Good morning. End of July already, doesn’t time fly! Yesterday remained pretty bullish as expected unfortunately not quite dipping to the 6620 order level. That said, the bears had a good go off 6700, timing that drop with some Greek news (still simmering away in the background). Talks over an €86bn bail-out for Greece have been thrown into turmoil after just four days as the International Monetary Fund said it would have no involvement in the country until it receives explicit assurances over debt sustainability. An IMF official said the fund would withhold financial support unless it has guarantees Greece can carry out a “comprehensive” set of reforms and will be the beneficiary of debt relief from its European creditors.

US & Asia Overnight from Bloomberg
Asian stocks advanced, while the dollar headed for its biggest monthly increase since January on speculation the Federal Reserve is moving closer to raising interest rates. Oil extended its worst monthly rout this year.

The MSCI Asia Pacific Index rose a third day, adding 0.5 percent by 1:55 p.m. in Tokyo and paring its July drop to 3.3 percent. Japan’s Topix index increased 0.5 percent and Australian shares strengthened. The Shanghai Composite Index lost 1 percent and U.S. stock futures fell 0.1 percent. The Bloomberg Dollar Spot Index headed for a 2.5 percent monthly gain. U.S. crude sank 0.7 percent and gold slid 0.4 percent.

The dollar’s ascendence in July amid mounting bets on a U.S. rate rise in September has cascaded through financial markets, hitting commodities already in retreat on supply gluts. Emerging markets have been a chief casualty, with the wild gyrations in Chinese equities dealing another blow. Developing-nation stocks are headed for their worst month since 2012 and currencies have slumped 8 percent this year.

“The U.S. dollar remains supported by the looming Fed tightening cycle,” Imre Speizer, a senior market strategist at Westpac Banking Corp. in Auckland, said by phone. “As we get closer to that date and get possible clues from speeches by officials over the next few weeks, I expect the dollar to auto-resume its upward trend.”

Commodity-linked currencies have borne the worst losses, with Brazil’s real, the Australian dollar, Canada’s loonie and the South African rand among the five biggest decliners against the dollar in July, down at least 3.9 percent. The euro emerged from the Greek crisis with a 1.8 percent drop, while the pound performed best among its 16 peers, slipping 0.7 percent.

Oil, Gold
The Bloomberg Commodity Index has lost 9.8 percent in July, the most since September 2011, after sinking to a 13-year low.

West Texas Intermediate oil slumped 19 percent, its worst monthly performance since December, while gold fell 7.5 percent and is set for its biggest drop since 2013 after falling to a five-year low. Copper slid 8.7 percent in July.

Emerging-market stocks are heading for their biggest drop in any month since 2012. The Shanghai Composite Index has tumbled 14 percent, the biggest loss among 93 global benchmark gaugestracked by Bloomberg, as margin traders cashed out and new equity-account openings tumbled amid a $3.5 trillion rout.

Japanese stocks rose on Friday, with the Topix index set to cap an increase in July, as investors watched quarterly results from more than 300 companies, the busiest day in the earnings season. Finance companies and shippers gained, while commodity industries fell.

Yellen Guidance
Shares of Noble Group Ltd. slumped 13 percent in Singapore. The stock has lost more than 60 percent since the middle of February when a group calling itself Iceberg Research published criticism of its accounting, which the firm has rejected.

While China concerns contributed to losses in Asian equities in July, better-than-expected profits in the U.S. helped boost the Standard & Poor’s 500 Index by 2.2 percent. The MSCI All-Country World Index has gained 0.5 percent, with the Stoxx Europe 600 Index up 3.9 percent, the most since February. An update on euro-area consumer prices is due Friday.

U.S. gross domestic product rose at a 2.3 percent annualized rate in the second quarter, the Commerce Department said Thursday, after a previously reported contraction for the first three months was revised to a 0.6 percent gain. The median forecast of 80 economists called for a 2.5 percent advance.

Fed Chair Janet Yellen is guiding the central bank toward its first rate increase in almost a decade as the U.S. approaches full employment. The Fed said in a statement Wednesday that it will tighten monetary policy once it sees “some further improvement in the labor market.” Economists have put the chance of a rate increase at the Fed’s September meeting at 50 percent. [Ref]

FTSE Outlook

FTSE 100 Prediction

FTSE 100 Prediction

I think yesterday general bullish sentiment will continue going into the end of July and probably remain for August as well. As such, buy a dip down to the pivot at 6666 today could well be a decent trade for another test of the 6700 level and probably a break. There are a few resistance levels of note just above that though, 6707, 6730 and 6780. We have pretty decent rising channels on both the 10min and 30min charts, but just need to be mindful of the fact that we are testing the top of the 10 day channels, both Raff and Bianca. As such the bulls have momentum, but a hurdle to jump as well. Support below the pivot is 6625 and 6620, the latter should provide decent support if it were to get that low.

