Support 5684 5670 5660 5630 5620 5608
Resistance 5695 5747 5771 5800 5833 5901

Good morning.
Market Summary for Monday
Another day of big negative moves with the FT100 dropping by 2.7%. Initially it appeared there may be a bounce from Friday’s close as the FT100 moved at the open above 5850 however worries about the banking system soon drove prices downwards for most of the day. Finishing below 5700 this is over 1300 points down from the summer peak! The worst performing sector was financials with commodity shares surprisingly strong. Out of hours the FTSE managed to climb to 5735 however its again dropped off from there (hitting the 25ema on the 30min chart as resistance).

US & Asia Overnight from Bloomberg
The global stocks rout intensified with equities in Tokyo sliding the most since August and index futures indicating U.S. stocks will add to declines that sent the Standard & Poor’s 500 Index to a 22-month low. The yen reached its strongest since 2014 and corporate bond risk climbed.

Stock gauges in Japan and Australia slumped and U.S. index futuresslid at least 0.8 percent. Markets from China to South Korea remained closed for Lunar New Year holidays. Evidence of mounting distress in global credit markets boosted government debt, with yields 10-year Japanese bonds tumbling as much as 5 basis points to below zero and Treasuries heading for their best start to a year since 1988. Gold was on track for its longest rally since 2011 as the yen surpassed 115 per dollar. Oil traded at about $30 a barrel.

“Investors had probably thought yesterday we might have hit bottom but they’ve been crushed,” said Nobuyuki Fujimoto, a senior market analyst at SBI Securities Co. in Tokyo.
“Greece, Deutsche Bank, shale gas — all we hear is bad news. Investors must have their heads in their hands right now.”

Traders have unwound bets for the Federal Reserve to raise interest rates this year as concern intensified over China’s capacity to deal with its slowing economy, and the impact of Japan’s imposition of negative interest rates. The distress that has brought global equities to the brink of a bear market in 2016 is flaring in the credit space, with the cost of protecting against company defaults worldwide surging. Deutsche Bank AG shares and debt slumped Monday amid questions over the lender’s ability to pay coupons on its riskiest bonds.

Markets in mainland China, Hong Kong, South Korea, Malaysia, Singapore and Taiwan are closed for the New Year holiday Tuesday.

Stocks
Japan’s Topix index tumbled 5.5 percent in Tokyo, falling the most since Aug. 24 as banks and financial shares led losses. The Nikkei 225 Stock Average dropped 5.4 percent, its biggest decline since June 2013.

“The yen is rising while U.S. Treasury yields are falling and gold prices are rising. Basically it’s showing a risk-averse market sentiment,” Toshihiko Matsuno, chief strategist at SMBC Friend Securities Co. in Tokyo, said by phone. “With increased concerns of a slowdown in inflation in the U.S. as well, market sentiment is being shaken.”

Energy and banking shares led Australia’s S&P/ASX 200 Index down 2.9 percent. The S&P/NZX 50 Index in Wellington lost 1.3 percent in its first day of trading this week.

MSCI’s All-Country World Index fell 0.4 percent, leaving it down 19 percent from a peak reached in May. Most investors regard a 20 percent retreat from a peak as the definition of a bear market.

Futures on the Standard & Poor’s 500 Index declined 0.9 percent with those on the Dow Jones Industrial Average and contracts on the Nasdaq 100 Index.

Equity losses took hold in Europe on Monday, with banks driving the Stoxx Europe 600 Index to its lowest since October 2014. Deutsche Bank tumbled 9.5 percent as analysts at CreditSights Inc. said it may struggle to pay coupons on its riskiest bonds next year should operating results disappoint or the cost of litigation be higher than expected. The lender said it has sufficient capacity this year and next.

While paring declines in the last hour of trading, the S&P 500 still ended Monday down 1.4 percent. The Nasdaq Composite Index neared a bear market as some of the biggest tech stocks dropped, bringing the gauge’s decline from a July record to 18 percent. [Bloomberg]

FTSE Outlook and Prediction

FTSE 100 Prediction

FTSE 100 Prediction

Yesterday started off looking bullish but the picture soon reversed and we got some pretty massive drops globally. No real reason apart from general fear/panic that everything is screwed! It was mentioned that the Vitol CEO’s negative comments played a part but I feel that was the news trying to fit to the price action rather than the cause. With China closed this week for their Lunar New Year it was eyes on Japan overnight, who shed 5%, to scupper the out of hours rise on the FTSE to 5735. Despite all that we know how fickle the market is so I think we might see a bit of a rise today, if the 5660 area holds as initial support. If not then the next support area is 5630 and I have plotted that with the pink arrows on the chart (blue is preferred, pink is plan B). A rise to the pivot at 5747 is what I am thinking, mainly as we are testing various daily channel areas round here as you can see from the levels to watch section below. If we break 5630 however, then I am fully expecting 5400 before too long, especially with oil remaining below $30. So, cautiously optimistic for today!

