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The 6800 Clear Water Consensus On The Ftse 100 By Christmas


crashmonitor
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Weirdly this one keeps cropping up time and again on traders' web sites. Don't quite understand why there is clear blue water once the 50% retrace holds above 6445 other than the fact that above that level most of the shorts probably get spasticated and have to capitulate.

You could put it down to noise, but what adds a bit of credence is that the 6800 band all forecast the double dip to a possible sub 6100. This indeed occurred around the middle of the month. Hilsden was another that foresaw the double dip and is another in the end of year Santa rally camp.

So are you one of the 6800 Christmas fruit cakes? I guess the Market ought to end where traders think it will end.

http://www.iii.co.uk/articles/276971/how-ftse-100-can-hit-6800

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I wouldn't bet on 6800 necessarily, but think it's more likely than 5800.

What are the big issues now? Greece and Grexit, China and contagion, commodity weakness, interest rates in UK and US - all scary, but all known (fairly priced in or underestimated? Or overestimated even?!)

I think it's getting harder and harder to follow Carney's forward guidance, and interpret official statistics, and understand all the implications of Osborne's efforts to maintain property prices......

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Imo a lot will rest on the price of commodities and the state of the Syrian war. The sweet spot would be crude at $60 a barrel, just enough to keep the oil majors happy without spoiling the party for the rest.

Trouble is neither the price of commodities nor the state of the Syrian war are that predictable.

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  • 3 weeks later...
  • 3 weeks later...

Oil at $36 ended any chance of a decent rally. At the start of the month it was plain sailing at $50.

I'm a bit more bearish going forward once this Christmas bounce is done. We could easily have another go at 5500 in January. Indeed we had a mini capitulation at the start of 2015 after a late Santa rally to about the 29th December 2014. So long as commodities do recover, and that is still an if for 2016, then we should get a pick up in the second half.

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Yep. I will do another #foolcast. I think we'll be able to pick up stock at around the 5600 level sometime in the first 4 months of 2016.

I'm still haunted by the ghosts of Christmas past 2002. January dawns with GDP and house prices in complete overdrive but the FTSE goes into complete meltdown on the back of $25 Brent. Got down to about 3500 didn't it in that spring ?

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Oil at $36 ended any chance of a decent rally. At the start of the month it was plain sailing at $50.

I'm a bit more bearish going forward once this Christmas bounce is done. We could easily have another go at 5500 in January. Indeed we had a mini capitulation at the start of 2015 after a late Santa rally to about the 29th December 2014. So long as commodities do recover, and that is still an if for 2016, then we should get a pick up in the second half.

Jan 2015 was a modest (5%) retracement to 6600-6300 followed swiftly by an 800 point move to new highs at 7100 by April.

Similar move (scale) looks perfectly possible, but with a bit of a lag perhaps due to Q1/Q2 highs not dropping out of momentum averages until Q2 2016.

Cant see why FTSE would fall to 5500 in next few weeks but if it does it will be a steal. Next retracement probably only brief and minor as market realises were not in a bear, yield curve favourable, oil liquidation dissipates, steady global growth etc etc. hence, yet another btd/long trade opportunity whilst the usual suspects scream "DOOM" from the rooftops & the end of the world fails to materialise yet again. In truth most of these people should simply lend their money to banks, stay well away from risk assets and stop upsetting themselves.

Data favours +ve return 6 months post price dislocation (Basis SPX) . i.e. 5800-5900 August 24th = probable +ve return Feb 2016 of course it has been a +ve return since then in any event.

New highs in SPX could come as soon as Q1.

Edited by R K
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Seems to hinge on oil/china/dollar really.

Well since oil has fallen $80 already we know that cannot be repeated, so hit to CPI from another oil slide likely to be marginal.

Still think bonds are mispricing a successful reflation being heavily underplayed by FED/BoE for obvious reasons.

What a fantastic opportunity btw being missed to burn through cheap hydrocarbons (financed w cheap long term debt) to build out new infrastructure & new energy infrastructure. We should be grasping this gift in the West/UK.

Edited by R K
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Rates might not look so cheap in future.

That was the mistake of Ireland/Spain/Greece/Italy etc when they suddenly received German levels of rates on accession to the Euro.

It all depends on whether that debt you take on can be inflated away or not....not necessarily the price. Particularly if you are not taking on debt to actually earn more than the debt costs.

(however, I am in total agreement. Must make sense for the public sector to finance hospitals, schools, student loans on behalf of its people. Build houses rather than spend money on ever rising housing benefit....we could go on and on....there are clear business cases and low hanging fruit for cheap borrowing to generate sensible returns)

Thats irrelevant though isnt it. Long term debt is ultra cheap today & return on infrastructure projects far outweigh real cost today. If you borrow for 30 or 50 years at near zero real interest you would have to be pretty stupid not to make a return on much needed productive infrastructure.

UK has a sovereign currency so in no way comparable with minor participants in EZ fixed currency system. BoE covered £375bn in sov debt without breaking into a sweat and CPI is now 0.1%.

UK has made/is making a terrible generational error.

Edited by R K
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  • 1 month later...

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