Good morning. That was a great FTSE trade yesterday in the end , and the bulls did try and break 6710, but couldn’t hold it, before the bears dragged things back down. European stocks snapped a five-day winning streak as declines in banks outweighed a surge in miners. Greek shares slid for a second day. We have a 10 point dividend applying to the FTSE today, so bear that in mind if you have a position open at the close.

I have set up a new service looking at buying levels for FTSE 100 shares – you can read more about it here. Each day you will receive an email if you join it, giving the buy levels for particular shares that are looking good for a rise.

US & Asia Overnight from Bloomberg
Asian stocks fell as investors weighed comments from a Federal Reserve official ahead of U.S. employment data.

The MSCI Asia Pacific Index slipped 0.3 percent to 141.24 as of 9:02 a.m. in Tokyo. Interest-rate futures showed traders are raising the likelihood of an increase next month by the Federal Reserve, after Fed Bank of Atlanta President Dennis Lockhart said in an interview with the Wall Street Journal that it would take significant deterioration in economic data to convince him that a hike in September should be delayed.

“A lot of it is going to hinge on these next few data points, with the jobs report on Friday that will be important,” Mark Lister, head of private wealth research at Craigs Investment Partners Ltd. in Wellington, which manages about $7.2 billion, said by phone. “For all their faults, equities still seem to stack up better than a lot of other asset classes.”

Japan’s Topix index was little changed. South Korea’s Kospi added 0.1 percent. Australia’s S&P/ASX 200 Index declined 0.1 percent and New Zealand’s NZX 50 Index rose 0.2 percent.

Futures on Hong Kong’s Hang Seng Index and contracts on the Hang Seng China Enterprises Index increased 0.4 percent. Contracts on the FTSE China A50 Index, which tracks the biggest mainland Chinese shares, dropped 0.1 percent in Singapore as futures on the Shanghai Shenzhen CSI 300 Index jumped 6 percent.

Chinese stocks listed in the U.S. rallied Tuesday after a 3.7 percent climb in the Shanghai Composite Index. Chinese equities climbed for only the second time in eight days last session after local authorities imposed restrictions on short selling, their latest salvo in a bid to stem gyrations in the stock market. Some brokerages halted their short-selling businesses entirely.

U.S. payrolls probably rose by 225,000 in July, according to the median estimate of 83 analysts surveyed by Bloomberg News ahead of Friday’s government jobs report. That compares with 223,000 in June. The private ADP National Employment Report is due Wednesday.

Traders are pricing in a 48 percent probability that the Fed will raise interest rates in September. That compares with a 38 percent chance earlier Tuesday.

E-mini futures on the S&P 500 added 0.1 percent after the underlying gauge on Tuesday slipped 0.2 percent. [Ref]

FTSE Outlook and prediction

FTSE 100 Prediction

FTSE 100 Prediction

We have a 10 point divi today so that should be large enough to bring out some divi hunters at the close, probably starting about 16:15 or thereabouts. It all up to the bulls today who must break through and hold above 6700 if they are to have any hope of building on the recent gains. They got a bit of kicking yesterday being pushed back from 6720. A break of this level will put them in a safer position, certainly to start thing ink about 6740 (top of the rising 30min channel) and also the top of the 10 day Bianca and 20 day Raff at around 6780, 6790. I have put a rise in from the pivot at 6682, however a long here with a tight stop is necessary as if this level breaks then I think we will be dipping down to 6650 for the bottom of that channel, and possibly 6620 as support below that. For the moment, to start with, if the pivot holds I am feeling bullish for another charge from the bulls. Otherwise I am prepared to be fickle today and flick to bear on a break of 6682.

S&P Analysis

S&P Analysis

S&P Analysis

Pivot today is 2094 is resistance to start things off, with 2098 above that. A break of the 200ema at 2098 will likely get a rise to 2104, though the daily EMAs are both at 2098 currently. If the bulls go for it then the top of the 10 day Bianca is up at 2122. I have gone for a short off the 200ema on 30min, and a break of the 2090 area could lead to 2084, or the bottom of the daily channels at 2080 and 2065. Looks a bit more bearish than the FTSE.