Support 5872 5870 5863 5854 5751 5747
Resistance 5906 5920 6006 6055

Good morning.
Market Summary for Friday 5th February
The FT100 traded around the 5900 level during Friday morning waiting for US job data at 1:30pm UK time.
The market then moved sharply lower after the January U.S. jobs report appeared to keep alive the prospect of a Fed rate hike this year.
Non farm payrolls increased by 151,000 jobs last month, below the 190,000 expected by economists. Despite the expected slowdown in job growth, the unemployment rate fell to 4.9 percent, the lowest since February 2008, and average hourly earnings increased 0.5 percent, suggesting the labor market recovery remains firm. The FT100 closed at 5848 with little buying into the close. The commodity sector was again strong with interest rate sensitive sectors weaker.

US & Asia Overnight from Bloomberg
The dollar rose for a second day against the euro and yen as investors looked toward Federal Reserve Chair Janet Yellen’s testimony to Congress Wednesday for signs of whether markets are underestimating the odds of a near-term interest-rate increase.

The greenback climbed after a U.S. employment report on Friday showed wage growth exceeded estimates, bolstering the case for the Fed to lift rates this year. Futures pricing for a move before year-end climbed to 53 percent Friday from 46 percent the previous day. The yen weakened versus Australia’s dollar as equities in Japan pared declines and the nation reported a current-account surplus that was smaller than economists had forecast.

“Markets are looking to Yellen’s testimony this week to see whether she will still leave an option open for a March rate increase or sound dovish,” said Ayako Sera, a Tokyo-based market strategist at Sumitomo Mitsui Trust Bank Ltd. “The dollar can easily swing one yen up and down from 117, but, after the payrolls data, 117 seems to have become a magnet.”

The dollar rose 0.3 percent to 117.20 yen as of 1 p.m. in Tokyo, following a 3.5 percent slide last week that was the most since 2009. It advanced 0.2 percent to $1.1145 per euro, after rallying Friday from a three-month low. The yen slid 0.1 percent to 130.61 per euro and fell 0.5 percent to 82.99 per Aussie dollar.

Markets closed Monday for the Lunar New Year holidays include those in China, Hong Kong, Indonesia, Singapore and South Korea.

Payrolls, Wages
U.S. employers added 151,000 to payrolls in January and the unemployment rate dropped to an almost eight-year low of 4.9 percent, a report showed last week. Hourly earnings rose more than estimated after climbing in the year to December by the most since July 2009.

“Stronger than expected U.S. wage growth has called into question last week’s accepted wisdom that the U.S. dollar would fall as moderating economic growth pressured the Fed to delay its rate hike program,” Ric Spooner, a chief analyst at CMC Markets in Sydney, wrote in an e-mailed report.

The Bloomberg Dollar Spot Index rose 0.1 percent to 1,229.37 after climbing 0.6 percent on Friday, its biggest advance this year. It was still down 0.3 percent since Dec. 31. Japan’s Topix index of shares was 0.1 percent lower after paring an earlier decline of 1.7 percent.

Japan posted an 18th consecutive current-account surplus in December. The excess in the widest measure of the nation’s trade was 960.7 billion yen ($8.2 billion), from 225.9 billion yen a year earlier, the Finance Ministry said Monday. The median estimate in a Bloomberg survey was for a surplus of 1.05 trillion yen. [Bloomberg]

FTSE100 Outlook and Prediction

FTSE 100 Prediction

FTSE 100 Prediction

Todays pivot is 5870 and the 2 hour chart is showing some support at the 5860 area. With China celebrating their New Year and their markets shut the FTSE100 has drifted upwards overnight, and I expect that we will have a bullish day today with a rise towards 5940. If we get a dip back to the pivot and also the 25ema on the 30min chart at 5870 area then I think a long here could well be a decent play. The 2 hour chart is also brewing a bullish cross with the 20Hull crossing above the 100Hull, and this is showing support at 5855 currently, if that cross takes place. So, a rise to 5940 looks possible today though at that point there is some strong resistance which may well stops the bulls for the moment. I imagine they are desperate to exceed 6000 again before too long. We had some more bearish press over the weekend (here) so another little rise first before any major sell offs would fit in. So, for today support around the 5870 area for a rise to 5940.