Dax Analysis

Dax Trade Analysis

Dax Trade Analysis

The 11210 long worked well if you left it alone, as the stop didn’t get triggered and it ran to target. For today, the pivot is 11236 so support from this, though there is a decent rising 10min channel in play with support at 11260 first. The 30min channel is wider, with support at 11170 and resistance at 11340ish.

SHORT 11340, stop 11360, target 11300 or lower
LONG 11236 off the pivot, stop 11220, target 11300+

Dax Analysis

Dax Prediction

Dax Prediction

Pretty much the same plan, long off the pivot at 11210 today. It also is just testing the top of the 10 day Raff at 11252 this morning, so a little dip back would be good to get long on. Top of the 10 day Bianca is also at 11265. Above these resistance is 11295. Support below the pivot is 11140 and 11100

LONG 11210, stop 11190, target 11295+

Good morning. Nice early drop from the 6612 yesterday for a few points before the rally back towards the 6620/30 area as the Fed announcement got nearer. September 2015 is still being mooted as the likely rate rise time, so we shall see. I think ti might even be later in the year. We have just popped above the 10 day Bianca channel at 6619 so I expect this area to be back tested today, and as we also have the daily pivot there, for it to act as support for a push higher, certainly this morning. Things feel like they are recovering from the lows on Monday, helped by the UK GDP coming in at 0.7% yesterday for the second quarter.

US & Asia Overnight from Bloomberg
Asian stocks rose, following gains in global shares, as profits topped estimates and the Federal Reserve said the U.S. economy was progressing toward an interest-rate increase.

The MSCI Asia Pacific Index climbed 0.2 percent to 141.04 as of 9:01 a.m. in Tokyo. While Fed policy makers said the labor market and housing had improved, they didn’t provide a clear signal on the timing for rate increases, in a statement issued after their meeting. Economists had put the chance of a September increase at 50 percent.

Equities in the U.S. and Europe climbed as earnings from Bayer AG to General Dynamics Corp. topped expectations. Facebook Inc. declined in extended trading. Nomura Holdings Inc. rose 3 percent in Tokyo after first-quarter profit more than tripled as surging brokerage commissions and investment-banking fees outweighed a drop in trading income. Daiwa Securities Group Inc. advanced 3.3 percent after also posting a larger-than-anticipated earnings increase.

“Nothing has really changed with the Fed’s stance,” Evan Lucas, a markets strategist in Melbourne at IG Ltd., said by phone. “Earnings have been reasonable and there have been some bright spots. We expect to see a fairly good gain today” in equity markets, he said.

Japan’s Topix index advanced 0.8 percent. Australia’s S&P/ASX 200 Index gained 0.2 percent and New Zealand’s NZX 50 Index rose 0.2 percent. South Korea’s Kospi index added 0.2 percent. Markets in China are yet to open.

China Futures
Futures on the Hang Seng China Enterprises Index, a gauge of Chinese stocks listed in Hong Kong, and contracts on the Hang Seng Index gained 0.6 percent. FTSE China A50 Index futures were little changed and contracts on the Shanghai Shenzhen CSI 300 Index climbed 2 percent in recent trading.

The Federal Open Market Committee described job gains as “solid,” and it dropped the modifier “somewhat” to describe a decline in labor-market slack. At the same time, policy makers refrained from signaling the probable timing of the first rate increase since 2006, keeping market expectations focused on a move as soon as September.

Futures on the Standard & Poor’s 500 Index slipped 0.1 percent. The underlying gauge gained 0.7 percent on Wednesday. [Ref]

FTSE Outlook

FTSE 100 Prediction

FTSE 100 Prediction

I have a fairly simple plan for today and that is to buy the dip to around the pivot area and plan for 6659 and 6670 or more. If the pivot area breaks then the next support is the 200ema on the 30min at 6600, with 6590 and 6575 below that. Resistance wise, there is a pretty decent 30min channel in play with resistance at 6670+ (depending on when it hits the top of the channel), along with daily chart resistance from the 25ema at the 6659 level. However, the S&P reversed it bearish EMAs pretty easily earlier in the week so it will be interesting to see if the FTSE does the same thing; if it breaks that 25 ema then 6715 looks a likely point it will rise too quite quickly. So, bullish for the moment.

Older Posts »