the information to give new readers the full picture.
The monthly graph for the FTSE 100 quite clearly shows how the index posted an extremely powerful move into the end of the last century, first red line.
From the all time highs in the index at 6950 the FTSE slumped 50% to the 2003 lows. In hindsight we can see this move as an understandable and even justifiable re-examination of the strong gains posted in the previous 20-30 years. From 2009 the FTSE has posted a strong recovery and currently is posting moves up to its all time highs, moves already posted by the S&P 500, Dow Jones and DAX. The FTSE has broken the upper bearish trend, black line, and continues to look set to follow the S&P 500 by posting a move up to its all tuime highs around 6950.
Moves under the longer term trend line, far right red diagonal line, could trigger the start of a more significant retracement, as seen with the breaks lower in 2001 and 2008. But while the resistance from the 2011 highs have been cleared, more optimistic long-term targets have been opened up, with moves up to the all timehighs now seen as most likely, while the strong longer term trend holds.
|
|
S&P 500 Graph, Quarterly
|
 |
|
The long term S&P monthly graph from 1930-2013 is uploaded to show how the broader US index index has now moved up to post fresh all time highs, following the trading from the TMT led highs posted in 2000 and matching the moves posted in recent weeks by the Dow Jones Industrials Average.
The buying from this initial break has been strong, posting a clear and positive break of the previous highs, and the previous trend, black line.
|
|
Nikkei 225, Quarterly, Semi-log
|
 |
|
Enclosed above is a quarterly graph on the Nikkei. We include this for those readers who may assume that all major stock markets are in a perennial bull trend, with only temporary bearish aberrations. This shows that G7 nations can be, and indeed some have been, in major bearish trends for over 25 years.
This graph also details the spectacular percentage gains posted by the index over the past 12 months, moving from 8,000 to 15,000 in under 12 months, pulling the index up through the upper end of the long term bearish trading channel, and also opening up its 2007 highs.
|
|
CFD Sales/Traders
- 0044 (0) 207 894 8883
- cfdsales@cantor.com
|
|
| |
Equity Spread Bet Sales
- 0044 (0) 207 894 8800
- sales@cantorcapital.com
|
|
|
Graphs
Graph images are created on Bloomberg, and remain under copyright to Bloomberg. Depending on your email settings the images contained in this note may not be downloaded correctly on the first viewing. Select the view 'Web version' link on the header, which will open a browser window that will display the images correctly.
|
|
Unsubscribing From E-mails
If you would like to be removed from all Cantor Capital Commentary notes then please click on the ‘Update Preferences’ link on the header, or the ‘Edit your subscription’ link on the footer and select the ‘Unsubscribe’ link at the bottom of this page that appears. This will remove your email from all Cantor Capital Commentary distribution lists.
|
|
Regulatory Disclaimer
This market commentary note (“note”) has been issued by Cantor Fitzgerald Europe (“CFE”), which is authorised and regulated by the Financial Conduct Authority (“FCA”). Cantor Index is a trading name of CFE. This note is defined by the FCA as a marketing communication. This note has been prepared and distributed for information purposes only and represents the personal views and opinions of the sender. This note is not “investment research”, a “research recommendation” or a product of the Research Department. Please be aware that the CFE Research Department may issue a formal recommendation and target price on the stocks mentioned, which may differ from the opinion given here. This note may contain information obtained by CFE from third parties; the source of information will usually be disclosed. CFE makes no representation and gives no warranty as to the accuracy or completeness of the contents of this note. Any person placing reliance upon this note does so at their own risk. Investors should consider this note as only a single factor in making their investment decision. The investment discussed in this note may be unsuitable for investors depending on their specific investment objectives and financial position. CFE, its officers, employees and affiliates shall not be liable to any person in any way whatsoever for any losses, costs or claims howsoever arising from any inaccuracies or omissions in this note or any reliance on this note. The recipient is strongly recommended to see independent legal, tax and financial advice. Past performance is not necessarily a guide to future performance. Income from investments may fluctuate. The price or value of the investments to which this note relates; either directly or indirectly, may fall or rise against the interest of investors.
This note should not be considered to be a solicitation nor an offer of advice for the purposes of the sale or purchase of any security, investment or derivative. The information contained in this note is not intended to form the basis of any investment decision and should not be considered a recommendation by CFE or any other person in relation to any of the companies, stock, commodities, currencies or other markets mentioned / referred to in this note. All the information contained herein is based upon information available to the public and has been obtained from sources believed to be reliable. However, the information contained in this note has not been verified by CFE and CFE undertakes no obligation to provide recipients of this note with any additional information or any update to or correction of the information contained in this note. This note is provided by CFE and may be forwarded unamended and in its entirety. This note may not be used in whole or in part to create any other work. All rights reserved.
FTSE International Limited (“FTSE”) © FTSE [2013]. “FTSE®” is a trade mark of the London Stock Exchange Group companies and is used by FTSE International Limited under licence. All rights in the FTSE indices and / or FTSE ratings vest in FTSE and/or its licensors. Neither FTSE nor its licensors accept any liability for any errors or omissions in the FTSE indices and / or FTSE ratings or underlying data. No further distribution of FTSE Data is permitted without FTSE’s express written consent.
CFE is authorised and regulated by the FCA under Firm Reference Number 149380. CFE – The Financial Services Register Information: http://www.fsa.gov.uk/register/firmBasicDetails.do?sid=61341
Registered in England No. 02505767
Registered Address: 17 Crosswall, London, EC3N 2LB
|
|
Risk Warning
Trading CFDs carries a high level of risk to your capital and is not suitable for all customers. Furthermore, margined products use leverage to increase the level of exposure to the product, and as a result your losses may substantially exceed your initial deposit and require you to make additional deposits at short notice. Prior to trading leveraged CFDs, you should carefully consider your investment objectives, experience and risk appetite and should not invest money that you cannot afford to lose.
Spread Bets are leveraged products placing your capital at risk. Losses can quickly exceed your initial deposit and thus require you to make additional deposits at short notice to maintain your positions. Leveraged products are not suitable for all customers. Please ensure you understand the risks involved before opening an account. You should ensure you fully understand the risks and seek independent financial advice if in doubt.
|
|
