Good morning. Nice trade on the FTSE yesterday that actually dropped further than the point I took profit in the end, but even so the bulls came charging back to hit 6160 as a high, before dropping 100 again. Certainly volatile and I expect today and tomorrow will be more of the same as we approach NFP news tomorrow. Chinese markets are closed for the next 2 days though so that may help keep things a little bit calmer! That said I think the panic has been slightly overdone (for the moment and till the next one at any rate) so still have a slight bullish vibe, at least for 6187 today where we have the top of the Bianca 20 day channel.

US & Asia Overnight from Bloomberg
Asian stocks rose, following a rebound in U.S. shares, with markets in China and Hong Kong closed for a holiday.

The MSCI Asia Pacific Index gained 0.4 percent to 126.45 as of 9:01 a.m. in Tokyo. Chinese shares closed lower on the last trading day of this week as investors assessed the level of state support before a major military parade on Thursday. Mainland markets are closed Thursday and Friday to commemorate the end of World War II.

“One modest positive today is the fact China is offline for its Victory Day commemorations,” said Chris Weston, Melbourne-based chief markets strategist at IG Ltd. “So traders and investors will be focused on domestic data, valuations and trying to understand how to navigate these crazy markets.”

E-mini futures on the Standard & Poor’s 500 Index added 0.3 percent following a 1.8 percent gain on the underlying index on Wednesday. The U.S. equities gauge slumped 6.3 percent last month as China’s currency devaluation spurred concern over global growth, erasing more than $5.7 trillion in equity market values worldwide, while volatility surged the most on record.

South Korea’s Kospi index rose 0.7 percent and Australia’s S&P/ASX 200 Index gained 0.5 percent. New Zealand’s NZX 50 Index advanced 0.7 percent. [Bloomberg]

FTSE Outlook

FTSE 100 Prediction

FTSE 100 Prediction

Todays pivot is 6107 and that tallies with the bottom of a rising 10 min channel for support. As such I think any initial dip will find support around there and be set for a rise towards the 20 day Bianca channel top which has dropped down to 6187 for today. With 30min channel resistance at 6190 I think that might cap any initial rise, and with China closed today traders might just see today as a chance to catch their breath (thats jinxed it now) and get ready for NFP news out of the US tomorrow. ADP yesterday can give a bit of a clue and was favourable so we might get an NFP figure around 215k. Generally I am still feeling fairly upbeat for the short term and can see the FTSE hitting 6300 in September, maybe 6400. However, longer term predictions seem to be getting harder to make these days so i will keep focussing on the 30min chart for daily trading. And that looks good for a rise today to 6190, if the bulls can break the early resistance at 6150.

Good morning. I am not sure what that rise was all about to 6245 yesterday at the open but it certainly worked in our favour with the long from 6108. After that rise the FTSE spent the rest of the day being bearish, dipping just below 6000 as the US session closed, with the Dow posting -500 at the time. However, as all the headlines started to ping up about it the bounce started and 100 was added quite quickly, with another 200 added overnight. The FTSE now sits at 6080. There was an interesting call from Morgan Stanley last night too who bravely called the bottom around the current moment in time, read more here. Time will tell if that comes to pass or not. Things look quite positive for a bullish start, if the bulls can hold 6060 support.

US & Asia Overnight from Bloomberg
Asian stocks fell, following a decline in U.S. shares, as weak American manufacturing data added to concern about a slowdown in global economic growth.

The MSCI Asia Pacific Index dropped 0.7 percent to 125.97 as of 9:02 a.m. in Tokyo. Anemic demand from emerging markets including China translated into leaner factory order books in the U.S., data showed Tuesday.

Futures on the FTSE China A50 Index slid 1.5 percent in most recent trading in Singapore, with contracts on the Hang Seng Index declining 0.7 percent.

“You have worries about the global growth outlook led by Chinese concerns at a time when the Fed is thinking about raising interest rates, and that’s leaving investors very twitchy,” said Shane Oliver, a Sydney-based global strategist at AMP Capital Investors Ltd. in Sydney, which oversees about $114 billion. “I think we’ve seen the worst, but it’s an environment where volatility is likely to continue.”