Support 5891 5885 5871 5836 5794 5760
Resistance 5923 5951 6002 6008 6096

Good morning.
Market Summary for Thursday
The main focus today was the drop in the US dollar which boosted commodity prices and therefore gave a lift to mining and oil shares. This fall in the dollar was created by a reduced expectation for a rate hike in the U.S.
The FT100 had a small ex-dividend of 2.9 so this had little effect. The thing which stood out was the 4 waves of 100 point moves during the day indicating great disparity between bulls and bears.
Commodities were the best performing shares with “safe” shares being amongst the weakest – this pattern tends to oscillate regularly.

US & Asia Overnight from Bloomberg
Asian stocks fell, with the regional benchmark index heading for a weekly loss, after Japanese shares declined as the strengthening yen pressured major exporters.

The MSCI Asia Pacific Index lost 0.5 percent to 120.53 as of 9:16 a.m. in Tokyo. The measure is poised for a 0.7 percent decline this week as Japan’s Topix index erased its gains from last Friday’s Bank of Japan stimulus and the yen headed for its best weekly gain in seven years.

“It’s still way too early to say we’ve found the bottom,” Shane Oliver, Sydney-based head of investment strategy at AMP Capital Investors Ltd., said by phone. “The nervousness we’ve seen in global markets relates to the strength of the U.S. dollar putting downward pressure on oil and equities. With the dollar looking like it might have topped, the negative dynamic may have been broken. A weaker dollar though means a stronger yen and that makes life more difficult for the Japanese share market.”

Japan’s Topix index lost 1.5 percent, heading for a 4.4 percent weekly loss. The index has wiped out a 5.1 percent rally following the Bank of Japan’s stimulus boost. The yen traded at 116.81 per dollar after rising in the past four days.

South Korea’s Kospi index slipped 0.2 percent. Australia’s S&P/ASX 200 Index retreated 0.4 percent. New Zealand’s benchmark gauge declined 0.1 percent.

China Markets
Futures on the FTSE China A50 Index added 0.2 percent in most recent trading, while those for Hong Kong’s Hang Seng Index gained 0.5 percent. China’s Shanghai Composite Index climbed 1.5 percent on Thursday as the central bank stepped up efforts to ease a cash shortage before mainland markets close for the holidays next week.

Trading volumes could be muted in Asia as investors prepare for next week’s Lunar New Year break. Mainland Chinese markets are closed all week with Taiwan, while Hong Kong is shut for the first three days, resuming Thursday.

E-mini futures of the Standard & Poor’s 500 Index fell 0.2 percent. The U.S. equity benchmark index rose 0.2 percent on Thursday amid a rally in raw-material and industrial shares, as the dollar’s weakness boosted commodity prices and optimism for profits at multinational companies.

Patchy U.S. economic data ignited the dollar’s retreat this week, as concern grows over the vulnerability of the American economy to outside forces. The fixed-income market is all but pricing in zero rate hikes from the Fed this year, as central banks from Asia to Europe have mixed success with their efforts to stymie the turmoil that’s roiled markets in 2016.

While a weaker dollar makes commodities cheaper, and therefore more appealing in other currencies, oil remains an entity unto its own, reverting to losses Thursday as investors focused on the fact U.S. crude supplies are at their highest in more than 80 years. [Bloomberg]

FTSE Outlook and Prediction

FTSE 100 Prediction

FTSE 100 Prediction

Today of course is NFP news at 1330 which makes it fairly hard to predict what its going to do around then. The forecast is 192k, so slightly under the previous report, but around 200k should be seen as a positive. Looking at the FTSE to start the day we have the daily pivot at 5891 for support, but also a bullish picture just starting on the 2 hour chart with support at 5885. As such an early long around this area could be worth a go though I am alway cautious on NFP Friday. Its possible that we rise then dip on the news (buy the rumour, sell the news). We have resistance at the 5921 area where we have the 200ema on the 30min, but we are within a rising PRT channel on that time frame. If the 5871 (bottom of that channel), and just below those 2 other supports, holds then we could well be on for a rise initially. Mind you, if its anything like the recent volatility we might well rise to 6000 in one go! Or drop to 5800! So, generally looking to be long around the 5880 area first thing for an morning rise. If 5871 breaks then 5800 is likely, with the bottom of the 10 day Bianca at 5794. Stay cautious today!

