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.

Good morning. Another volatile session yesterday which wasn’t really much of a surprise, with the FTSE hitting a high last night at 6120. The Fed hinted at a less likely rate rise in September now, which isn’t much of a surprise, though they are still saying that the data is strong. But the recent stock market weakness might cause them to delay. Asia stocks closed up for the second day, taking the FTSE up with it, though its now near the top of the 10 day Bianca at 6103.

US & Asia Overnight from Bloomberg
Asian stocks rose for a second day after U.S. shares halted a six-day rout.

The MSCI Asia Pacific Index gained 0.9 percent to 127.93 as of 9:05 a.m. in Tokyo. The Standard & Poor’s 500 Index jumped 3.9 percent, the most since 2011. Two things that have supported U.S. stocks in the past, dovish words from the Federal Reserve and improved economic data, halted a plunge that erased $2.2 trillion from equity values.

Global market turmoil has weakened the case for raising U.S. rates in September, Fed Bank of New York President William C. Dudley said, cautioning that it’s important not to overreact to short-term developments. Chinese stock-index futures signaled a rally, as contracts on the FTSE China A50 Index gained 1.7 percent.

“Solid U.S. economic data, stimulus efforts from the Chinese central bank and signs that the Federal Reserve are backing off from a September rate hike helped,” said Jasper Lawler, a London-based market analyst at CMC Markets. “Anxiety is likely to maintain a tight grip over investors until the wild gyrations in share prices calm down and signs of a bottom are put in markets.”

Japan’s Topix index rose 2.4 percent. South Korea’s Kospi index gained 0.5 percent and Australia’s S&P/ASX 200 Index climbed 0.7 percent. New Zealand’s NZX 50 Index rallied 1.3 percent.

The S&P 500 rose the most since November 2011 in New York, while the Dow Jones Industrial Average jumped 619 points, or 4 percent. Trading was subject to the same fluctuations seen in overseas markets. A surge in the first few minutes of trading was more than halved before an afternoon rebound took over. E-mini futures on the S&P 500 added 0.1 percent Thursday. [Bloomberg]

FTSE Outlook

FTSE 100 Prediction

FTSE 100 Prediction

We are starting off fairly positive after a decent US session that saw the S&P and Dow break back above fairly key round number levels (1900 and 16000) by some margin, and off the back of a positive Asia session. We are however just nearing the top of the 10 day Bianca and raff channels at the 6100 area so we may well see a pull back to the daily pivot at 6025 initially, though there is a pretty decent 10min rising channel in play, which has support at the 6075. There is also support on the 30 min at 6075 so the bulls might use this as an entry level to build on last nights gains. If the 6103 holds as resistance it might be worth a short here though to be honest over the next couple of weeks I am still feeling like we will see a bounce and am looking at 17250 on the Dow. That should tally with taking the FTSE back to 6500, so buying the dips does still feel like the right thing to do and I am still thinking that the Fed won’t cut rates in September, reinforced by Dudley’s comments yesterday.

Good morning. I was a bit early with the SMS to get long yesterday morning but well done those that re-entered on the bounce as it climbed as expected, hitting 6118 at the high. However, the volatility continued after the bell with an overnight drop to 5900 and is now back at 6060! Wild times and not a period to lose you head or risk your shirt. No harm in sitting on the sidelines like this if you are not able to fully focus! With these bounces I am still pretty positive overall, and see dips on shares and indices as good buying opportunities. I don’t think we will see interest rate rises soon, and the latest consensus for the UK rate rises has been pushed back to October 2016. This is quite a good article from Neil Woodford here

US & Asia Overnight from Bloomberg
Asian stocks rose, with Japanese shares rebounding from the biggest two-day plunge since 2011, as investors awaited the opening of mainland Chinese markets following Tuesday’s cut in interest rates.

The MSCI Asia Pacific Index advanced 0.7 percent to 125.75 as of 9:07 a.m. in Tokyo, after capping an eighth straight decline Tuesday to enter a bear market. Futures on the Standard & Poor’s 500 Index retreated 0.9 percent.

After the Shanghai Composite Index fell 7.6 percent Tuesday to cap a 22 percent, four-day plunge, China’s policy makers cut interest rates for the fifth time since November and lowered the amount of cash banks must set aside. While Chinese equity-index futures surged, with contracts on the FTSE China A50 Index jumping 4.9 percent, exchange-traded funds tracking the nation’s shares almost erased rallies in New York.

“China continues to be key,” Komal Sri-Kumar, the Santa Monica, California-based founder and president of Sri-Kumar Global Strategies Inc., told Bloomberg TV. “The authorities have not been intervening, they’ve been allowing stocks to go down in price. Assuming that continues to be the case on Wednesday, I do see a continued fall in prices.”

Japan’s Topix index rose 1.5 percent. Australia’s S&P/ASX 200 Index declined 0.7 percent and South Korea’s Kospi index retreated 0.2 percent. New Zealand’s NZX 50 Index added 0.2 percent.

Volume soared and swings on the regional Asia Pacific equity gauge broadened to the widest since March 2011 on Tuesday. The global share rout has wiped more than $8 trillion from investors since China’s unexpected devaluation of the yuan on Aug. 11. [Bloomberg]

FTSE Outlook

FTSE 100 Prediction

FTSE 100 Prediction

Its a wild week for trading thats for sure, though its bounced once again overnight and I think we will see the same again today as yesterday. Yes there is a lot of doom and gloom around, yes there is a weakening backdrop (but its been weak for ages), but equally the market is oversold still, as the daily RSI(10) is still below 30, though risen now to 29 from 15 yesterday and 9 on Monday. So there is a bit of strength around. If the bulls can hold above 6000 then we should see a retest of 6100, and the 200ema at 6112, and then possibly the top of the 10 day Bianca at 6222. We are just testing the top of the 10 day Raff at 6060 so we might well get a dip at around the open, which would take us down to the 25ema on the 30min at 6000 which looks like a decent spot for a long entry, with the bottom of the 20 day Bianca at 5942 below that.

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