Japan’s Topix index declined 1.7 percent. South Korea’s Kospi index retreated 1.5 percent and New Zealand’s NZX 50 Index lost 1.3 percent. Australia’s S&P/ASX 200 Index fell ahead of a report on the nation’s economic growth. Markets are yet to open in Hong Kong and China.

In addition to the U.S. manufacturing report, an official factory gauge in China dropped to a three-year low in August, while measures for the euro area signaled a divergence in the German and French economies. An index for Germany expanded more than forecast and a French measure showed contraction, according to Markit Economics. U.K. manufacturing growth cooled as export orders declined for a fifth month. [Bloomberg]

FTSE Outlook

FTSE 100 Prediction

FTSE 100 Prediction

6060 looks a decent support level initially, as we have a bullish set up on the 30min chart with support there. This is the first time the 30min has been bullish this week so it will certainly be interesting to see if that level holds. We have had a decent overnight bounce from the 5980 low despite a bearish Asia and more weak data – though the flip side is of course rates won’t be rising in that case, hence this rise. If the bears break the 6060 support area then I would expect a dip back to 6000 area, and maybe lower they really start getting some momentum. The bottom of the daily channels are still quite far below at 5800 for the 10 day Raff and 5766 for the 20 day Bianca. Generally today I feel fairly positive, as long as that initial support holds.

Good morning. A lot of people will be glad August is over which was the worst monthly performance for 4 years, but we are not home and dry yet by any means. Markets are still looking for clues for the Fed’s rate rises, while confidence has been knocked by China’s ability to keep powering on.

US & Asia Overnight from Bloomberg
Asian stocks fell, extending the biggest monthly loss since May 2012, as regional shares followed U.S. equities lower and investors awaited reports on Chinese manufacturing.

The MSCI Asia Pacific Index slid 0.2 percent to 129.69 as of 9:01 a.m. in Tokyo. E-mini futures on the Standard & Poor’s 500 Index fell 0.7 percent in most-recent trading after the U.S. benchmark slid 0.8 percent on Monday in New York. The official gauge of China’s manufacturing industry will fall to a three-year low in August, according to the median of economist estimates compiled by Bloomberg before data due Tuesday.

“We should see an extension of yesterday’s losses in the equity market, although how Chinese markets fare is anyone’s guess,” said Chris Weston, Melbourne-based chief market strategist at IG Ltd. “The authorities want “a stable market ahead of the World War II commemorations but how they go about achieving that is not immediately apparent.”

Futures on the FTSE China A50 Index rose 0.7 percent in most-recent trading in Singapore. Contracts on the Hang Seng Index and on the Hang Seng China Enterprises Index of mainland firms listed in Hong Kong gained 0.4 percent.

Fluctuations in Chinese markets in August rattled investors worldwide as they struggle to anticipate policy actions in the world’s second-largest economy. Stocks in Shanghai rallied almost 10 percent over Thursday and Friday on speculation authorities are propping up markets before President Xi Jinping takes the stage at a commemorative parade the government will use to demonstrate its rising military and political might. The city’s equity measure declined 12 percent last month.

M&A, Buybacks
China will encourage listed companies to conduct mergers and acquisitions, buy back shares when prices are low and pay higher cash dividends as the government extends efforts to boost share prices. The steps are aimed at increasing the investment value of listed companies and promoting stable and healthy growth of capital markets, the China Securities Regulatory Commission said in a statement posted on its website on Monday.

Australia’s S&P/ASX 200 Index gained 0.1 percent ahead of the central bank’s interest-rate decision. Traders and economists expect the Reserve Bank of Australia to keep its key lending rate at a record-low 2 percent.

South Korea’s Kospi index retreated 0.3 percent and New Zealand’s NZX 50 Index slipped 0.6 percent. Japan’s Topix index fell 0.7 percent after capping a 7.4 percent slump in August.

