FTSE 100 Support 6925 6924 6923 6900 6834 6739 6731
FTSE 100 Resistance 6959 6965 6970 6984 7010
Good morning. We got the steady rise to the 6945 level last night, however the bulls came in at just above 6890 as opposed to the pivot area at 6886 so was trying to be a bit too accurate with that long order I think! The SP Short got some points off the 2242 level (seems strange typing these levels for the US stock markets, having them making new all time highs!). The big news yesterday of course was that the European Central Bank pledged to cut debt purchases, while at the same time extending quantitative easing until the end of 2017. Crude oil rose a second day before a meeting between OPEC and other major producers on output cuts, as gold slumped.
US & Asia Overnight from Bloomberg
Crude oil rose a second day before a meeting between OPEC and other major producers on output cuts, as gold slumped. Asian stocks fluctuated at the end of their best week since September, while bonds and the Korean won declined as the dollar strengthened.
U.S. crude traded near $51 a barrel before talks Saturday in Vienna between the Organization of Petroleum Exporting Countries and 14 other nations. The Asia-Pacific equity benchmark swung as shares in Sydney and Tokyo climbed, while those in South Korea and Hong Kong slipped. Bonds from Australia to New Zealand fell after the European Central Bank pledged to cut debt purchases, while at the same time extending quantitative easing until the end of 2017.
The won trimmed its biggest weekly advance in two months.OPEC’s shock deal aimed at stabilizing oil prices will return to focus this weekend, with the meeting potentially giving investors clues as to whether the agreement will be fulfilled. While the ECB’s mixed message initially wrong-footed the market, it was eventually seen as a signal to buy equities as the extension of the current asset purchase program by three months was more than economists had expected. Attention now shifts to the Federal Reserve, with traders all but convinced the U.S. will end the year with an interest-rate hike.
“The immediate focus for the market is the discussions between OPEC and non-OPEC members this weekend,” said Jonathan Barratt, chief investment officer at Ayers Alliance Securities in Sydney. “The sweet spot for prices is around $55 a barrel. Anything higher and the market will see more supply.”
China’s factory-gate inflation rose to the highest since late 2011, helping to sustain prices around the world. Consumer prices picked up on rising food costs.
West Texas Intermediate crude futures climbed, extending Thursday’s 2.2 percent bounce and reducing oil’s retreat this week to 1.5 percent.
Russia will fulfill its pledge to cut output by as much as 300,000 barrels a day if OPEC follows through on its commitment to curb production, according to a government official familiar with the matter.
Representatives of countries including Mexico and Oman will meet with OPEC members in the Austrian capital.
Gold for immediate delivery fell for a second session, declining 0.3 percent to $1,167.91 an ounce and heading for the worst run of weekly losses in more than a year
About the same number of stocks rose as fell on the MSCI Asia Pacific Index, which was little changed as of 1:24 p.m. Tokyo time.
Japan’s Topix index added 0.7 percent as Australia’s S&P/ASX 200 Index rose by 0.4 percent, on track for a weekly jump of 2.2 percent.
New Zealand’s S&P/NZX 50 Index fell 0.3 percent, with the Kospi index in Seoul down 0.4 percent.
Hong Kong’s Hang Seng Index slumped 0.3 percent.
S&P 500 Index futures were little changed after the underlying measure climbed 0.2 percent to a new peak Thursday, swelling its post-election rally to more than 5 percent. The Dow Average added 65 points to a record 19,614.81, its seventh gain in eight days.
The yen, which typically moves at odds with Japanese stocks, fell another 0.3 percent to 114.43 per dollar, following a 0.2 percent pullback last session. It’s weakened 0.8 percent this week, set for its longest run of weekly losses in two years.
The euro was down 0.1 percent at $1.0606 following a 1.3 percent slump, which erased an initial surge of as much as 1.1 percent Thursday following the ECB’s statement.
The won lost 0.7 percent, snapping a three-day rally.
The Bloomberg Dollar Spot Index, which tracks the greenback against 10 major peers, rose 0.1 percent after gaining 0.5 percent on Thursday.
New Zealand government bonds due in a decade led losses in Asia, with yields rising nine basis points, or 0.09 percentage points, to 3.29 percent.
Yields on similar maturity notes in Australia climbed nine basis points to 2.82 percent.
Ten-year Treasury yields advanced by another three basis points to 2.44 percent, after gaining seven basis points on Thursday following the ECB’s move.
FTSE 100 Outlook and Prediction
The most major news today is a US confidence report at 15:30 so it should be a bit quieter than yesterday! After an initial drop yesterday on the ECB news the bulls came charging back and took the indices up, including new record highs for the US. It still looks pretty bullish and we have 6925 showing up on a few of the charts as decent support for today, certainly to start with. Below 6925 then we have 6900 for S1, and if the bears were really getting going, 6834 is now daily support.
Resistance wise, we have 6960 area to start with where we have the top of the 10 day Bianca, R1 and also the top of the 20 day Raff. Some fairly key daily resistance levels there so it will be interesting to see if we do reach that level if some profit taking comes in. Having stalled yesterday at the 6945 level and had a little dip back there is a chance that we will get the same again around the 6960 level. Its certainly been a fairly rapid climb this week (too far too fast?) and there are some overbought signs in terms of high RSI on Dax and US indices. High RSIs alone are not a signal to go short but do confirm overbought conditions.
Plan for today is a bit of a climb then a dip back from the 6960 level.