FTSE for Thursday 19/03/2020

#Gold #SP500 #FTSE A few financial journos have been suggesting the stock markets close during this time of crisis. Needless to say, there’s an opposing viewpoint but the funny thing is, they’re both probably correct. During the last crash, we’d naively written for trading in banking shares to be suspended until such time the markets stabilised in the years ahead. This enlightened attitude may have been something to do with 1/4 million shares in RBS and watching life savings going on a prolonged holiday!

The “funny” thing, when RBS hit 9.8p in March 2009, rather a few folk pounced, doubtless believing the 10p level was certain to provide a reasonable bounce. This supposition proved correct. Until now! With RBS hitting 125p on the 18th March (let’s be honest, it’s really 12.5p) we’re not entirely confident of a bounce appearing. We remain trapped in the bank, thankfully our overall shareholding now reduced to less eye-watering, loss-making, levels.

As for the stock market, the day to close the markets was 6th March. On that day, the FTSE closed below the uptrend since 2009, achieving a lower low. To us, this was a bad thing.

But crucially, the closure could not be justified unless one was pretty confident in what was coming next, the good old “time machine” scenario. Needless to say, we had a report published on the 6th (link), one which has proven rather concise in the 2 weeks since. Unfortunately, despite being proven correct in our reversal scenario, we’re uncomfortable with any “shut the markets” philosophy unless it’s introduced with precise criteria to justify re-opening. In addition, a policy of market closures would need equal safeguards for sudden, unprecedented, rise in the markets.

For instance, what if a cure for Covid-19 were announced, something cheap which could simply be added to drinking water. Or preferably whisky!

The next day, the markets would move faster than someone with a dodgy immune system, hearing a distant cough…

Hey, chart goes here

As for the FTSE near term, some very slight hope feels possible, the FTSE ‘only’ needing to exceed 5181 to enter a cycle to an initially 5245 points with secondary, if exceeded, calculating at 5323 points.  We’re less than confident with this scenario, thanks to the minute by minute chart below. As shown, since 6th March, the UK index has adhered to a fairly firm pace of reversal below Blue. Only with a fairly solid chunk of movement above this trend will we dare raise an eyebrow.

Should the more recent pattern of misery repeat, now below 5006 points looks very capable of reversal to 4863 with secondary, when broken, at 4780 points.

Hey, chart goes here

FUTURES

Time Issued

Market

Price At Issue

Short Entry

Fast Exit

Slow Exit

Stop

Long Entry

Fast Exit

Slow Exit

Stop

Prior

9:34:58PM

BRENT

27.42

Success

9:36:57PM

GOLD

1486.73

1472

1452.5

1419

1504

1522

1554

1589

1504

9:39:39PM

FTSE

5079

9:42:38PM

FRANCE

3765.8

‘cess

9:45:27PM

GERMANY

8449

‘cess

9:56:14PM

US500

2391

2271

2221.5

2059

2420

2460

2478

2547

2361

Success

10:07:35PM

DOW

20079

Success

10:09:45PM

NASDAQ

7150

Success

10:12:13PM

JAPAN

16513

18/03/2020 FTSE Closed at 5080 points. Change of -4.04%. Total value traded through LSE was: £ 9,714,451,101 a change of 6.42%
17/03/2020 FTSE Closed at 5294 points. Change of 2.78%. Total value traded through LSE was: £ 9,128,689,221 a change of -13.38%
16/03/2020 FTSE Closed at 5151 points. Change of -4.01%. Total value traded through LSE was: £ 10,538,775,450 a change of -6.31%
13/03/2020 FTSE Closed at 5366 points. Change of 2.46%. Total value traded through LSE was: £ 11,248,883,463 a change of 60.84%
12/03/2020 FTSE Closed at 5237 points. Change of -10.87%. Total value traded through LSE was: £ 6,993,953,766 a change of -24.85%
11/03/2020 FTSE Closed at 5876 points. Change of -1.41%. Total value traded through LSE was: £ 9,307,244,216 a change of -11.98%
10/03/2020 FTSE Closed at 5960 points. Change of -0.08%. Total value traded through LSE was: £ 10,574,130,773 a change of -8.51%

 

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