The S&P 500 posted its worst month in more than three years in August, falling 6.3 percent as investors harbored concerns about slowing global growth and the impact of a potential interest-rate increase by the Federal Reserve. [Bloomberg]

FTSE Outlook and Prediction

FTSE 100 Prediction

FTSE 100 Prediction

Well after August’s volatility I wonder how September is going to play out… We have dropped off a bit from the high over the bank holiday weekend, at 6230, and with the 200ema on the 30min showing support at 6140.If not then the lower support is 6125 where we have a fib retracement level with 6108 below that. The daily channels are offering support quite far below where we are, mainly as the volatility has been high the channels have widened a lot. Both Raff and Bianca have 5800 area as support, which I don’t think we will be testing today. I am still thinking that we recover from the recent loss for a rise towards 6425ish in September, before another leg down (am looking at 17200 on the Dow or thereabouts). For today I can see a rise towards 6200 initially, and we have the top of the declining 30min channel with resistance at 6226, which joins up the 2 most recent highs (6258 and 6230), as such the bulls will be keen to break that level sooner rather than later. For today I am looking at resistance at 6200, 6225, and support at 6140 and 6108.

Good morning. Here we are at the end of August and its been quite the rollercoaster! UK markets are closed on Monday for the bank holiday so back for the start of the new month upon Tuesday. As such I think a lot of traders will be glad to see the back of August! We got a decent rally yesterday with prices rising above 6200 during the session and peaking at 6230 after the bell. Dropped back a bit since, so we may see some profit taking today, especially as we have a long weekend coming up. A dip from the 6200 area towards 6168, and 6145 I am thinking.

US & Asia Overnight from Bloomberg
Asian stocks rose for a third day as a global rally gathered pace and the U.S. economy grew faster than expected in the second quarter.
The MSCI Asia Pacific Index gained 0.4 percent to 129.32 as of 9:01 a.m. in Tokyo. The gauge, which began this week with a two-day 5.1 percent slump, has rallied the past three days. Futures contracts indicated Chinese markets will continue a rebound, with contracts on the FTSE China A50 Index gaining 2.3 percent and those on the Hang Seng China Enterprises Index rising 1.8 percent.

Data on Thursday showed U.S. gross domestic product rose at a 3.7 percent annualized rate, exceeding all estimates of economists surveyed by Bloomberg, and up from the 2.3 percent reported last month. A separate report showed filings for jobless benefits declined to a three-week low.

“It gave credence to the story that the U.S. economy could be building momentum,” said Chris Green, an Auckland-based strategist at First NZ Capital Ltd. “In the world we’re looking at now, that is of some comfort. We seem to have gained some sort of stability and people are focusing more on the underlying strength of the U.S. economy.”

The data come as Federal Reserve policy makers debate whether growth is strong enough to withstand the first increase in the interest rate since 2006. Central bankers gather at Jackson Hole, Wyoming, for a discussion on inflation just as China’s slowdown renews fears of falling prices. Fed Chair Janet Yellen won’t attend this year.

Regional IndexesJapan’s Topix index advanced 2 percent. South Korea’s Kospi index gained 1.3 percent and Australia’s S&P/ASX 200 Index rose 0.5 percent. New Zealand’s NZX 50 Index added 0.9 percent.

This three-day rally halted a global selloff that engulfed markets since China devalued its currency on Aug. 11, an unexpected move that ignited concern that the slowdown in the world’s second-largest economy may threaten global growth.

“It’s been a very volatile week and I’m glad it’s over,” Green said. [Bloomberg]

FTSE Outlook

FTSE 100 Prediction

FTSE 100 Prediction

Today’s pivot is 6168 and I think we will have a dip this morning to test that level, either from 6200 or slightly higher if the bulls are quick out the blocks, 6235 which is yesterday high and the top of the 10 day Raff. Generally i am still bullish going into September and I expect us to see 6420/6450 next week. I don’t think rates will be adjusted next month. As mentioned yesterday I wouldn’t be surprised if the Dow rises to 17250 on this bounce from this weeks lows. I have gone for an initial dip as the 10 min chat has swung to bearish overnight, however the 30min and above are all still bullish, hence why i have plotted fairly shallow dipping arrows for the bearishness. Its a Friday before a bank holiday so I don’t expect lots of traders to be piling into new positions. We have our GDP data out at 09:30 forecasted at 2.6% so will be interesting to see what that result is. There is also some German CPI news out at 1pm so might get some movement around then too.

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