Good morning.
Market Summary for Wednesday
The FT100 opened above 5900 but fell sharply in afternoon trade after U.S. data showed that the economy’s service sector expanded at a slower-than-expected rate, raising concerns that weakness in manufacturing was spreading to other areas of the economy. It briefly fell below 5800 before recovering into the close. A downgrade and poor figures in the finance and banking sector also put downward pressure on the index. Commodity shares performed better as the oil price rose by 5%.

Another day of 100+ swings in the FT100 shows that there is still danger in this market as the volatility continues.

US & Asia Overnight from Bloomberg
Asian stocks climbed with the region’s currencies as a selloff in the dollar underpinned a resurgence in crude oil.

A gauge of Asian shares rose for the first time in three days, led by mining and energy companies, while U.S. index futures advanced. Japan’s Topix index declined as the yen surged overnight. South Korea’s won rallied the most in three months and the ringgit climbed 1.5 percent after the dollar tumbled against a basket of other currencies on Wednesday. U.S. oilextended gains above $32 a barrel after jumping 8 percent in the previous session.

“The selloff in the U.S. dollar is supportive of commodities,” said Scott Schuberg, chief executive officer at Rivkin Securities, a brokerage in Sydney. “We’ve been trading under conditions that’s been fairly gloomy. The outlook for China has been gloomy for years now. I don’t really think that there’s too much negative sentiment that could be piled on to this market. Investors should start buying slowly.”

The dollar’s retreat was sparked by data showing the U.S. services sector grew at the slowest pace in nearly two years, underscoring the vulnerability of the American economy to unsteadiness abroad. The report tipped the fixed-income market’s balance closer toward zero rate hikes by the Federal Reserve this year, amid prospects central banks from Asia to Europe will act to quell the turmoil that’s roiled markets in 2016. The greenback’s drop helped boost the price of crude oil, along with speculation OPEC and other oil producing nations have agreed to an emergency meeting on market volatility.

China set a range for its economic growth target for the first time in 20 years, saying late Wednesday that the economy would likely expand 6.5 percent to 7 percent this year, slower than last year’s goal of about 7 percent. Gyrations in Chinese equity and currency markets unsettled global trading at the start of the year, with regulators’ response to the volatility fueling anxiety over their ability to manage the slowing economy.

Stocks
The MSCI Asia Pacific excluding Japan Index rose 0.7 percent at 2:49 p.m. Tokyo time, with Australia’s S&P/ASX 200 Index up 2.1 percent. BHP Billiton Ltd., the world’s biggest mining company, rallied for the first time in four days. The Hang Seng China Enterprises Index, a gauge of mainland Chinese stocks listed in Hong Kong, jumped 1.8 percent, while the Shanghai Composite Index advanced 1.1 percent. South Korea’s Kospi index gained 1.3 percent.

The Topix fell 1.1 percent, headed for its lowest close in more than a week.

Futures on the Standard & Poor’s 500 Index added 0.4 percent after the gauge climbed 0.5 percent last session, amid rallies in Exxon Mobil Corp. and Chevron Corp. [Bloomberg]

FTSE Outlook and Prediction

FTSE 100 Prediction

FTSE 100 Prediction

That was quite a sharp move down yesterday from 5920 to 5790 before an equally sharp recovery to bring us back above 5900. Certainly tricky conditions at the moment, though the long earlier in the day from the 5868 area worked out well for a gain. Volatile has certainly been the trend of the year so far! For today it actually looks fairly positive though there is resistance first thing at the 5945/5950 area so we may see an initial dip, which would work out well to test the 25ema on the 30min at 5910ish, which would be a decent long entry. Its NFP news tomorrow so something to bear in mind today and tomorrow morning, generally at the moment the news flow is fairly positive. Oil is holding steady around the $32 area as well. We have a pretty decent rising channel on the 10min chart as well at the moment with a rise to 6000 showing as possible, and with a cluster of resistance levels around here the bulls might have a bit of a job here. If it goes really bearish today (don’t think it will) then 5827 is the bottom of the 10 day Bianca, with 5800 bottom of the 10 day Raff. So, fairly simple trade plan at the moment, short term looks bullish up to 6000.

Older Posts »