#FTSE for Friday, 11/10/2019

#SP500 #JAPAN As the clock ticks down (or not) to Brexit, we’ve been considering suggestions on how to trade! The reason is fairly basic, there’s a good chance of market volatility with a bunch of lazy writers quoting trite Warren Buffet sayings. It would be nice to say we already know what’s coming but it’d also be utter bulls**t. While many respected economists are queuing up to do their “talking heads” thing to predict calamity, famine, markets crashing, lack of toilet paper, etc, it’s worth remembering not a single one of them got it right with the crash which culminated in 2009, a crash we still feel the effects of.

It’s possible, if these clowns are predicting chaos, we should actually anticipate the opposite, should Brexit actually happen.

One thing is certain. Even if there is no chaos, the market will invent some on Brexit day as wild swings will be the immediate fashion. Of course, the reason for wild swings is rather less glamorous than folk like to admit. A game of “trap the stop loss” and “trigger the order” will commence, effectively meaning STOPS and ORDERS risk proving a really bad idea.

Imagine, for instance, a trader with a cunning plan which involves Lloyds shares. Visually, there’s a heck of an argument suggesting this should go up in price, if it only betters 57p. Equally, if it drops below 48p, it’s probably going down. On Brexit day, it would be perfectly feasible for the price to surge to 57p for a second, triggering the buy order. And at 2 seconds past 8am, it would probably fall below 48p, triggering the stop loss.

So, if the trader had allocated £10K to the Lloyds trade, they’d lose nearly £1,600 within the opening seconds of the market day. This is not a fairytale, it happens.

To trade safely at Brexit, if Brexit ever happens, STOPS are liable to be the enemy and therefore, worth either expanding to absurd levels or removing entirely. Equally, on the subject of ORDERS, they can prove dangerous unless opting to chase the absurd. In the case of Lloyds, a buy order around 30p would make sense. RBS on the other hand allows 142p, perhaps even 100p.

We’ll cover this in greater detail as the month unravels.

As for Friday, the FTSE is making as much sense as a Labour politician when asked their policy on Europe. While genuinely preferring to avoid distain and distrust against any specific party (they all deserve it), Labour justifying a position where they approve of Europe membership, while being determined to leave is frankly beyond parody. Even up here in Scotland, lunatics appear to be flourishing in politics.

At a time when almost 1/4 million Scots marched in torrential rain, on Edinburgh last weekend for independence (somehow the media didn’t notice nor did the SNP) and nearly 2/3 of the country voted Remain, it would be logical to expect the SNP to be working hard to achieve their independent aim? Nope, their focus appears to be on saving England from its apparently mistaken belief that Leaving Europe is a good thing. Scottish politicians seem to be competing with the national football team in achieving absolutely nothing and being a joke in their own country.

The index closed Thursday at 7197 points and appears to have set 7225 points as a valid trigger level for any real rise. Above 7225 expects a useless 7235 points initially with secondary, if bettered, at 7309 allegedly. Recent market behaviour has seen rises fail roughly half way to their secondary and if this is the case again, the index will probably fizzle at 7270 points or so.

If triggered, the tightest stop looks like 7140 points.

The alternate position; what happens if 7140 breaks? We calculate reversal to an initial 7122 with secondary, if broken, at 7091 points. We’d add, if the index starts trading below RED, this years uptrend, Boris need only announce something daft to provoke 7027 points very fast.

FUTURES

Time Issued

Market

Price At Issue

Short Entry

Fast Exit

Slow Exit

Stop

Long Entry

Fast Exit

Slow Exit

Stop

Prior

10:09:55PM

BRENT

59.33

               

10:11:51PM

GOLD

1494.75

               

Success

10:24:09PM

FTSE

7166.23

               

‘cess

10:25:50PM

FRANCE

5563

               

Success

10:27:35PM

GERMANY

12208.35

               

10:28:54PM

US500

2951.62

2906

2885

2861

2930

2957

2965

2977

2906

‘cess

10:31:06PM

DOW

26616

               

‘cess

10:32:31PM

NASDAQ

7777.12

               

‘cess

10:34:09PM

JAPAN

21738

21448

21351.5

21219

21633

21749

21800

21967

21570

‘cess

 

10/10/2019 FTSE Closed at 7186 points. Change of 0.28%. Total value traded through LSE was: £ 5,457,100,667 a change of 4.75%

9/10/2019 FTSE Closed at 7166 points. Change of 0.32%. Total value traded through LSE was: £ 5,209,605,060 a change of -0.79%

8/10/2019 FTSE Closed at 7143 points. Change of -0.75%. Total value traded through LSE was: £ 5,250,871,756 a change of -5.63%

7/10/2019 FTSE Closed at 7197 points. Change of 0.59%. Total value traded through LSE was: £ 5,564,169,791 a change of 8.23%

4/10/2019 FTSE Closed at 7155 points. Change of 1.1%. Total value traded through LSE was: £ 5,141,232,015 a change of -4.88%

3/10/2019 FTSE Closed at 7077 points. Change of -0.63%. Total value traded through LSE was: £ 5,404,760,567 a change of -16.8%

2/10/2019 FTSE Closed at 7122 points. Change of -3.23%. Total value traded through LSE was: £ 6,496,135,228 a change of -7.41%

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