SHORT 2098, stop 2101, target 2090 or lower

Good morning. Well the FTSE wasn’t quite as bullish as it could have been, failing to break the 6710 area, but spent most of the day fairly flat with the 6672 support area holding till after hours. Fortunately yesterdays S&P trade worked well, running to target at 2108 before falling back. Gold didn’t fair so well though, which continued falling while indices did in the latter stages of the US session. Greece’s stock market reopened and immediately had its biggest ever fall, 22%. For the FTSE 6730 still looks like the main resistance area for the bulls to break, with a rise to 6780 possible.

US & Asia Overnight from Bloomberg
Asian stocks dropped after Brent crude slid below $50 a barrel for the first time since January, dragging commodity producers lower.

The MSCI Asia Pacific Index declined 0.3 percent to 140.70 as of 9:05 a.m. in Tokyo. Australia’s S&P/ASX 200 Index slipped 0.2 percent ahead of Tuesday’s central bank interest-rate decision. Chinese stock-index futures fell after regulators imposed limits on short selling on Monday in its latest effort to suppress volatility.

Speculation Iran could boost oil output soon after sanctions are lifted and mounting concern over slowing Chinese economic growth fueled commodity losses, with energy and materials shares sliding around the world. The plunge in oil and data, indicating a pullback in U.S. manufacturing, bolstered the case for keeping American rates lower, as the Federal Reserve mulls its first increase since 2006 as early as next month.

“Renewed Chinese growth concern is driving commodities and stock prices lower,” said Matthew Sherwood, Sydney-based head of investment strategy at Perpetual Ltd., which manages the equivalent of $24 billion. “With earnings season concluding this week, all eyes are likely to look back at the clouded macro picture. China and Greece remain problematic and the U.S. Fed is likely to remain at the forefront of investors’ concerns.”

Japan’s Topix index retreated 0.3 percent. New Zealand’s NZX 50 Index fell 1.1 percent. South Korea’s Kospi index rose 0.2 percent.

Australian Rates
While most economists predict the Reserve Bank of Australia will leave the benchmark cash rate unchanged at 2 percent at its meeting on Tuesday in Sydney, Stevens has said the option of further easing remains on the table. Swaps markets are pricing in about a 90 percent chance of a reduction in the next year, data compiled by Bloomberg show.

Contracts on the FTSE China A50 Index fell 0.4 percent in most recent trading. With mainland Chinese stocks dropping for six of the past seven days, regulators announced the short-selling restrictions after markets closed Monday. Those who borrow shares will have to wait a day to pay back the loans, according to statements.

Futures on Hong Kong’s Hang Seng Index decreased 0.2 percent and contracts on the Hang Seng China Enterprises Index of mainland firms listed in the city added 0.1 percent.

E-mini futures on the Standard & Poor’s 500 Index slid 0.2 percent after the underlying gauge yesterday retreated 0.3 percent. [Ref]

FTSE Outlook

FTSE 100 Prediction

FTSE 100 Prediction

Yesterday high at 6710 will be the level that the bulls need to break, for a push to the 6730 area. If they manage to break this the the top of the Bianca 10 day at 6780 looks likely to get hit, as we also have the daily 200ema and top of the 20 day Raff here. As such looks a good place for a short. The daily pivot is 6671 today, pretty much where we are as I write this, so we may have a pull back from here initially, possibly back down to the 200ema area on the 30min at 6650. We also have the bottom of the rising 30min channel that held yesterday at this level, so i have gone for a fairly bullish play off this level. Below this then 6625 is a fairly decent support level, though looking at the 10minute chart its a fairly bullish start as I am writing. so, 6648, 6710, 6730, 6780 all look like the main areas for action today.

S&P Analysis

S&P Prediction

S&P Prediction

That was a very quick trade really on this yesterday though it bounced perfectly at the long entry, and ran to the 2108 target. Should have flipped to short really as it fell away to 2088! For today, the pivot is 2098, where we are as I write this so we may see an initial dip from this resistance level, down towards the 2095 and possible 2090 level. Below this there is support at 2084 and 2082, the former being the bottom of the 30min channel.

LONG 2088, stop 2083 target 2100+

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